Digital cinema at the doorstep
by Jens Rykær, President of MEDIA Salles

For almost two decades we have been discussing what has been characterized as the most revolutionary event in film since sound – digital projection of films in cinemas. A flood of questions have erupted from these discussions, tests, demonstrations and the general promotion of this new technology that will eventually send the traditional 35mm-projection machine to the dump or to the science museum.

Many of these questions have by now found an answer. Talking about pure picture quality on the big screen even the most critical 35mm fundamentalist has to admit that the combination of the TI-chip and brilliantly manufactured projectors has solved the problems concerning light, contrast and colour saturation. User-friendly panels/computer programs are here as well, even though the phrase “just push a button” is maybe a bit too light-footed.

It also seems as if a global format will find its standard – 2K. The Americans (DCI) run for this standard and international business will have to follow if it wants American product in its cinemas. At least this is what might be read between the lines. The current British try-out instituted by the British Film Council, for example, has consequently settled for 2K. For smaller screens this seems a bit over the top but so far the message is clear: 1.3K is considered too modest by the major players – the Hollywood studios.

Security measures to prevent piracy and other illegal access to the content also seem to be in place. Some claim that the whole of the security (encryption, decryption, keys) is now tighter than that used for transferring military information.

Product-wise, there have been strong opinions that too few films have been distributed in digital format. To justify the investment in expensive equipment would be difficult if the majority of films were still circulated in 35mm. This scenario has also changed dramatically. Already by now most (American) films are released digitally.

So why have we not yet seen an impressive roll out of the digital technology globally? Fewer than 3,000 of the estimated 105,000 cinemas worldwide had installed digital projectors by the end of 2006. There is only one answer to that question – the cost. A full instalment (projector, server, general technical adjustments) still has an economic range far beyond what medium- sized and smaller (independent) exhibitors can afford – in the neighbourhood of some 100,000 euro – per screen! Sales were nevertheless remarkable in 2006 but the market should not expect an essential shift of balance between 35mm and digital until 2013. Manufacturers of equipment have gone a long way to accommodate different wishes from the exhibitors but still the price is considered too high. And who is to pay?

This problem goes hand in hand with the price problem. Everybody agrees that the distributors harvest the most with the technological transition and this fact has given rise to a business plan designed in the US called Virtual Print Fee (VPF) which essentially is a shared investment plan by distributors and exhibitors. This VPF-plan is not necessarily what Europe wants – or is able to cope with, even if it wanted to. Too many small businesses, too many sub-markets, too many mixed business models etc.
Two initiatives in this field have, however, operated for some years in Europe with relative success: XDC and Arts Alliance Media. At least they have introduced concrete proposals at a time when general (and understandable) ignorance and cautiousness prevail.

Financially there is no doubt that without some kind of public support to the vast majority of minor businesses European cinemas face a serious problem. When a massive roll out happens all those who have the muscle (and a friendly bank) are bound to follow if they want to stay in business. Of course prices will be lowered but probably not within the next handful of years. So much money has been spent developing the technology. This money is expected to be returned I suppose. Presumably there are expectations that this money will be recovered.

In conclusion I see political action as the highest of priorities for cinema organisations just now – not in five years. By then the train will have left the platform.