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Friday, November 14, 2003 - Page updated at 12:00 A.M.

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Boeing pulls out of digital cinema, to sell division

By Jon Healey
Los Angeles Times

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Unwilling to wait for Hollywood to distribute more movies digitally, Boeing announced yesterday that it was looking for a buyer for its El Segundo, Calif.-based digital-cinema division.

Boeing will continue delivering digital versions of movies via satellite to the 30 theaters that use its technology. Instead of relying on film reels and conventional projectors, these theaters store movies on hard drives and display them with computerized projectors.

But digital cinema won't take off, spokesman Fernando Vivanco said, until the industry adopts standards and comes up with the right business model for it.

Boeing is the second major company in the field to head for the exits early. Qualcomm of San Diego, Calif., announced in August that it was dropping out of its digital-cinema partnership with Technicolor, a Camarillo, Calif.-based subsidiary of Thomson.

Boeing got into the arena about three years ago, a few months after Technicolor and Qualcomm joined forces. Vivanco said its unit, which employs about 12 people, had delivered more than 18 feature films in digital form since then, while Technicolor Digital Cinema, which delivers movies digitally to 57 theaters, has handled more than 50 films.

Although studio executives say digital distribution could save hundreds of millions of dollars, the industry has been divided over how much detail digital projectors need to deliver and who should pay for the equipment, which costs up to $200,000 per screen.


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