How Christie’s retiring Jack Kline made digital movie projection an actual reality

Like it has most 21st Century endeavors, digital technology has fundamentally altered the movie business.

Photochemical film, which was the basic stuff of movies for more than the first 100 years of production and exhibition, has all but disappeared from sets and editing rooms. Just as significantly, though, movies are now shown digitally in some 160,000 theaters around the world, delivered to projection booths on compact file folders called Digital Cinema Packages instead of in bulky, heavy cans of 35 millimeter film on reels.

This massive exhibition changeover has occurred in less than 15 years. And Jack Kline, who will retire Monday as president, chairman and CEO of Cypress-based Christie Digital Systems, was instrumental in making it all come about.

“I was hired by Tom Christie back in 1979, and it’s been a pretty amazing time,” said Kline, a military brat and former Marine, who started as a national sales representative for the Academy Award-winning projector company established in 1929. “From a technology standpoint back then, we were a 35-millimeter film projector manufacturer. It was all about the analog world, as was everywhere. Digital was just nowhere, anywhere on the horizon.

“To see something that doesn’t change for over 100 years and then in less than 15 years this (replacement technology) just balloons and explodes . . . It’s not an evolution, it’s a revolution,” Kline continued. “And it was fun to see how this thing rolled out.”

Well, if you can have fun with chronic headaches. From designing and building the new digital projection systems to convincing customers that they needed them and then figuring out ways to finance and subsidize the massive, worldwide refitting effort, Kline and the Christie team had to innovate with all of their skill and imagination.

As Kline rose through the ranks to executive positions in the 1990s, Christie was riding a boom in multiplex construction, its factory buzzing seven days a week to provide 35 mm projection systems for mushrooming megaplexes with 25 and 30 screens. Shortly before the turn of the century, though, a Christie engineer saw a demonstration of Texas Instruments’ three-chip DLP (Digital Light Processing) tech, and reported to Kline that it would soon not just be ready for prime time, but was destined to take it over. Kline met with experts and tech manufacturers, and became a believer.

“I was convinced that it was going to happen from a technology standpoint,” he said. “There were lots of issues that had to be addressed, but my philosophy has always been that technology will always win. It may not have a direct course, it may go in different directions, but eventually you cannot stop technology. It will move forward.”

So Kline got serious. He convinced Christie’s parent company, Japan’s Ushio light technology firm, to let him acquire the Canadian DLP projection company Electrohome and to get the first license from Texas Instruments for their cinema technology. Christie invested around $100 million in developing its system through the first five years of the 21st Century, and eventually found an investor, AIX, to raise capital for the deployment. In 2005, the Carmike theater chain signed the first major contract for Christie’s digital system. Installations began the next year.

“We were deploying units and there was still development work going on,” Kline admitted. “So we were rewiring the plane in flight, working through issues as we were shipping and installing hundreds of projectors per month.”

 

To get enough theater operators on board, however, Kline had to figure out a way to rewire their thinking. The major movie studios all quickly realized that digital distribution would be great for their bottom lines. Making and shipping 35-mm movie prints were about $1,500 a pop, and DCPs cost one-tenth of that.

But many exhibitors, understandably, were in no hurry to replace the 35-mm projectors that had been so reliable for decades with this new computery thing from Christie (or other makers such as Barco, NEC and Sony that were getting into the business) at $100,000 per unit.

So Kline came up with the Virtual Print Fee concept. Under that plan, the studios paid Christie/AIX whenever a movie played on one of its projectors, and Christie used that money to amortize the cost of the machines. The VPFs gradually came down and paid off the projectors, then went away. Though there were associated installation and service payments, this saved the theater folks tons of money.

“Obviously, it was so capital-intensive that exhibitors needed some help in the beginning to get shifted over,” recalled Don Tannenbaum, a Warner Bros. distribution executive at the time, who worked closely with Kline. “The Virtual Print Fee became the way for them to do that, for us to actually transition the entire industry over.”

Tannenbaum is now chairman of the Inter-Society for the Enhancement of Cinema Presentation, a nonprofit made up of groups such as the National Association of Theatre Owners and Society of Motion Picture and Television Engineers, and dedicated to promoting exactly what its name says. In 2014, the Inter-Society honored Kline with its coveted Ken Mason Award, which is given for “outstanding long-term contributions leading to the overall improvement of the motion picture experience.” Another Christie executive, vice-president of cinema sales Susie Beiersdorf, has been tapped to receive this year’s Mason Award at the big industry confab CinemaCon in Las Vegas next week.

“Jack has always thought ahead and was willing to pivot,” Tannenbaum said of Kline. “At the time, people were trying to protect themselves; you know, no one likes change. But he had the vision, that I shared, that there would be so many benefits attributed to digital cinema.”

The conversions, and subsequent explosion of new cinemas in China and other parts of the world, fueled an increase in Christie’s sales during the digital boom years from a few hundred million to more like $1 billion annually. You didn’t have to be a major studio or national theater chain to benefit from what Kline put into place either.

 

“We have Christie digital projectors in all our venues,” Gregory Laemmle, president of Southern California’s Laemmle Theatres arthouse chain, noted. “When the digital conversion came about, Christie was the one company that really seemed to hear our concerns about how the Virtual Print Fee concept could impact arthouse exhibitors and the smaller distributors who we work with. Christie came up with VPF agreements that helped alleviate the fear factor, and we and our distribution partners were able to manage the digital conversion in a relatively seamless manner.”

One drawback to the whole VPF scheme? Christie had to warranty its projectors for 10 years, or until the agreements timed out. Despite that early in-flight rewiring, the company’s engineers rose to that challenge a little too well.

As digital projection reached saturation in the last couple of yeas, Christie saw a dip in sales, Kline admitted. But with new movement toward digital projection via solid state, laser light – an Ushio specialty – gaining traction, there’s more retrofitting on the horizon.

As he moves into an executive advisory position at Christie for the next year, Kline feels that technology will inexorably keep opening new avenues. And while he understands why some big-name directors such as Quentin Tarantino and Christopher Nolan still prefer film over digital, Kline can’t help but see the advantages in the digital future he’s helped bring about.

“My happiest days were in the ’90s, when we were building film projectors,” Kline said. “There’s no doubt about it. But technology moves on, and you have to separate the business viability and the performance viability from the emotional aspect of film. The things that we have been able to accomplish with digital technology, you could never do with film, like these 100-foot screens illuminated at light levels that actually show the detail. And I know that people were in love with the scratches on film, but it really didn’t enhance the moviegoing experience.

“At the end of the day, nobody wants to go back to landlines and pay phones, they adopted iPhones,” he pointed out. “It’s separation anxiety, in my opinion.”

Speaking of which, how does Kline feel about lowering the curtain on his 40-year career?

“I think it’s time,” he said. “I’ve sort of been instrumental in laying out a direction and it’s time now that younger minds can take it to the next step. Because there’s more to be done.”