Theaters to Get Movies by Satellite

A coalition of film studios and movie-theater companies said it intends to start experimenting with a new satellite-based digital delivery system for movies, in a bid to make theatrical distribution more efficient.

Known as the Digital Cinema Distribution Coalition (DCDC), the organization includes Time Warner Inc.'s Warner Bros. Pictures, Comcast Corp.'s Universal Pictures, Regal Entertainment Group, AMC Entertainment Inc. and Cinemark Holdings Inc.

For roughly the past three years, the group has worked to design a digital delivery system that would let theaters receive films through satellite dishes, which would be paid for by the coalition. The films would then be fed into a theater's digital projection system. Though films have been digitally distributed before, it has not been done on the scale that DCDC is proposing.

Even though digital projection is quickly replacing bulky celluloid reels, digital movies are usually still physically delivered to theaters on hard drives known as digital cinema packages.

Of the three participating chains, Cinemark already relies entirely on digital projection in the US and Canada and both AMC and Regal have said they will be completely digital by the end of the year. The three chains are the largest in North America by number of screens and locations.

They plan to begin experimenting with the system this fall, with deployment expected to begin in 2013.

The initiative is the "logical and very important next step in digital distribution," said Regal Chief Executive Amy Miles.

Though DCDC currently has five members, Tim Warner, chief executive of Cinemark, said the group has been in talks with the four other major film studios, as well as independent studio Lions Gate Entertainment Corp.

One theater executive who saw the coalition's presentation at a movie-business convention in Las Vegas on Wednesday said the initiative will need additional members to become viable.

"It will be important to see the distributors [and] content providers migrate over to this," said Vance Bowers, director of business technology for Goodrich Quality Theaters Inc. in Michigan. "They've got a good start, but there's still some names missing."

Darcy Antonellis, the president of technical operations for Warner Bros., who conceived and spearheaded the initiative, likened its development to a "multiyear pregnancy."