We predicted this happening years ago, and it’s finally coming to fruition.  The most interesting idea behind an electronic system is the potential for the indie filmmakers wanting to get their materials into a theater.  They no longer have to rely on a large distributor to make their deal with the individual venue owners, but rather can sign up to be a part of the network and allow the system to greatly mitigate the previous physical costs of distribution that may have prevented the indie world from self-distribution models.  It’s like iTunes/Netflix for the theatrical market – though I wouldn’t be surprised if one of these networks-turned-content creators also took part in this system to bring a multi-platform (theatrical & VOD) for selected content that isn’t available to the large traditional studios.

Electronic movie distribution takes a leap forward
November 13, 2013

Written By: David Hancock, Screen Digest

The North American satellite delivery network for movies and other content has gone live, heralding the beginning of a true digital cinema environment both for projection and distribution. Digital Cinema Distribution Coalition (DCDC) has launched to 17,000 screens in 1,200 sites across the continent (see previous Analyst Commentary). The essence of the system is a ‘smart pipe’, bringing content into the cinema by satellite, broadband or even hard drive if necessary. However, the principal technology is satellite. The coalition aims to deliver 31 films by year end, a fraction of the overall US and Canadian film release schedule, but a good proportion of the studio output.

The original partners include Warner and Universal on the distribution side, with Walt Disney Company, Sony Pictures, 20th Century Fox, Paramount Pictures and Lionsgate also now on board. The exhibitor founders are AMC Theatres, Cinemark Theatres and Regal Entertainment, with National Amusements also signed up. This highlights the ‘major’ nature of the venture, a practical necessity for such a system which will work on volume, driving the price for its members down as more sign up. Ultimately, it should also be cheaper and easier for the indie sector, for which the economics of film distribution are very different. In Europe, independent distributors are not using electronic distribution systems as the current cost makes it unviable for the type of releases they are dealing with. A single system, working on the volume of major distributors, could well bring this type of release into the electronic distribution world.

There are nearly 43,000 cinema screens in North America spread out over 6,500 sites so the launch number, while being very significant, is only one-fifth of total sites, underlining the growth potential of the venture. DCDC will install and maintain the equipment needed at sites, at its own cost. This includes a satellite dish (owned and operated by DCDC), V-Sat backchannel equipment and a catch server for receiving and  ingesting content. A NOC is online to monitor the network. As stated in previous commentaries, Deluxe Echostar was chosen to operate the network, and Hughes is engaged to install and maintain the equipment. Kencast is the platform provider, including an ability to screen live event cinema.