Financing the Conversion to Digital Distribution of Movies

Disney Deal Backs Digital Distribution [pdf]

In addition to the cost savings, digital distribution allows studios to release movies simultaneously worldwide via satellite transmission, a method they hope will reduce piracy by feeding international demand for newly released movies. The current method of distributing physical film prints limits how widely studios can get their movies out at the same time.

[…] Disney’s deal calls for AccessIT to provide Christie projection systems to theater owners. In turn, Disney promised to pay AccessIT a fee for each digital copy of its movies. The fee is based on the difference between Disney’s cost of distributing a film print and the cost of digital distribution. On average, film distribution costs $1,300 to $1,500 per print, whereas digital distribution via satellite broadcast or DVD costs about $200, AccessIT Chief Executive Bud Mayo said.

Disney also committed to distributing most, if not all, of its 16 to 18 new releases next year in both digital and film format, Viane said, helping boost the number of movies available to keep digital screens occupied and theater owners happy.