Alternative Content Rides Digital Delivery Into Theaters

From the Foo Fighters to “Frankenstein,” digital systems are fueling fast growth in nontraditional programming for movie theaters

In another sign of how live and alternative content is creating a growing profit center for theaters disgruntled by studio plans to shorten windows and squeeze exhibitors, Microspace Communications Corporation announced on Tuesday that its industry-leading satellite delivery of digital cinema has more than doubled its alternative programming in the past year.

At the same time, Cinedigm Digital Cinema said it has plans to follow Tuesday night's Foo Fighters 3D concert by developing a broad digital network to bring extensive, diverse and sometimes geographically targeted programming into theaters.

Swan Lake"We did 12 events last year" (including the Bolshoi Ballet's "Swan Lake," left), Microspace's manager of digital cinema distribution Curt Tilly told TheWrap. "We're at 22 already, and we're getting ready to announce two new events of a type we haven't seen in theaters yet.

"We're at a crucial time when the industry is on the verge of making some big decisions about movie theaters," he added, "and these events have turned into a significant source of revenue."

As TheWrap reported last week, alternative programming generated $112 million for the exhibition industry in 2010, up 51 percent over the previous year. The dollars are still heavily weighted in favor of Hollywood movies, but on weekend mornings or weeknights, event screenings of opera, theater classical music and rock concerts (like Tuesday night's 3D Foo Fighters event) are routinely packing theaters that otherwise would sit nearly empty.

Microspace delivers both feature films (for four studios) and special events (via its LiveCinema network) through a digital satellite delivery system that, said Tilly, is "the great equalizer" as far as content goes.

Chris McGurk, the chairman and CEO of Cinedigm Digital Cinema, agreed that the digital satellite delivery system is key to programming a wide variety of content in theaters.

Foo Fighters"Once you have a dish on the roof, it allows you to turn a theater complex into a networked entertainment center that you can program almost like a cable channel," said McGurk, whose company began with sports programming in movie theaters and is behind Tuesday's Foo Fighters concert (right).

"The average attendance is less than five percent of the seats Monday through Thursday," McGurk told TheWrap. "When you put content in there like this [Foo Fighters] concert or a sporting event, you can fill the theater up on a Tuesday or Wednesday night, and that's pretty exciting."

McGurk said that Cinedigm's plans are to share the "downstream income" with exhibitors on content that debuts in theaters; he sees the digital distribution of alternative content as a way to help out the studios by providing another way to make the exhibition business more financially viable.

"The level of tension now between exhibitors and the studios is higher than it's ever been before," he said. "Exhibition is looking for answers that can help strengthen them financially and help fill those seats … and the studios I've talked to are all for anything that makes the exhibitors more financially viable.

"They view it as an opportunity that they'd rather let someone else develop."

As the industry copes with production cutbacks and a studio plan to shorten theatrical windows to allow "premium VOD" rentals only 60 days after release, though, exhibition badly needs areas of real growth. Microspace's Tilly said that the growth he's seeing these days is focused in the alternative-content arena.

"Feature films are at a relatively steady pace," he said. "On an average weekend we'll see three or four wide releases and a couple of smaller releases. But that remains steady whether they're delivered on film, on a digital hard drive or by satellite.

"Alternative content, though, makes things more interesting, because it's growing in a way that doesn't follow any familiar pattern."