The Academy of Motion Picture Arts and Sciences is moving forward with a plan to offer Academy members DVD players free of charge that will play specially encrypted DVD screeners. But many of the studios remain skeptical about the practicality of the new approach to distributing screeners, and none would publicly acknowledge Monday that they plan to manufacture encrypted DVDs using the technology developed by Cinea, a subsidiary of Dolby Inc.
In June, Cinea, which specializes in anti-piracy technology, proposed that the Academy adopt the new technology, with Cinea underwriting the cost of the DVD players (HR 6/17). The SV300DVD player lists for $800 but will cost Cinea about $500 per player. After several months of discussions, the Academy is now preparing to send the players to its members by mid-October, unless they return an opt-out card by Sept. 10 to say they are not interested in receiving a unit.
"I'm pleased to announce that the Academy has made arrangements for each member to receive a special DVD player that has been programmed to play encrypted screeners, which a number of the studios plan to create and distribute to Academy members," Academy president Frank Pierson said in a letter sent Friday to his membership.
Although most of the studio executives involved in creating Academy campaigns knew such a letter was in the works, the fact that it is already in the mail caught a number of them off guard, with most of them saying they haven't yet formulated their screener plans for the coming awards season.
In addition to offering the players, the Academy is adopting several screener policies that differ from last year's approach, which saw the studios sending watermarked VHS tapes to Academy members who signed a pledge saying they wanted to receive the tapes and that they would carefully safeguard them.
This year, Academy members will not be asked to sign a similar pledge, which a significant number of Academy members, not wanting to take responsibility for screeners, refused to sign last year.
"Members were clearly most concerned about the screener that goes astray, that was intercepted at their doorstep and somehow becomes the basis of a pirated version," Academy executive director Bruce Davis said. "Under this system, nothing anyone can do can defeat the system, so the pledge isn't necessary."
Last year, the studios also sent screeners only to voting members of the Academy. But Pierson's letter went to members of all the branches, which include both active, voting members and retired members who no longer vote. Only the Academy's associate members, which include such groups as agents and representatives of various vendor companies, are not being offered the players under the current plan.
"So that means that the players will be an Academy perk and not just a way to reach voters," objected one studio executive who asked not to be named.
The main concern -- expressed by many studio execs -- is that the new technology will confound many members of the Academy.
"How is an 80-year-old person without a technician going to put this in their home?" asked Tom Bernard, co-head of Sony Pictures Classics, who said SPC will not use the encrypted screeners. "I wonder how many Academy members without grandchildren can (operate these machines)."
But Russ Chesley, Cinea's head of sales and marketing, West Coast, said: "We will be providing complete customer support. Prior to the player's arrival, voters will receive an information pamphlet describing features and functions, answering frequently asked questions and including contact information to friendly and useful U.S.-based customer support -- ongoing 24/7 call support manned by live humans (that are) all U.S.-based, not an outsourced firm."
Other studio execs are concerned about the costs of licensing the encryption technology from Cinea.
According to Laurence Roth, vp marketing and business development at Cinea, "it is a cheaper solution" than watermarked VHS tapes, which have to be individually encoded.
Chesley estimated that the licensing cost would amount to $5 per disc and that studios could end up paying 50% less than it cost them to produce VHS screeners, since DVD discs are cheaper than VHS tapes; the DVD encryption-replication process, which will be handled by the six to eight post houses that are expected to buy $25,000 encryption stations, will be quicker and thus less expensive; and shipping costs for DVDs will be cheaper.
According to Academy sources, at least four studios have expressed a willingness to adopt the new technology. But a survey of the major studios and a sampling of specialty film units Monday could find no studio willing to commit to using the Cinea system. Most said they were still considering their options and have made no final decision, though at least one studio, which insisted it not be named, said it was leaning against using the new process.
Even if the Cinea/Academy plan moves forward without a hitch, it leaves a number of questions that the studios are wrestling with unanswered.
o If individual Academy members opt not to receive the players, which also play regular DVDs, will the studios send them some other sort of screeners?
o Although Cinea, which has already placed a manufacturing order for 10,000 players, also is making players available to members of the British Academy of Arts & Sciences and is in discussions with the Hollywood Foreign Press Assn. and SAG, how will the studios treat other awards bodies and critics groups that do not receive players?
o Will studios be willing to pay for both encrypted DVDs for the Academy and watermarked DVDs or VHS tapes for other groups?
A number of studios admitted that in promoting films that are available on home video/DVD they will likely distribute unencrypted DVDs since such films are already susceptible to piracy.
"This will be a big story," said Davis, who admitted that Academy officials have not seen an actual player yet themselves. "But we're thinking of this as a three-year process. The machines will be used for at least three years. And the guys who handle the encryption are remarkably confident that they will work."
Chris Gardner in Los Angeles and Ian Mohr in New York contributed to this report.