The Evolution of Electronic Delivery

The Evolution of Electronic Delivery – 

Led by moderator Mark Waterston, SVP, Qube Wire, a panel comprised of Bryce Alden, VP, Digital Cinema Operations at Deluxe Technicolor; Scott Hildebrandt, Sr. Mgr., Projection & Sound Operations, Cineplex, and Alfredo Guilbert, Chief Operating Officer of NetLevel, looked at the evolution and current makeup of electronic delivery and distribution of DCP content globally.

Beginning with an overview of the DCP distribution market delivery mechanisms used worldwide, Waterston noted first that Qube Wire delivers physical media to theatres but also delivers content and keys to cinemas worldwide using their Qube WireTAP appliance. In North and South America, content has been mainly delivered via satellite, with Digital Cinema Distribution Coalition (DCDC) being the largest player, and with Deluxe operating a network mostly in Canada. Europe, on the other hand, has embraced broadband (terrestrial) delivery, with 100 percent broadband delivery in the Netherlands, Belgium, Luxembourg, Norway, Sweden, Finland and the Baltic republics, and much of France, Germany, Italy, and the UK. Greece, the Balkan countries and most of Eastern Europe use a combination of satellite and broadband.

Asia varies widely, by country, with China being almost entirely serviced by broadband delivery. India uses both satellite and broadband. Even countries like Korea and Japan, that we might assume would be very advanced with their connectivity infrastructure, still use hard drives delivered to cinemas in almost all cases. In the Middle East, Qube covers 70 percent of Saudi Arabia and nearby countries. In Africa, only South Africa uses broadband, with the rest using hard drives.

Why is the world so divided over satellite versus broadband delivery? For North and South America, where almost all the countries speak the same languages, satellite broadcast makes a lot of sense. It’s less practical for diverse markets such as are found in Europe. The price of broadband is static or slightly increasing, whereas satellites have a lifetime of only up to 20 years, at which point a new investment is required. And those investment costs are rising, whereas broadband pricing is decreasing, with Internet connections becoming faster at the same, or lower, pricing.

But satellite delivery is available everywhere, whereas broadband can be limited, with struggles to get connections in place outside of major urban areas, even in the United States. The capital costs are borne by the Internet service provider, while satellite networks must be borne by groups.

New modes of delivery are on the horizon, such as 5G wireless networks (including a Qube use of 5G in Melbourne, Australia). And you may have heard of low-orbit satellite delivery, which is a hybrid that combines satellites with broadband/Internet-like speeds.

Hard drives remain hard to beat, given physical constraints on satellites. DCDC still has to deliver hard drives to many theatres in New York, rather than broadcast to them. In rural areas, Internet connections are unreliable, in both the US and Australia. Studio’s territorial offices control the logistical operations, and they want to continue that work, and it’s easiest through hard drives. They circulate the hard drives and in the case of ordering five hard drives, they may circulate to 15 theatres, effectively cutting their costs by a third. So to compete, the electronic deliverers must meet that price point per theatre delivery. And these physical delivery prices include posters and other promotions along with the hard drives, so that lends attraction to that method as well.

Continuing the mini-education session, Waterston noted that electronic delivery has other benefits that can’t be ignored. Alternative content can be delivered easily via electronic delivery and kept on a TMS for longer ‘stays’; there’s no hard drive to be returned. Electronic delivery also allows for more granularities in delivery-tracking and making adjustments. It also has a lower-carbon footprint than trucks delivering hard drives around the world.

Directing his first question to Alden, Waterston asked about Deluxe’s satellites. “The satellites we use for North America are geostatic, geostationary ones, 22,000 miles above the earth’s service, usually at the equator, just like the DIRECTV network’s,” said Alden. These five-ton behemoths are very expensive and flashy but at the end of the day, “they’re just event pipes for us, bouncing a signal up from the earth and back down to the theatre footprint.” For Deluxe and DCDC, the satellite dishes and coverage are good for Alaska, southern Canada, the US and the Caribbean as well. But neither Deluxe nor DCDC are operating for Mexico and Latin America.

“DCDC has been a huge success for the United States but are there other markets which could co-operate and combine to emulate what the Coalition has achieved,” asked Waterston.

Yes, but you’ll need more sophisticated asset management, given the lack of homogeneity in other markets, said Alden. But having satellite delivery can be done in much smaller markets, with co-operation among players, he said.

Turning to Guilbert, whose NetLevel out of home entertainment network is enabling the secure delivery of movies, live events, eSports / games, and virtual reality experiences to theater auditoriums, Waterston asked why broadband distribution fits the bill to deliver those products.

“Our goal is to bring new experiences to theatres…and for that, you need a reliable broadband network; think of teams in eSports in real-time, live, competing from different theatre locations,” noted Guilbert, who said that circuits are embracing the opportunity to increase their cinema utilization through the addition of concerts, business conferences, worship events, eSports and live international or local sporting events. But for those, a secure and reliable infrastructure is essential, Guilbert emphasized.

Hildebrandt of Cineplex addressed the digital divide common in Canada between servicing urban and rural areas. Given lack of satellite coverage in some parts of Canada, Hildebrandt noted that about 63 percent of Cineplex sites used satellite as means of delivery, but the rest of the circuit required hard-drive deliveries. “In 2019, Cineplex rolled out Unique Digital RosettaBridge™ theatre management software and MovieTransit™ to all its theatres in tandem with fiber internet,” said Hildebrandt. “Now on-screen advertising is being delivered digitally, with this new venture laying the foundation for future fiber/broadband delivery options.”

“Thanks to fiber and broadband internet, we’re now able to reach more locations and the limitations we once experienced with satellite delivery is no longer a challenge,” explained Hildebrandt. “Over the years, Cineplex has been able to diversify, and includes a digital media company that provides assets like digital poster cases, digital media screens and Digital Menu boards that are all delivered digitally via our fiber or broadband network. Any printed materials, including banners, standees or specialized marketing materials, are delivered through our internal logistics.”

Citing the need to make late changes to movies occasionally, witness “Cats,” Waterston asked if the movie delivery, second version, was tough. “We knew the release window for the changed, second version,” said Alden, “and while electronic delivery enabled us to get the [revised] content out there very, very quickly…keep in mind that there are many cinema sites that are hard-drive capable, so we still needed two weeks to get everything out.”

Spotting Howard Kiedaisch of Arts Alliance Media (AAM) in the crowd, Waterston asked Kiedaisch to share with the audience the benefits of a truly global content e-delivery solution, which was announced by AAM and Motion Picture Solutions (MPS) in fall, 2019. “The idea that currently a large percentage of DCPs are still distributed on physical hard drives between studios and exhibitors, when it’s actually a digital file on both ends, needs to change,” said Kiedaisch. He noted that the promise of creating a digital infrastructure whose efficiency and flexibility would benefit the industry was a no-brainer, and that shipping around hard drives really prevents a lot of those benefits.

“By creating an integrated solution, live information can be sent up and down the supply chain, ensuring that the right assets are delivered, the trusted device list is up to date, the correct KDM is delivered and it’s all ingested, with content ready to play,” said Kiedaisch. “As well, the system captures the actual playout data, and this will be true for trailers, advertisements, and KDMs and of course feature movies.”

Attendees were familiar with the players involved.  Covering the exhibitor side, AAM has a strong exhibitor presence with its software touching over 45,000 screens worldwide. MPS covers off the studio/distributor side with its deep studio and distributor relationships that handle international mastering, versioning and KDMs around the globe. “So the combined, MPS/Gofilex delivery platform sits neatly in the middle, and currently delivers to over 2,500 sites, mostly in Europe,” added Kiedaisch, but by leveraging AAM’s worldwide footprint, this delivery capability can be expanded globally.”

“Rather than doing everything individually, we are working together to leverage the strengths of each party to optimize the supply chain, which benefits the industry overall,” Kiedaisch concluded