The Digital Death of Film?

May 9, 2002 -- For millions of science fiction fans, the May 16 release of Attack of the Clones couldn't come soon enough. But for creator George Lucas, the latest installment of the Star Wars legacy may be coming out a bit sooner than he would have liked.

Why? Because most moviegoers won't see the latest episode of the space opera saga the way that Lucas had expected: in a theater that uses state of the art digital movie projectors.

For years, the motion picture industry had been toying with the idea that such systems would replace film projectors that haven't changed much since the days of Thomas Edison. And proponents say that movies stored and displayed from digital computer files instead of celluloid film stock would offer tremendous advantages.

Digital movies don't degrade like film-based motion pictures, which means images stay as sharp and free from visual defects no matter how many times its played. And since the movies are in essence large computer files, they can be sent to digital theaters more easily and cheaply than heavy reels of film.

Click here to see how a digital movie projector would work.

And for Lucas, such potential prospects meant it was time for his empire to strike. His movie production house, Lucas Films, spent a reported $100 million in 1999 to buy new high-definition video cameras in order to produce Attack of the Clones in a completely digital process. The hope: There would be at least 500 theaters in the United States using the new digital projection technology to display his hard work perfectly.

Pricey Projectors

Unfortunately, Lucas and others that have high hopes for pristine digital movies will have to wait a while longer.

Out of the approximately 75,000 movie screens in the world, only 50 are equipped for digital projection. And in the United States, less than one-tenth of the 35,000 screens are ready for digital movie displays.

According to John Fithian, president of the National Association of Theater Owners (NATO), the transition over to digital cinemas has been slow going mainly due to cost.

"A top of the line [film] projector costs $30,000 and lasts 30 years," says Fithian. "A top of the line digital projector costs $150,000. The financial comparison doesn't make sense."

And although switching over to a film-less distribution method could save Hollywood an estimated $1 billion a year in costs associated with printing, shipping and storing reels of film, for theater owners, there isn't any clear cut cost savings or advantage to switching over to the new technology so soon.

"If they can save money in distribution, [digital projection technology] obviously makes sense for [studios and distributors]," says Fithian. "But that's not for us. It's about giving our customers a satisfying experience."

Moviegoers Aren't Fully Focused

And for now, some question what kind of experience moviegoers get with the new technology.

Noted film critic Roger Ebert of the Chicago Sun-Times has been one of the most vocal opponents to the new technology. At a recent industry trade show, Ebert implored theater owners not to ditch film for digital files since he believes digital projection has yet to match the best that film can do.

"In my opinion, digital does not look as good as film," says Ebert. "I am amazed at how oblivious most moviegoers are to picture and sound quality."

But NATO's Fithian isn't surprised at some customers' indifferent reaction. He says that at the many test digital screenings he's attended and monitored, many moviegoers can't tell any significant difference in digital exhibitions. "If you don't tell them [it's digital], you don't see any reaction," says Fithian.

More Than Just Movies

Still, proponents of the technology say that theaters have much to gain by making the switch to the new digital systems.

For one, movie theaters with the technology aren't limited to showing just digitally created movies or films converted over to the digital format. Since these projection systems can display almost any digital content — from digital satellite signals to DVDs to digital cable — cinemas could become "event destinations."

"On weekends, the theaters are thriving," says Glenn Kennel, the program manager for the digital cinema unit at Kodak. "But look at Monday night or early in the week and the attendance is really low. Other types of features — concerts, Broadway productions or classic movies — might pull in different audiences."

Cinema Hollywood, a privately-owned theater chain in Birch Run, Mich., has been experimenting with just such "alternate venues" for the past three years — and claiming some success.

Paul Glantz, the managing member and owner of the theater chain, says that the company has been using a digital projection system in one of its 18 auditoriums to show pay-per-view wrestling from the local cable or satellite systems. The theater pays a licensing fee — much like a sports bar or other venue pays — to show the event publicly but charges attendees only $6 to see the event.

"It's a real hoot to see these [wrestling] characters in larger than life size," says Glantz. "Sitting in a stadium environment, with an atmosphere of a crowd around you makes it exciting to watch on a 40-foot screen rather than a 40-inch TV."

Apparently his customers couldn't agree more. According to Glantz, the theater sells out all 265 seats to such mega-wrestling events every month. And while Glantz didn't disclose how much revenues such events brings in to the chain, "Our licensing costs as a percentage of revenues is lower than with a film [screening]," he says.

In fact, the results have been so good, Glantz says he plans to host a digital screening of the upcoming Tyson fight next month.

"We thing of ourselves as an entertainment venue," says Glantz. "We're strong believers that concerts and other forms of entertainment will bring in additional revenues."

A New Hope?

And although such setups are still few and far between, proponents says that such innovative uses will help theaters get a leg up as the technology takes hold and spreads.

"Companies out there investigating how this works now are the ones that will reap the rewards later," says Doug Darrow, a business manager for Texas Instruments, one of the leading providers of digital movie projection technology.

And so far, it looks like all the various sides of the industry are beginning to come together to work things out.

Last month, for instance, a consortium called NewCo was formed among the seven major movie studios, technologists and industry executives to map out digital cinema standards and business plans.

And more companies are hopping on the digital cinema bandwagon, too. Technicolor and Boeing, for example, recently formed digital cinema units to develop the high-speed networks needed to deliver digital movies electronically.

The upshot of such ventures is that more tests of digital systems are bound to get underway quickly. And for theater owners, it also means access to the new technology with very little risks.

Glantz, for example, says that Boeing has helped them install a new digital setup in its Cinema Hollywood theater in just two days. And although he can't disclose what the financial terms of the agreement were, "They've helped us make the economics work," he says.

And he says the installation comes just in time for the May 16 opening of Lucas' Attack of the Clones. "It's just as George Lucas talks about it," says Glantz. "We'll have the ability to show it in the manner in which it was made — digitally. The brightness, the clarity, the lack of dirt and scratches… It's very exciting."

And NATO's Fithian isn't one to argue against that changes will come with digital technology — eventually. "I'm not going to say it's not going to happen," he says. "The numbers [of digital cinemas] will continue to grow as experiments with equipment continue. But you don't go from 50 screens to 50,000 overnight."