Universal Pictures and Walt Disney are close to finalizing a deal that would all but guarantee the digitizing of the nation's movie theaters, sources told CNET News.
Universal and Disney have agreed in principle to join a consortium of theater chains and motion picture studios that will finance the cost of modernizing movie houses, the sources said.
The sources were commenting on news of the deal, first reported by The Wall Street Journal.
For years, the high costs of outfitting theaters with digital projectors, servers, and other technology stymied modernization efforts. It was always believed that it would take the backing of four major studios to get a deal done.
News Corp., parent company of 20th Century Fox, and Viacom's Paramount Pictures have already signed on. The addition of Universal and Disney will help the consortium, called Digital Cinema Implementation Partners, reach its goal, according to the sources.
The Journal reported that only 5,000 of the 40,000 screens in the U.S. and Canada are outfitted with digital technology. It will take several years after Universal and Disney sign on, which could happen as early as this week, for the transition to be complete, the sources said.
Most of the largest motion picture studios are backing a plan that would create interoperability among digital rights management schemes.
TechCrunch is reporting that Sony Pictures is behind the plan that has the support of most of the top film companies--other than those backed by Walt Disney. A Sony spokesman could not be reached for comment Tuesday evening.
According to Michael Arrington, the plan calls for "a set of policy decisions and a software and services framework that will allow interoperability of various formats and DRM schemes that are currently splintering the market."
The plan also calls for a neutral party to manage a central registry where users would register their devices. Movies purchased from participating services would then play on devices from participating manufacturers.
OK, while acknowledging I haven't heard all the details, the plan at this point sounds complicated and it also calls for competitors to cooperate. This is not an easy thing in Hollywood.
I'm always skeptical of any proposition that requires the studios to agree on standards. Hollywood should also learn from the music industry and abandon DRM now. Consumers have already rendered a verdict on DRM: death.
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