hoc opus

With a big "This is how we do it!" aimed at the one place setting digital standards for none existent equipped theaters, the Irish Film Board announced that all cinemas (British English) in Northern Ireland and the Republic of Ireland will be converted over to digital projectors that meet the standards set by Hollywood studios through their Digital Cinema Initiative (see BBC News). Converting over 515 screens is anticipated to cost approximately $100,000 per screen.

But how could they afford this? What's the business model? Why Ireland?

All very good questions that the studios are likely salivating over. As to the first, a conglomerate of venture capitalists formed Digital Cinema Limited Ireland to foot the $53.3 million price tag to install Avica Technology's digital storage servers, players and management software and projectors from NEC Electronics Corp. of Japan (see Business Week).

The business model is not entirely clear from the articles covering the news, but it does appear that studios will be providing at least one of the revenue streams in the form of "digital print fees" to be shared by Avica and the investors. This fee is in lieu of the cost of printing and transporting traditional film prints.

As to why Ireland...

"Ireland was picked as the first region to get the full digital cinema treatment because it is a manageable size and it has the second-highest level of cinema attendance in Europe, with 80 percent of its films coming from Hollywood, [Kevin] Cummins [spokesman for Avica Europe] says." (see PC World)

It is unlikely that a similar solution would be found for the 36,000 screens in the US, but, as with most new technology that is more easily deployed in foreign markets, it should provide lessons and strategies for converting US theaters.
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Posted by Marc at 02:04 PM | Permalink | Comments (0) | TrackBacks (0)

After ReplayTV was forced to abandon its ad skipping technology by Hollywood and TiVo limited its fast-forward speed during playback, the fear of the extinction of commercials transformed into a confusion of the future of commercials.

CBS released a study in November 2004 detailing the viewing habits and recall of DVR viewers (see MediaPost).

"The research...on the viewing habits of DVR households, which found that they fast-forwarded through about 75 percent of the commercials they view in playback
mode. While that is no surprise...recall research [indicated] that those same people were able to recall 23 percent of the commercials they fast-forwarded through."

Dave Poltrack, executive vice president-research and planning at CBS, pointed out how high that figure is relative to expectations and normal television viewing. Theories about the reasons for the figure abound, but likely surround the focus DVR viewers maintain in order to spot the last commercial and stop fast-forwarding. Further, the research was in line with other studies from InsightExpress and MediaPost in 2004 that also posited that fast-forwarding provided a stronger chance for recall than in traditional viewing, where most viewers simply change the channel.

And now TiVo, seeking to capitalize on these findings and improve its relationship with advertisers (and maintain its own survival) is testing a new advertising feature in test markets that puts up banners over fast-forwarded ads allowing users to request further information from the advertisers of interesting products and services (see Mercury News).

So, as usual, the apocalyptic dyspeptic future our new media analysts and evangelists predict is being avoided. The traditional underpinnings of commercials appear solid, just the window dressing may change. Frankly, a device that can provide specific user interactions and viewing habits related to content screams to incorporate an targeted advertising mechanism. Cable operators should also consider these implications for ad-based VOD.

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Posted by Marc at 05:09 PM | Permalink | Comments (0) | TrackBacks (0)