Exhibitor transition to digital delivery accelerates as Deluxe comes out of bankruptcy protection

Exhibitor transition to digital delivery accelerates as Deluxe comes out of bankruptcy protection

A big month for exhibitors

It has been a big month for news that will effect exhibitors in coming months. In this newsletter I will be covering a number of important news items.

  1. Deluxe comes out of Chapter 11, bankruptcy protection with a restructuring rescue plan. Deluxe is the main source of DCP supply in Australia, so what does this mean for exhibitors?
  2. Update on the Australian Content For Australian Communities (ACAC) Initiative. What have we learnt from the Initiative?
  3. Small Distributors also in the spotlight. How can the ACAC Initiative also help them.
  4. Initial roll out of time and cost saving tools for small cinemas.
  5. CineTechGeek video, get a quick overview of what you need to now about digital delivery.

The Deluxe rescue plan

Deluxe is the biggest and most favoured service provider by the major studios for the supply of DCPs and other services that are critical to the exhibition industry. As part of the Deluxe restructure, they will be removing a lot of dead wood in order to make the company more profitable. It is no coincidence that Deluxe sent out on the 18th of this month (Oct.), after entering bankruptcy protection on the 3rd Oct., a letter to all exhibitors announcing the closure of regional dispatch, and transition to a central dispatch in Sydney. We at SCO had already foretold this was on the cards, however, the restructuring has greatly accelerated the time frame for the transition to digital delivery.

As part of the transition to a central dispatch, Deluxe has offered to pay for shipping costs. This makes sense as they are expected to quickly transition to digital delivery, negating any shipping costs, plus making the transition easier to swallow by many exhibitors who prefer local dispatch locations.

SCO has been seeding the move to digital delivery for a number of months as to ensure exhibitors are more prepared for this transition. However, with these changes at Deluxe, the time frame has been greatly accelerated. Being prepared for digital delivery is now a major issue that all exhibitors will need to address in coming months.

Issues that should be top priority going forward:

  1. The implementation of NBN internet connection at your location with effective unlimited data plans.
  2. Implementation of software infrastructure, if needed, to facilitate the digital download of content (i.e. a computer with software on it that runs the download tools. This is likely to be your TMS if you have one, or an administration PC)
  3. Training of new procedures on downloading DCPs and getting them onto DCI-Players or TMS.

Here at SCO we are happy to discuss these issues with you directly as an independent consultant, however, it is expected that your trusted service provider who looks after your TMS and cinema players may be your best path.

Update on Australian Content for Australian Communities

The initiative has generated much discussion between SCO and many smaller distributors. The overwhelming thread from these discussion is that small distributors have limited resources. The VPF, for example, has been a large barrier in that it absorbs a lot of up front costs when attempting to utilise VPF screens. There is also a significant amount of labour involved in organising and contacting locations, negotiations and supply of assets. These tasks take significant resources that could otherwise be spend on Advertising and promotion.

There was also some doubt that making it too easy for smaller films to be promoted to exhibitors brings up the noise for exhibitors (To many distributors pushing to many movies). Although there is some truth to this, we must remember that smaller films, like Kenny, had very small initial releases. It is part of cinema culture that small films are able to access a theatrical release and find an audience. If not, films like Kenny may have never found their audience. A middle ground must be established in this new era of theatrical distribution.

Building on the ACAC Initiative, SCO feels other efforts can be implemented to improve the capability for Australian films reaching a theatrical audience while at the same time reducing the noise. Online tools created by other industries to make selling ads (Google Ads) or selling general items (ebay, gumtree) can be offered to distributor/exhibitor industries to greatly improve the conditions for all parties. At the same time these tools can bring down costs through automation of many manual labour tasks in the distribution of film and making it far more time effective for exhibitors to review independent films for release.

Due to this, SCO intends to make available tools to exhibitors AND DISTRIBUTORS that achieve this outcome, as well as continuing the ACAC Initiative. An example of what this will look like can be taken from the free Release/Booking/Commitment tool that SCO will make available to small cinema owners in coming weeks. (See below) SCO intends to re-develop this tool for free use by smaller distributors to achieve the outcome as discussed above.

ACAC Initiative pushes industry forward

Umbrella Distribution has made recent DCPs available to locations via digital download. We feel that the SCO ACAC Initiative was the pressure point that ignited this capability. For our cinemas, we expect, due to digital delivery, we will save conservatively $250 in labour and costs per film we receive via this method (varying depending on location etc.). Over a year with 2 new films per week, (2dcps x $250 x 52weeks) = $26,000 saving. This is a significant saving for smaller cinemas that cannot spread costs to more screens.

Announcing the Release/Booking/Commitment tool for free use by SCO members

Screen capture of new tool

SCO is excited to announce the release of a new release/Booking/Commitment tool for use by smaller exhibitors. This tool is specifically designed to allow smaller exhibitors to save many hours per week organising the upcoming film slate for your location. This tools achieves this by offering the following functionality.

  1. The release screen shows all upcoming films on a visual timeline, giving you plenty of warning of films coming in a very graphics and informative way. Film detail, posters and trailers are a click away for all upcoming films allowing you to quickly research the films. Films that look promising can then be pushed into a booking negotiation section. This tool is especially useful in avoiding the mistake of not making an offer on a film in time and hearing the dreaded "Window Is Closed" excuse to refuse access to films for smaller exhibitors.
  2. The Booking screen shows you all films you have booked and exactly where on the weeks ahead they fall. Multiple locations can be managed together or individually. A simple to use Email offer system is built in, building the offer emails you send to distributors. The Email system is specifically designed to follow threads as to ensure all negotiation will show up in a single thread in your email agent.
  3. Commitment Calculator automatically shows you exactly how much you have committed to the distributors to ensure you do not over promise. This feature saves a lot of time as to calculate this by hand can be very time consuming.
  4. Negotiations are tracked into a database and can be easily searched.

This tool is many years in the making and is undergoing its 3rd revision. Due to this upgrade it is considered beta level software (Expect bugs) that will be addressed in coming months. In coming weeks a detailed video will be created showing exhibitors how it can be used and to establish if the tool is suited to your location. To gain access to the tool, please contact me and an account will be created.

NOTE: SCO understands that many people have a suitable solution in place to archive the outcome this tool addresses. This tool is only being made available to SCO members who feel they can better operate their cinema by adopting these tools. I recommend you review the training video when it is released to see if the tool is right for you.

CineTechGeek Video to help in your understanding of digital delivery offerings

Recently I created a CineTechGeek video targeting the issues of digital delivery. Due to the Deluxe restructure, many companies have sprung up to potentially fill the hole left behind. Deluxe restructure is well in hand and these companies will likely be disappointed, however, there has been a lot of misinformation and spruiking by these entities. This CineTechGeek video will hopefully put you in a better position to make a confident decision.

Link: DCP digital delivery explained for Exhibitors and Distributors - https://youtu.be/WTDtnKmr7qA

Share the love

Finally I would like to remind readers to share any information they discover though SCO with fellow cinema exhibitors and distributors. Due to spam filters and other tools, a number of exhibitors/distributors who I know are on this mailing list, still fail to see these important announcements. I highly encourage discussion and voicing of opinion as that is what a community does to evolve to a better solution for all.

As always, if you have any questions regarding these topic or advice on how to take advantage of the evolution of the australian cinema industry, please contact me, I am happy to discuss them with you.

James Gardiner
Founder, Small Cinema Owners Association
mob: 0412997011

Published: 2019-10-30
jamieg administrator

James is the Founder of Small Cinema Owners Association. He is also known for his YouTube channel CineTechGeek, has been involved with ISDCF and the formation of the digital cinema technologies, is a member of SMPTE. For a job he runs three small regional cinemas in Australia.

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