Kodak will cease manufacture of all hardware within its Digital Cinema System and will instead focus on licensing the technology to other companies. Kodak cites an ever-increasing level of technical requirements and costs in digital exhibition for their decision to pull out.
Bob Gibbons, director of marketing and communications for Kodak Digital Cinema said, “We’re refocusing our strategy, which has been more hardware–based, to now get more into the service-side of the business and also focus on licensing some of our technology to other people to incorporate into their products.”
“We’ve been fighting the good fight and putting money in this for 10 years, but at the same time the industry is moving more rapidly to larger scale deployment. The continuing stream of DCI [Digital Cinema Initiatives] requirements also need to be met, and they all require technology development and investment. It’s becoming clear to us that this whole risk/reward profile doesn’t meet our test for a business we want to continue to put money into.”
The Digital Cinema System delivers automated on-screen content at multiscreen venues via a system of computer servers. For each screen there is a screen management server connected to a digital projector, and also a link to a central theatre management system (TMS) server. The TMS receives film and pre-show data by satellite link or hard copy and is also connected to the ticketing system at the box office. If the system is selling tickets for a given show, the TMS automatically sends the correct content to the screen management server to hit the screen at the correct time.
In the US market, this forms the sharp end of Kodak’s production line that starts with the digital preparation and distribution of pre-show, trailer content. At the theatre this is then hosted on the same server as the main feature, something that has been part of the system’s unique selling point.
Gibbons said, “We have a fairly good business in the prep and distribution of pre-show. We’ll continue to provide prep for the advertising content.”
He also added that Kodak will continue to support existing customers who have the Digital Cinema System installed:
“They have service contracts which clearly we will honour, as long as there are DCI requirements on the table we’re going to bring the systems up to meet those. That’s not to say we will continue to invest to meet future DCI requirements, but we will meet the current ones.”
Gibbons continues, “It’s the withdrawal from the hardware side of the digital cinema business, but not from technology licensing. Kodak’s an imaging company, whatever we become, we’re going to be an imaging company. We have some 500 digital patents and a lot our products are the result of innovation. We’re going to continue investing in the research and development. We have some neat technology in our screen management server and theatre management system. If companies came to us and wanted to license the technology in their products, we’d be interested in talking to them.”