Why Kaleidescape Could Own Day & Date, Pt. 2

How Kaleidescape Could Own Day & Date, Pt. 2

In Part 1, I gave some of the technical reasons why I think Kaleidescape is better positioned than companies like Prima Cinema and Red Carpet Home Cinema to make day & date—the ability to watch movies at home the day they debut in movie theaters—a success. Here, I’ll focus more on the logistical and strategic reasons for why I think it has the potential to be the most viable day & date provider.

 

6) CONTROLLED ROLLOUT

Sure, there are bigger companies than Kaleidescape out there—like, say, Apple or Vudu—that have a lot of studio agreements in place and are set up to handle secure transactions, but day & date isn’t going to be rolled out wide to a mass-market audience.

 

The movie studios want to release this in a very controlled manner so if there’s a problem, they can shove the genie back into the bottle as easily as possible. That just wouldn’t be possible with a $149 mass-market device like an Apple TV.

 

Even if Kaleidescape made day & date available to every one of its customers worldwide on Day One, we’re still talking thousands of systems, or a very small percentage of the movie-watching population. But day & date will probably begin in the US, which would cut the number down considerably. And, it probably wouldn’t be rolled out as a firmware update for all 

Kaleidescape users, but would likely be offered to a very select beta of 50 to 100 power users, whose systems would be updated with new firmware and then monitored during the beta period.

 

Another possibility would be for Kaleidescape to approach existing Bel Air Circuit members to become system owners (or be loaned beta-enabled systems). What group to better give day & date access to than one that already has it?

 

And, while the company won’t publicly comment on system owners, it’s pretty well known that Kaleidescape systems are already owned by many Hollywood A-listers. This 

would be another avenue for a controlled rollout, targeting a select group of influencers who could experience the system in action and become more comfortable with supporting day & date releases.

 

7) ALREADY OWNED BY MANY CINEPHILES

You know who’s going to be the most interested in buying day & date content for viewing at home at premium pricing? Luxury cinema owners who love movies. And you know what system many luxury cinema owners and movie lovers already own? Yup. Kaleidescape.

Why Kaleidescape Could Own Day & Date, Pt. 2

And for those who currently aren’t system owners but who love the idea of enjoying first-run content at home, the price of entry is far more obtainable with Kaleidescape than with Prima or Red Carpet. For under $4,500, someone could buy a Strato S 4K Ultra HD movie player (shown above) with 6 Terabytes of storage, enough to hold about 90 4K Ultra HD movies. This would be affordable for far more people than the .1% targeted by Prima and Red Carpet, and not an unreasonable amount to spend in a luxury media room costing $25,000 or more.

 

8) INTEGRATION PARTNER CHANNEL

End users aren’t going to be able to just stroll into a Best Buy, pick up a day & date system, take it home, and install and activate it themselves. Something this sophisticated and bulletproof requires professional integration and handholding.

 

While I’ve no doubt Red Carpet will be able to find a dealer base—though Prima might have a harder row to hoe should they return to operation—Kaleidescape already has an established and reputable dealer network.

 

Since its inception, Kaleidescape has worked hand-in-hand with the custom installation channel, having some of the best CEDIA and HTA-certified members in its ranks, ensuring that its hardware is properly installed and configured. Realizing that its systems are only as good and stable as their installation, Kaleidescape only sells through a network of custom installers that can handle complete installation and system integration. This also ensures that the system works with the customer’s control system and is calibrated with their video and audio system, and that the network is configured for a stable experience.

 

9) PROVEN LUXURY TECHNOLOGY

When Kaleidescape hit the market in the early 2000s, the first system sold for more than $30,000, which obviously meant only a small subset of home theater owners could afford it. Almost 20 years later, the luxury market remains Kaleidescape’s core demographic.

Kaleidescape systems also have a phenomenal reputation for bulletproof operation. Every system includes dealer tools like remote system health monitoring and automatic notifications should a system have an issue such as loss of network connectivity, overheating, or hard disc trouble. This allows dealers to address problems proactively before there’s a loss of operation.

 

Unlike other companies, which are outsourcing their hardware or software, Kaleidescape has end-to-end control over every aspect of its system. It runs its own Movie Store and handles all movie encodes (see “How Kaleidescape Makes Movies Look Amazing”), and has 

dedicated engineering and tech support teams. In short, if there’s ever a problem with any aspect of a Kaleidescape system, there’s one clear route to getting it resolved.   

 

10) COULD CO-EXIST WITH OTHER PREMIUM OFFERINGS

In my conversation with Red Carpet’s Fred Rosen, he said they asked the studios, “What will it take to make this happen? You set the price and terms.” So presumably the studios feel day & date content is worth somewhere in the $500 to $3,000 range.

 

Frankly, these prices seem untenable for most Kaleidescape customers, and I question how many among even the ultra-wealthy are willing to buy a movie for viewing at such a massive premium. Or how often they would choose to do so beyond a once- or twice-a-year novelty. (Honestly, for $3,000, you could just call up a theater, buy every seat, and have your own private screening.)

 

But, for the sake of argument, let’s assume Red Carpet—and even Prima, upon return—establishes this as the price for day & date viewing. Kaleidescape could then decide to establish itself as a premium video-on-demand solution for early theatrical release, offering movies just after that first week or two when most films bring in about 90% of their box-office take.

Let Red Carpet and Prima charge $500 to $3,000 for the privilege of being able to see a movie at home on opening day. Kaleidescape could then make it available after the first week for, say, $300, then maybe $200 after the second week, dropping to $100 after the first month. At these tiered prices, Kaleidescape owners could regularly consume premium theatrical content without having a significant impact of the theater owners’ bottom line.

 

Think of this as being akin to air travel. You have the money-no-object group of private jet owners who think nothing of dropping millions on the plane itself and then thousands in operational costs for each flight. That is the Bel Air Circuit crowd. Then you have those who prefer fractional jet ownership via companies like NetJets. While by no means inexpensive, this has far lower buy-in and pay-by-hour operation costs. This would be the Red Carpet and Prima customer. Then there are people who still want a luxury travel experience but don’t care to shell out the ultra-premium costs for private travel, opting to fly First Class instead. This would be the Kaleidescape customer.

 

 

When I asked Kaleidescape about possible day & date plans, the company’s official response was, “We won’t comment on any speculation or rumors.” But it doesn’t take a lot of imagination to connect the dots and realize that the company would be keenly interested in pursuing this potentially game-changing feature. In fact, one need only read the comments CEO Cheena Srinivasan gave in an interview a couple of years ago. When asked about Kaleidescape’s possible involvement with day & date, he said:

 

I believe in the concept of offering new-release movies still playing in the neighborhood theaters to luxury home cinema customers. It will become a reality.

 

According to a recent survey by MGM Resorts, watching movies in a movie theater was cited as the most popular way to be entertained, followed closely by watching movies at home. People who own a luxury home cinema have little need to go to a theater. They would rather wait until the movie is released for home viewing.

 

Since theater owners lose no revenue from people in this category, a premium-priced rental for this audience during the theatrical window won’t cannibalize the exhibitors’ revenues. For the content owners, monetizing content from this audience makes good business sense. We’re well positioned to offer such a service—it is not a technological barrier, as Kaleidescape is already regarded as a respected supplier of both products and content designed with the highest content-protection safeguards available in the market today.

 

Again, all of my comments here are just speculation and conjecture, but movies are being made available at home sooner and sooner after they’re in theaters, and premium day & date services already exist. So the big question isn’t whether day & date is going to happen, but who’s in the best position to offer it securely and reliably over the long run.

John Sciacca

Probably the most experienced writer on custom installation in the industry, John Sciacca is
co-owner of Custom Theater & Audio in Murrells Inlet, South Carolina, & is known for his writing
for such publications as
 Residential Systems and Sound & Vision. Follow him on Twitter at

@SciaccaTweets and at johnsciacca.com.

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