"Digital Cinema: On the Horizon" was a topic I addressed several months ago for Post magazine. The thrust of the article was that digital technology for delivery and exhibition of films has been like the horizon: we keep moving towards it, but never arrive.

For some time I have believed that although there are still a number of areas that could use improvement, the technology side of digital cinema is well in hand. Film transfers, digital storage, electronic transmission, and the last link in the digital cinema chain, projection, are working at very acceptable levels. Improvements would continue during the normal course of events.

Those who attended the recent Giant Screen Theater Association Mid-Winter Meeting in Dallas were treated to a preview of the latest Digital Light Processing (DLP) projection technology at the Texas Instruments headquarters. Any naysayers in the group when we walked in were probably converts by the time the presentation was over.

With more than 30 digital cinema locations around the world, the various hardware, software, and telecom companies can test their developing technologies in real-world settings. The only remaining obstacle to a quicker roll-out of the technology seems to be financial.

The financial problems of the major exhibition chains are now well known to everyone. Their spending the kind of money that a large-scale conversion to digital cinema would require, or even half that amount, seems highly unlikely at this point.

But finances, like beauty, are in the eye of the beholder. What might be expensive for me might be downright cheap for you. We all have different values and different ways of assessing what kind of return we need on an investment and how those investments fit with the rest of our portfolios.

So although digital cinema technology has not gotten significantly less expensive since I wrote that article, what has changed is that several of the exhibition chains that have been on the sales block in one fashion or another are now being actively acquired by several well known financiers.

At this writing, Philip Anschutz has formalized plans to make a significant investment in California-based Edwards Theatres Circuit, with Oaktree Capital Management, LLC, as his partner. Anschutz, headquartered in Denver, has already acquired a majority stake in United Artists Theatre Circuit and is currently in negotiations to take control of Regal Cinemas, the world’s largest cinema chain. If both deals are concluded, he will control more than 6,400 screens in the US.

Loews Cineplex Entertainment, North America’s second largest circuit, recently filed for bankruptcy protection and subsequently announced that it will be bought by Canada’s Onex Corp., Pacific Capital Group, Inc., and Oaktree Capital for $850 million. (Oaktree seems to get around.)

All four of these theater chains operate IMAX theaters, with a total of 17 among them, and a backlog (as of this writing) of 7.

By purchasing these companies at distressed prices, the new owners should have a lot of flexibility in how they can proceed. Having a clean slate allows them to make decisions on how many of their locations, including their IMAX screens, will remain open. Further closings of the older, less profitable screens seem to be in the offing, especially with the court protection that is available.

So, nice story, but what does this have to do with digital cinema?

Anschutz, ranked number six on Forbes magazine’s U.S. net worth list with a reported fortune of some $18 billion, made his first fortune in oil. In the 1980s he acquired the Southern Pacific Railroad, made it profitable, and then used its extensive rights of way to lay fiber-optic cables for his upstart telco Qwest Communications.

Qwest has been one of the leading telcos in the bid to bring high-speed, high-capacity connectivity to the major Hollywood studios and the myriad of film and TV production and post-production facilities.

Pacific Capital, one of the new investors in Loews, is the investment bank operation of Gary Winnick, founder of Global Crossing, a major telecommunications holding company. Although not up at Anschutz’s level of the Forbes list — only number 68 — Winnick is no pauper: he has an estimated worth of $3.2 billion.

On its Web site, Global Crossing boasts "the world’s most extensive global IP-based fiber optic network, which will have more than 100,000 route miles, reaching 5 continents, 27 countries, and more than 200 major cities by mid-2001."

These are not the only two well heeled players to be involved in the electronic delivery of films. Last fall, Miramax used Boeing Satellite Systems’ Cinema Connexion system to wirelessly bounce a digital copy of the feature film Bounce, starring Gwyneth Paltrow, to an AMC theater in New York.

In March, Boeing, along with Cinemark, National Amusements, TI, and a few other companies will launch Broadway Cinema™ with the live world premiere of Jekyll & Hyde: The Musical starring David Hasselhoff from New York City’s theater district. According to their announcement, "Broadway and movie lovers in seven cities across the country will have the opportunity to experience state-of-the-art digital cinema technology blended with the world’s finest live entertainment content: Broadway musicals captured live in performance."

(Texas-based Cinemark owns five IMAX theaters, and has seven in backlog, and National Amusements, in Dedham, MA, has been looking into LF theaters: it may take over the empty shell at L.A.’s Howard Hughes Center that was to have been an Edwards IMAX theater.)

Miramax, an independent subsidiary of the Walt Disney Company, has released a couple of its titles on digital cinema screens. Disney has taken the lead in the number of films exhibited digitally. However, those films were not transmitted over satellite or fiber optic cable, but were physically delivered on computer hard drives to the theaters. Full electronic delivery is most likely Disney’s next step when costs drop further.

All of the pending deals have a way to go before they are signed, sealed, and delivered. However, trade reports do not seem to suggest that significant obstacles stand in the way. Of course, even after the deals are closed, there will be many things to do before digital projectors are installed en masse.

But make no mistake: digital cinema just got one byte closer.