Historically, cinema standards were created after the fact. In fact, they weren’t called standards. The earliest collaborative cinema document from SMPTE is an Engineering Guideline dating back to the late 70’s. In the 80’s, SMPTE moved on to publish Recommended Practices, and only began to jointly publish standards with ANSI in the late 80’s. These documents recorded actual practice. As cinema moved into the digital domain, two new concepts emerged in the standards process: collaborative invention in committee, and RAND licensing. Both need review.
The concept of inventing cinema standards in committee arose in 2000, when the digital cinema standards effort began. Invention was required out of necessity: no suitable technology existed. Those who would invest in the technology needed others to determine what the technology was. Studio technology executives, fresh from the standards room for Blu Ray, slowly learned that their newly gained expertise wouldn’t transfer to this industry. To avoid proprietary technologies, a process of “collaborative invention” was needed. That process worked at that time. But the conditions that led to that process no longer exist. Something else is needed.
Then there’s the issue of licensing. The home entertainment industry has benefited immensely from collaborative efforts where technologies are pooled and joint licensing takes place. The concept of reasonable and non-discriminatory (RAND) licensing terms work: technology providers in home entertainment look forward to selling 10’s of millions of units, and RAND terms encourage collaboration. Cinema, on the other hand, is not home entertainment. Technology providers in cinema at best sell 10’s of thousands of units. RAND licensing terms simply don’t exist in cinema, because the business volume isn’t there to support it. RAND terms do not work in cinema. But the attempt to apply it continues, anyway.
The low business volume in cinema has often led to the embrace of monopolistic technologies. Dolby noise reduction for analog film sound perhaps the most famous. The intent to avoid monopolist technology drives the attraction to collaborative effort. It’s good that the momentum and spirit of collaborative effort from pre-rollout digital cinema continues even today. The shame is that this valuable spirit will soon dwindle if the degree of unproductive output continues. The facts are striking. Of 34 digital cinema standards now in publication, only 14 have found their way into wide use. Stated differently, nearly 60% of the effort in SMPTE brings no benefit to industry.
SMPTE is a rule-based organization, and according to its rules, any member can initiate a standards project, subject to approval by peers, who must also approve the project within the parameters of SMPTE rules. But the threshold for project approval is too low: the low rate of utilization is strong evidence that a higher threshold is needed.
What’s missing in the project approval process is an analysis of business issues. A major reason for standards failure is the absence of an economic incentive to adopt. Incentives include improving the competitive nature of the market, delivering an economic benefit to all parties for whom the standard incurs a cost, and more direct incentives such as a subsidy to reward adoption. These may appear as common sense, but rarely are they met. More typically, a standards project is initiated by those for whom the standard would incur a savings. Those who would incur the costs simply ignore it. Text-based 3D subtitling comes to mind, where the standard, if widely adopted by exhibitors at their expense, would reduce costs carried by content producers. Because the benefits are unbalanced, there is no incentive to adopt it. Then there’s SMPTE DCP, which is simply a cost to anyone who touches it.
Currently, SMPTE rules allow any standards project to be formed based on having a single proponent. This threshold is too low. It doesn’t allow a committee to differentiate between projects that will naturally be driven by economic benefit, from projects that are economically unbalanced and unlikely to have an impact on the market. A business analysis should be required of all projects, and committee members allowed the right to vote against a project based on lack of evidence for market adoption.
Intellectual property in a standards project can also lead to problems. SMPTE, as with any standards body, has strong rules regarding intellectual property in standards. Owners of standards essential patent claims must state that they will license under reasonable and non-discriminatory (RAND) terms. In addition, standards developers are free to choose technologies that do not require licensing. But in cinema hasn’t a history of “fair and reasonable” licensing, simply because there isn’t a history of licensing whatsoever. Innovation within cinema’s small market volume can be difficult to obtain without a monopoly. The DCP is a rare exception, an example of innovation without claims to intellectual property. But Dolby Atmos (sorry, Ray, for picking on you twice) is an example of innovation backed by intellectual property.
One can argue that cinema best benefits from non-proprietary or at least non-royalty-based technologies. JPEG 2000 is an example. AES encryption another. There was conscious effort in the early development of digital cinema to avoid technologies that would incur royalties. But the mechanism to discriminate based on royalties is limited in SMPTE to a proclamation of agreement with RAND licensing terms. This isn’t enough.
Cinema technology providers need to know more than an assurance of RAND: they need to know exactly what it costs. This requires sharing of license terms, most likely under a non-disclosure agreement, directly with interested parties. This step is not required by SMPTE. Or better yet, an allowance in committee rules to differentiate based on royalty-free licensing, and any constraints to royalty-free terms.
One might think that participants would simply drop out, and the committee fold, if they didn’t see an economic benefit in a standards project. But such situations tend to play out in non-intuitive ways, where participation becomes a defensive move to make sure no harm is done. It’s possible, and is happening now in one particular standards effort, that none of the major technology providers in a committee intend to implement the technology. But no one in the committee will “blink,” because no one wants to be identified as the party spoiler. Such efforts are a waste of time, and the result of inadequate SMPTE rules. The cinema standards process require rules tailored to the cinema market. That should be the new rule.