Bel Air Circuit Tag

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.

Day & Date Finally Gets Real, Pt. 1

Day & Date Finally Gets Real

Ever since the home video market was effectively born in 1977 with the launch of the VHS player and the release of The Sound of Music, M*A*S*H, and Patton, people have been eager to watch movies at home as soon after they appear in movie theaters as possible. While it used to take months or even years for a film to see a home release, the theatrical window has been increasingly shrinking.

Movies now typically play exclusively in the theater for a month or so before going to premium video-on-demand (PVOD) services such as pay-per-view or airlines, then to an online digital release such as Kaleidescape or Vudu, then a disc release about 14 weeks after the theatrical run, then to home video services like HBO a couple of months later, and then finally to non-pay TV services. For example, The Lego Movie 2: The Second Part was released theatrically on February 8 2019, and was released for digital download on April 16, with the disc release scheduled to arrive on May 7.

 

But these shrinking release windows still haven’t been enough to satisfy the desire to see movies soon after they’re released in theaters. The biggest thing keeping windows from getting even shorter is the delicate relationship between the movie studios and the theater owners. Studios make millions—sometimes billions—from the main commercial release, and they don’t want to do anything that might hurt the goose that lays their biggest golden egg. Regardless, a few companies have been working hard to have movies available at home the day they’re released.

 

Bel Air Circuit

At the top of the pyramid is the Bel Air Circuit—an invitation-only group of individuals consisting mainly of Hollywood A-list actors, directors, producers, and studio executives who receive just-released movies to enjoy in their personal screening rooms. While this used to require delivering film reels via courier and having a projectionist on site to handle 

the reel-changing chores, members now receive the same digital files sent to commercial theaters. The upside is that most studios make their films available for viewing to Circuit members at no charge. The downside is that unless your name is Spielberg, Tarantino, Stallone, or Cruise, you won’t ever be invited to join.

 

Bel Air Cinema

Very similar in concept to the Bel Air Circuit is Bel Air Cinema. The biggest difference is that unlike an invitation-only, private club comprised of a Hollywood who’s who, anyone with a big enough checkbook can inquire about becoming a customer.

Bel Air Cinema requires the kind of commercial cinema
projection equipment shown here

But your regular home theater need not apply. In fact, even high-end, luxury home theaters aren’t compatible, because Bel Air Cinema is less about home theater and more about creating a commercial theater in your home. That requires a Digital Cinema Initiatives (DCI)-compliant projector and movie server costing $100,000 or more. (Feel free to read the latest Digital Cinema System Specification, Version 1.3—it’s only 155 pages.) And expect to shell out $5,000 or more for the privilege of watching a film, plus annual fees.

Prima Cinema

The first company to make a real go of the day-and-date concept was Prima Cinema. Launched in 2012, with financial backing from companies including Universal Pictures, Best Buy, and IMAX, Prima lets you watch movies at home the day they hit the theaters.

 

Unlike the Bel Air systems, Prima’s hardware works with any home theater technology, providing an HDMI output that can be connected to any brand of AV receiver or processor and any TV or projector. The system includes a massive array of security features, including accelerometers to prevent moving the hardware, unique watermarking for every viewing, and a fingerprint scanner with “liveness” detector. 

Day & Date Finally Gets Real

CLICK THE CHART TO ENLARGE

Prima initially had agreements with just Universal, Lionsgate, Focus Features, Cinedigm, and Magnolia. But after a couple of years in operation, this list expanded to include Paramount, The Weinstein Company, Relativity EuropaCorp, Roadside Attractions, Gravitas Ventures, Samuel Goldwyn Films, IFC Films, and Open Road, meaning a far larger number of titles was available for viewing. 

 

But Prima isn’t cheap. The hardware alone costs $35,000, with movies running $500 per viewing. I have the unique experience of having been the only reviewer to live with Prima—not once, but twice—so I was able to experience the system 

firsthand. And I can confirm it has a wonderful interface for browsing and choosing movies, and delivers pictures in beautiful, better-than-Blu-ray 4:2:2, 10-bit quality.

 

Unfortunately, around 2016, Prima seemed to fall off the map. Movies stopped downloading, and dealers couldn’t get a hold of the company. Prior to this post, I reached out to a new contact listed on the company’s redesigned webpage: Richard Jenkins, Head of Content. According to Jenkins, “We are still operating and hoping to close our current

Day & Date Finally Get Real

investment round by the end of June; once new funding is in place we will then be making an announcement in early July, so please standby—we will update you as soon as we can.”

 

Red Carpet Home Cinema

Earlier this month, the New York Times ran a story heralding the launch of a brand new company in this space: Red Carpet Home Cinema—the brainchild of Fred Rosen, the man behind Ticketmaster, and Dan Fellman, past president of domestic distribution at Warner Bros. Red Carpet is more Prima Cinema (of which Rosen sat on the board of advisors) than Bel Air Cinema since it will work with any traditional AV system but requires a $15,000 piece of proprietary hardware (loaded with security provisions to keep Hollywood content safe from piracy). According to the site’s FAQ, “Movies will be variably priced with the most current films in the low thousands—no movie will be priced below $500.” The Times article mentioned that films will cost $1,500 to $3,000, which will include two viewings within a 36-hour period.

 

I recently spoke to Mr. Rosen, and found him incredibly forthcoming and straightforward about his new company’s plans. He repeatedly said Red Carpet isn’t looking to disrupt the current cinema model, but rather wants to provide a luxury option for

Day & Date Finally Gets Real

Red Carpet Home Cinema co-founder Fred Rosen

home viewing to people willing to pay for it.

 

Rosen said: “We asked the studios, ‘What will it take to make this happen? You set the price and terms.’ The studios said I was the first guy to come in and not try to tell them what they could charge, not tell them how it was going to be.”

 

Red Carpet lists studio support from 20th Century Fox, Paramount, Warner Bros., Lionsgate, and Annapurna, with five titles currently available for viewing: Pet Sematary, Missing

Link, Hellboy, The Curse of La Llorona, and Shazam! But Rosen says he feels pretty comfortable they’ll be able to add more studio partners.

 

“This is a luxury product, of something that is very limited and difficult to get,” he said, “and our customers are willing to pay for the convenience and privilege.” The company isn’t looking for mass sales, but would like to sign up a limited number of affluent clients, saying it would be happy to have hundreds of members in New York and LA, and about a hundred more in each of the largest cities throughout the US.

 

Rosen said there are luxury options available for virtually every other kind of product or service, and Red Carpet wants to provide athletes, movie stars, and just “regular” wealthy people with the freedom to consume content when and how they want. “If a kid can watch a movie on their phone 90 days after it is released for $.99, why can’t there be an early option for the luxury market that is willing to pay for it?”

 

According to Rosen, people last year spent $70 billion on private planes and $60 billion on private yachts. “I’m not saying that’s good or bad, it just is what it is. And if those people want to spend $3,000 to watch a movie in the privacy of their own home, why shouldn’t they have that as an option like any other luxury purchase?”

 

Red Carpet is currently in beta, with several systems installed in both New York and California. When I asked Rosen when the service would come out of beta, he said, “As soon as we make a sale! It’s ready to go now.” For those with the means, Red Carpet Home Cinema is available now throughout the country.

 

In Part 2, I’ll talk about the current status of the much-hyped day-and-date startup The Screening Room, and provide an update on Xcinex, which plans to sell its hardware for a mass-market-friendly $30 and charge for viewings based on the number of people in the room, like at a movie theater.

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.