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So long celluloid... hello digital

A handful of high-tech firms are racing to prepare Hollywood for the digital age, but is it really time for the movie business to bid farewell to celluloid? By MSNBC’s Roland Jones.
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The advent of digital cinema promises a new birth for the movie industry, offering crisper pictures and a faster and cheaper method of delivering films to movie screens. A handful of high-tech firms are racing to prepare Hollywood for the digital age, but is it really time for the movie business to bid farewell to celluloid?

It is hailed by its promoters as the next big thing in the movie business. In the not-too-distant future, boosters say, movies compressed into large computer files will be beamed to movie theaters over fiber-optic cables or via satellite connections. Film projectionists will no longer need to handle awkward canisters of 35-millimeter film, selecting and screening movies instead with the simple click of a mouse.

For moviegoers, the experience of watching a movie will be greatly enhanced. Films stored in digital form won’t degrade over time like their celluloid ancestors, so no matter how many times you screen a movie its picture quality will stay the same.

So, is the celluloid age over? Not quite.

New economy for old Hollywood
Digital cinema technology is certainly a compelling idea. It has the potential to alter the economics of the movie business, saving studios hundreds of millions of dollars in film printing and distribution costs. But its progress has been held back by disputes over who will carry the cost of the equipment, who will manage it and questions about the industry’s willingness to adopt the new technology.

Last December, Technicolor Digital Cinema, a joint venture between high-tech firm Qualcomm and Technicolor, used its newly-developed digital distribution system to deliver Warner Bros. Pictures’ Rat Pack remake “Ocean’s 11” to 19 U.S. movie theaters. The experiment was a great success according to Steven Morley, vice president of technology for Qualcomm’s digital media division: “We had over 1,000 showings and not one equipment failure.”

Although it is more commonly associated with wireless and data communications, Qualcomm is one of the companies at the leading edge of the battle to revolutionize the way Hollywood distributes films and the way audiences view them.

With Technicolor, Qualcomm is marketing a delivery system for digital cinema that includes cinema-management software and encoding and decoding hardware.

In Qualcomm’s digital cinema process, movies are shot digitally or on traditional film then compressed into computer files. Technicolor Digital Cinema delivers the file to theaters via satellite, broadband connection or sends them on DVD disks. At the theater, Qualcomm technology decodes the encrypted file and the movie is ready to be viewed on the movie screen.

“The way it works now is a studio makes a movie and then asks a motion picture duplication lab like Technicolor too mass produce a bunch of prints that they then send to movie theaters,” Morley explained. “What we’re doing is the same thing, only we’re sending a digital version of the film to the theaters.”

Several other well-known companies, including photography giant Eastman Kodak and aerospace firm Boeing, are working to profit from a slice of the digital cinema file compression and delivery business.

High-tech firms like computer chipmaker Texas Instruments and consumer electronics firm JVC are busy developing digital-projection technologies. Texas Instruments’ Digital Light Processing technology is considered to be the leader in digital cinema projection and will be used to screen images shown at this year’s Academy Awards ceremony.

Open standard not established
But with a host of companies trying to muscle into the embryonic technology, which is still in a testing phase at no more than 50 cinemas worldwide, an open digital cinema standard has not yet been established. This is one of the main stumbling blocks to widespread adoption, observers say, although a handful of firms are working to establish technical standards.

Other obstacles include concerns about piracy and the fact that digital cinema equipment is expensive, so questions remain about how big movie studios that distribute films and theater owners can profit from a big investment in the technology. One proposal has been to use the technology to broadcast live sporting events, or concerts.

“I think that cinema owners know that the transition to digital cinema is inevitable, but we don’t have a great incentive to change over to the digital medium,” said John Fithian, president of the National Association of Theater Owners, a trade association for movie theater owners.

A 35-millimeter film projector costs some $30,000 and lasts for about 35 years, Fithian said, but a digital projector can cost $155,000 and might be obsolete in 5 years if technology changes. Theater owners can’t possibly sell more movie tickets to make up the difference in costs, he added.

Fithian also estimates that film studios stand to save between $800 million and $1 billion each year in celluloid printing costs by using digital distribution systems.

“We need to see the big movie studios share some of the cost of the technology because it’s going to save them money,” said Fithian. “We might see this happen through some sort of joint enterprise, but it hasn’t been fully calculated yet.”

Digital cinema technology could transform the balance of power and economics in the industry, according to Qualcomm’s Morley. The challenge now for the movie business is to find a way to shift from an economic model with erratic distribution costs and small capital expense to one with a large capital expense and greatly reduced distribution costs.

“Everyone in this business agrees that this technology will happen, the question is how the business model will work out,” Morley said. So for now, at least, old-fashioned celluloid will live to see another day.