Digital Delivery Dynasty: DCDC Celebrates Five Years

The world moves fast, but technology moves faster. Five years may seem like nothing, but for the Digital Cinema Distribution Coalition, or DCDC, it’s enough time to bring cinemas in the U.S. to the next stage of distribution technology.

“The idea for an electronic delivery system for digital content arose in about 2007 at Warner Bros.,” explains DCDC CEO Randy Blotky. “There were a couple of executives there who decided that it would be very silly to have the whole industry converting to digital projection and storage, yet still be delivering hard drives to them.” Hard drive delivery prices, at that time, were in the $150–$250 range. That’s nowhere close to the four-figure print costs that had come before, but still, there had to be a cheaper, more efficient way.

And so AMC, Regal, Cinemark, Warner Bros., and Universal decided to figure it out. The companies joined forces to found DCDC, with Blotky—uniquely suited to the new venture due to his background in the entertainment industry, law, and physics—at the helm. “It’s the first time in the history of the industry that the people from those different backgrounds, who are usually at war with one another, got together and were actually able to agree on [something]. And, even more importantly, to fund it,” says Blotky. “They put their money where their mouth was.”

Five years later, that shared effort has yielded positive results for the film industry. Thirty-two thousand screens, representing approximately 80 percent of the screens in the U.S., are served by DCDC. These screens are able to receive movies, event cinema content, in-theater advertising, and more at a cost of less than a third of what it took to deliver hard drives.

“We don’t charge the exhibitors anything for putting our equipment in there,” says Blotky. “We put our rack in their control booth. We install the equipment. We pay for that. We maintain the equipment. We pay for that.” The theaters pay for two things: To fix damage they themselves have caused, and the amount of those decreased delivery costs, which, Blotky emphasizes, “are the same whether you’re a Regal, one of the largest exhibition chains in the world, or if you’re a small theater in Idaho.” 

Those costs won’t rise, either, which Blotky admits caused some skepticism early on. “[People would ask], ‘If you’re the only game in town, then you’re going to be a monopoly, and you’ll raise prices, right?’ I said, ‘No, absolutely not. We will never raise prices.’ And we haven’t … I was a veteran entertainment lawyer for a long time before I went into the industry. If you tell people that you’re not going to do something, and then you go do it, they’re never going to trust you again. And trust is the foremost thing in our mind.” 

(If you’re wondering, ‘Wait, what’s the downside?’—Blotky has heard that question before. “There’s really no barrier to entry at all,” he argues. “As I went around and had conversations with content providers and exhibitors in the early days, they would say ‘It seems like a no-brainer. Are there any reasons why I wouldn’t do this?’ And I said, ‘Just fear. Fear of the unknown.’”)

One word comes up again and again as Blotky discusses DCDC: “Collective.” He labels his attitude as “a matter of personal philosophy … All the profits, if there are profits, go back into the business” to keep it running. The point isn’t to make money, he says, but to improve the industry as a whole.

Five years down the line, DCDC has managed to do just that. One of the main goals set by the company when it was founded was to pay back its original investors, after which point its customers—almost 300 exhibition chains and over 50 content providers, including all the major studios—would begin getting rebates “in proportion to, essentially, how much revenue they’ve been responsible for over the course of time.” This year, Blotky predicts that it will finally be time for them to begin cutting those rebate checks.

That’s not the only change that Blotky’s considering as DCDC moves steadily toward the decade mark. “We’ve had interest from international exhibition and content-providing communities,” Blotky notes. As satellite technology improves, the signal required to deliver content will be available from anywhere in the world—and, with the tech angle ready to go, DCDC “will have the lowest cost and the best history of being able to deliver different kinds of content to different places.” In terms of expansion, they’ll start looking at “Europe and Latin America, Australia, and probably Asia as well.” 

Before they can get to that point, however, DCDC is prioritizing the optimization of its service in the United States and, later, Canada. That means, in part, getting to the 8,000 screens they have yet to serve, many of which belong to smaller cinemas that play second-run films and are thus not ideally suited to the satellite delivery model.

Of the screens that DCDC does serve, some of them still use the old “send me a hard drive” model by necessity. These are the “satellite-challenged” theaters, places where the signal required to deliver content can’t reach. That doesn’t necessarily mean we’re talking about a remote location; often, theaters in big cities are satellite challenged if they’re blocked by a tall building. For those theaters, DCDC is working on delivering files via terrestrial means, like fiber connections or underground cables. The goal, Blotky explains, is to “become a fully hybridized network”—one where each site is outfitted with more than one modality of delivery.

But satellites themselves are improving. Various companies and tech moguls are experimenting with low-Earth-orbit satellites, whizzing past at around 150 miles above the planet’s surface. These satellites, arranged in configurations called constellations, “will basically blanket the Earth within three to five years,” Blotky explains. At any place on Earth, with the right antenna, a person—or a cinema—can pick up those signals. That means an increase in the number of cinemas DCDC will be able to reach. 

What it also means is that there will be an increase in the types of content DCDC will be able to deliver. Just one example—but an example that speaks to the vast potential to be found in this kind of tech—is in the area of esports. 

Every year in Incheon, South Korea, fans crowd into a 50,000-seat stadium to watch the world finals of “League of Legends,” a massively popular video game with players around the globe. Companies like Ymagis Group and MediaMation have begun investing in video games as a communal, in-theater experience. The potential—not to mention interest—is there for fans of esports to congregate and watch competitions at movie theaters. Once satellite technology evolves, theaters half a world away from each other will be able to communicate within milliseconds, enabling exhibitors to take full advantage of this burgeoning niche. 

That’s not here quite yet. But with the support of its founders behind it, DCDC is here to stay. So the improvements will just keep coming, moving at the speed not of light, but satellites. “It’s fascinating what it is that can be done,” Blotky says. “We’d love to find ways to create the same kind of partnerships that gave birth to DCDC elsewhere. It really was the combination of exhibition and production that’s driven the success of it. My hat’s off to these guys. They started early on and stuck with it. And it’s worked out. The next five years are going to be really, really interesting.”

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