ShoWest 2001

Behind the spectacle of some of Hollywood's hottest stars attending this year's ShoWest, lies the spectre of some of the most established US cinema operators facing bankruptcy.

Snatched conversations between the many thousand-strong delegates, will be as much about the latest extravagant distributor showreel/performance as the overbuilding that has caused the exhibition crisis; how other exhibitors have learned from this and are now opting for acquisition and merger instead of building; and whether the nascent digital technology will turn out to be a blessing or a curse.

ShoWest kicks off its 27th event in Las Vegas under its new owners, Sunshine Group Worldwide (SGW). It completes SGW's control of the exhibition world's convention circuit. Run by brothers Robert and Jimmy Sunshine, it also owns and operates Cinema Expo in Amsterdam, ShowEast in Orlando and CineAsia in Hong Kong and Singapore.

Started in 1975 by the California and Nevada chapters of the National Association Of Theater Owners (Nato), ShoWest has become the calendar's key event where major studio distributors wine and dine exhibitors while enticing them with trailers and product reels of their upcoming product. Stars turn out in droves to introduce their movies, while at the gala awards banquet, they parade one after the other to pick up ShoWest trophies and schmooze cinema-owners.

In recent years, the event has attracted an increasing volume of international exhibitors anxious to catch a glimpse at what Hollywood will be throwing their way before Cinema Expo (which uses many of the same showreels) in June. This saw the introduction of an international day in the late 1990s on the Monday before the show begins, and the Sunshines' expertise in the international markets will surely be used to expand this presence.

The Sunshines are also encouraging product screenings - usually a rarity at ShoWest although in the past couple of years, exhibitors have been treated to early full screenings of Where The Heart Is and Tarzan. This year, a newly revitalised MGM has already committed to screen upcoming comedy Heartbreakers, Miramax will unveil Spy Kids, while DreamWorks SKG is offering a nearly-ready print of its summer animated extravaganza Shrek.

But the tone of ShoWest will be a serious one. Domestic exhibition faces an uncertain future - the recent past has seen Anschutz Corp and debt investor Oaktree Capital Management bail out Edwards Theaters Circuit which was in bankruptcy protection, following similar assumptions of the debt of Regal Cinemas and United Artists Theater Corp. Meanwhile, Canadian billionaire Gerald Schwartz, together with two US partners, paid $850m to acquire the Loews Cineplex chain, also in bankruptcy protection.

If nothing else, the Las Vegas convention will highlight the gamble that is at the heart of the entertainment industry.

The real Inspector Clouseau'
At a presentation to exhibitors, MGM distribution chief, Erik Lomis declared that "My lawyers have told me that I'm not allowed to tell you that we're making The Pink Panther with Mike Myers because we haven't dotted all the i's and crossed all the t's." Kevin Spacey was also allegedly attached to the project at one time, so the real Inspector Clouseau may still yet be to emerge.

Boeing offers Digital transition scheme
Hoping to break the deadlock between exhibitors and studios over who should pay for the transition to digital cinema projection, several companies including the world's largest aircraft-maker are using this week's ShoWest convention in Las Vegas to announce independent financing schemes.

The Boeing Company, and a joint venture of Technicolor and Qualcomm were both preparing to announce plans to fund digital transmission systems that would then be leased to theatre.

Boeing unveiled its satellite content management and delivery system at ShoWest on Tuesday evening with a screening of Robert Rodriguez children's action adventure Spy Kids that was made for Miramax Films' Dimension label. The film, which was finished on Sunday and then downloaded from a satellite the following day, was transmitted without any discernible hitches. Rodriguez said the crystal-clarity and vibrant colour hues were exactly as he envisioned them during shooting and in fact far exceeded the quality of celluloid. Everyone in the audience agreed after seeing the stunning, effects-laden, images projected digitally.

Boeing, which is has its own string of satellites, first introduced its system last November, when it digitally screened the romantic drama Bounce, another Miramax production, in a New York City theatre. The Seattle giant already has its own equipment leasing and financing division, Boeing Capital Corp, which is typically used by airlines to purchase planes. As a military supplier, Boeing also has an expertise in protecting satellite communications through encryption technologies.

"We'll be prepared to hold serious discussions of initial order inquiries at ShoWest," said Tig H Krekel, president of Boeing's Satellite Systems. "We will also graphically demonstrate the benefits of Boeing digital cinema: high-quality, error free, cost-effective, and highly secure film distribution."

However, there are real doubts about the speed with which exhibitors will adopt even the most technologically advanced digital systems in light of the major chain's current financial crisis in the US.

John Fithian, president of the National Association of Theatre Owners put it this way: "Why should you pay as much as $150,000 for a digital projection system that will become obsolete in two years when you can still buy a 35mm projector for $35,000 that will last twenty years." He said that the "concept of third party financing for was not necessarily a bad one" but suggested it that will take several years before digital cinemas went beyond the current testing phase. In order to justify the significant costs involved, digital cinema would have to surpass traditional 35mm projection in audience eyes.

"Digital cinema will roll out, but it won't happen any time soon" Fithian told reporters before delivering his keynote address on Tuesday. 'The technology is developing but it is not there yet. It has to be significantly better than film to make sense and even before that significant issues still have to be sorted out."

Other contenders at ShoWest include Qualcomm and Technicolor. The companies - which have a joint venture to develop a feature digital delivery system - are also expected to announce a franchise-based operation, under which exhibitors pay a lease in correlation to attendance at digital events.

Digital roll-out is a contentious issue between studios and exhibitors, with neither side willing to shoulder financial responsibility for the conversions, which are estimated at around $150,000 per screen projector. Both sides argue that the other has more to gain from digital take-up - the exhibitors cite the fact that the studios will be able to erase hefty global p&a costs, and the studios counter that digital delivery will open up new ancillary revenues for exhibitors. In a statement, Boeing cites the ability to screen Broadway plays, rock concerts, corporate training and distance learning as a benefit of digital projection.

But whether the lease models will be universally accepted is unclear. Conversely, of course, outside involvement in conversion can also mean outside involvement in