The Digital Revolution

Coming to a theater near you?

| July / August 2005

It's been six years since director George Lucas whetted the public's appetite for digital cinema with the release of Star Wars: Episode I, yet America's major studios and movie theater chains have yet to embrace the technology.

Most Hollywood movers and shakers concede that, just as the Internet has changed the shape of the music industry, a digital shift in film exhibition and distribution is inevitable. However, just as the corporate music labels have been slow to embrace progress, those with a financial stake in the movie business are likely to continue wringing their hands over specific legal and technical standards, the cost of conversion, and, most importantly, how to divide the box office grosses.

Studios and distributors spend hundreds of millions of dollars a year creating film reels and circulating them to theaters around the world. In the digital realm, movies can be delivered electronically using satellites or centralized servers at a fraction of the operating expense. Once a way to pay for the costly upgrades is settled on, theater owners will be able to display these hi-fi movies using large hard drives and digital projectors; it remains to be seen whether or not they would continue to show both digital and analog films, or for how long.

Ironically, when it comes to exhibition, the world's dominant exporter of movie magic is behind the global curve. In March, a consortium of investors announced a deal to digitally retool 500 screens in Ireland, where movies will be streaming via satellite within a year; other European countries are in the process of doing the same. There are already hundreds of digital venues across Asia, specifically in China, Singapore, and India.

In the United States, exhibitors are finally getting a prod from high-profile tech mogul and Dallas Mavericks owner Mark Cuban, who also co-owns the 270-screen Landmark Theatres group, known especially for screening foreign and art house films. Determined to create America's first all-digital theater chain, he's begun the process of upgrading all Landmark screens at his own expense. He also plans to pipe in live concerts and sporting events via satellite. In a recent profile published in Wired (April 2005), Cuban made clear that he won't be held back by his old-school Hollywood counterparts, who often claim to lack digital enthusiasm for fear of piracy. Cuban believes the leap toward digital distribution won't leave studios much more vulnerable to illegal duplication than they already are. Annalee Newitz, policy analyst for the nonprofit Electronic Frontier Foundation, agrees. 'First of all, any digital films are going to have watermarks that would make it very easy to trace any copies back to the theater that showed them,' she says. 'Second, you'd have to have incredibly expensive, elaborate equipment to convert a theater-quality digital film into something small enough to distribute on a file-sharing network.'

Besides, Newitz adds, most piracy takes place at the movie studios, where employees with access to prerelease versions of a film will use everything from DVD burners to 'the old Web-cam-in-the-theater trick' to create copies.

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