Disney Embraces Future with E-Cinema

In the film industry as elsewhere, digital technology marches on. Eventually, movies will be downloaded to theaters by satellite, as they are now to many private homes. Film reels delivered by truck will become as anachronistic as excursions through the countryside on steam locomotives. Now, one of Hollywood's oldest and most important film studios has seen the light and formed a division to steer it in this direction.

Walt Disney Company's new department will focus on "e-cinema," as the soon-to-be-emerging phenomenon is known. Phil Barlow, who was head of Disney's Buena Vista Pictures distribution unit for the past four years, has been put in charge. His mission is to "explore technologies for distributing films directly to theaters via satellite," according to a Reuters news brief of Friday, April 2.

Digital distribution could offer enormous benefits for film studios and fans alike. The upside for the studios will be huge savings in duplication and distribution costs. Under the present system, it's necessary to print thousands of copies of a major film. With a digital satellite-distribution system, only a few copies would be needed. A major benefit for fans will be improved visual quality---there is no wear and tear on a digital master. (Just how this digital master will be stored and projected has yet to be revealed.)

The other benefit for fans will be increased variety. Theaters now schedule films months in advance. Multiplexes offer a maximum of two films per screening room, and individual theaters rarely offer more than three films. Without cumbersome reels to deal with, a theater could download as many different films as its audience wants to see, with closely spaced start times if desired.

Probable losers in the coming changeover are duplication houses and distribution companies, both of which are certain to see their business shrink. Potential piracy problems could occur if the satellite signal is intercepted or if techno-savvy theater employees figure out how to archive the datastream. Disney engineers and attorneys will seriously address those possibilities.

It's interesting to note that Disney is leading the industry's exploration of this new territory. The company has a long history of resisting what it has perceived to be the threat of new technologies, rather than embracing them as opportunities. In the early 1980s, Disney fought a losing battle---all the way to the US Supreme Court---against Sony Electronics. At issue was the then-new video cassette recorder. In VCRs, Disney foresaw only rampant piracy and loss of control of distribution. Company executives failed to recognize that video rentals would become a major revenue stream within only a few years.

According to Richard Cook, chairman of the Disney Motion Picture Group, "E-cinema is one of the most important things to happen to distribution and exhibition since the birth of our industry." New digital theater technologies, now in the experimental stage, should begin appearing within five years.