February 22, 1999

Coming Attractions: Digital Projectors Could Change Film Industry

By JAMES STERNGOLD

LOS ANGELES -- Nearly every facet of the movie industry has been transformed in recent years by new technologies, from computerized dinosaurs and other special effects to the collection and analysis of box office data. But even with all the digital wizardry, motion picture reels are made through a chemical film process and then projected onto screens using technology that has changed in the past century about as much as buttered popcorn.

Now, the industry is on the threshold of what many experts say is a breakthrough that could bring dramatic change to the economics of movie theaters and to the moviegoing experience itself.

Assuming that financial hurdles and industry politics can be overcome, the potential benefits include silver-screen images free of lint and scratches, new types of in-theater special effects, and the ability of theater owners in the heartland to get the same access to first-run hits as urban cinemas.

Within two years, movie theaters are expected to begin installing the first generation of digital projectors. Reels of 35-millimeter film -- which are several feet in diameter and heavy -- would be replaced with electronic projectors that use magnetic tape or digital disks.

On March 10, at a meeting of the National Association of Theater Owners, two new electronic projectors -- one by Texas Instruments that relies on a chip with more than a million tiny mirrors, and a competing technology using what is called a light valve produced by Hughes-JVC -- will demonstrate what they can do. The same four-minute film clip will be shown on each of the new projectors, as well as a traditional 35-millimeter projector.

If several demonstrations here recently are a guide, the exhibitors will observe a quality that is sharp, with colors as rich and as warm as the most pristine film prints and without the usual jittery frames, scratchy soundtracks and blotches of dust that often mar the much-used theater prints.

The theater owners are expected to witness, in short, the birth of "electronic cinema."

"The technology now exists to build the projectors," said Doug Darrow, the manager for market and business development of the electronic projector business of Texas Instruments. "The real issues are economics and emotion. The studios have to say, 'We want to make this change."'

Phil Singleton, the president of American Multi-Cinemas Inc., a chain with 236 theaters, added, "We can't wait for the day when we're unshackled from the 35-millimeter prints. But conversion is first and foremost the biggest problem to face."

Theater owners insist that the costs of installing the new projectors, which are expected to cost roughly $100,000 for each system, compared with about $30,000 or so for a conventional projection booth, will have to be shared.

Studio executives generally agree, but are wary of even discussing the issue openly for fear they could taint what are likely to be long and difficult negotiations.

"Look it, there's going to have to be some studio subsidy of the installation of these projectors," said one senior studio executive, who spoke on the condition that he not be identified. "Until we know exactly how that will work, I'm not willing to say anything."

What no one doubts is the benefits the new systems will create. For one, the studios will no longer have to create and ship thousands of reels of film. Each print costs in the neighborhood of $2,000, and a major film requires as many as 5,000 prints. Those costs would all but vanish under the new systems, in which entire movies could be sent to theaters through a satellite signal.

"As it stands, most of the savings would go to the studios and the costs would go to the theater owners," said William F. Kartozian, the president of the National Association of Theater Owners. "Obviously, this will have to be a cooperative effort. Unless it's good for everybody it's just not going to happen."

Then there is the issue of quality and consistency. In the process of making prints from a master the copies lose some vitality, in the form of a softer focus and less vibrant colors. Films begin to show serious wear after 30 or so screenings, experts say.

Electronic cinema would do away with many of those problems. Movies would still be shot, and edited, on traditional 35-millimeter film, and the end-product would be at least initially on film. Then, using a machine called a telecine, the digitized print would be made, and every subsequent digital copy would be a perfect replica. There would be no wear and tear from each showing.

The image that people see in the theaters will still be cast by a projector upon a screen. But instead of the projector producing the image by shining a bright light through a strip of film, the new, digital projector would be generating the image from data stored as computer code -- the way an audio CD player or the new home-video DVD disk players translate digital data into sounds and images.

"I went into one demonstration where the only way I could tell the difference between the film and the electronic version was that the film one had that jittery movement and the electronic one didn't," said Martin Cohen, the head of post-production at Dreamworks SKG. "They are down to the nitty-gritty. They're finally in the ball park on the quality."

In the beginning, digital movies are likely to be delivered to theaters in the form of electronic tapes or disks. Eventually, however, they are expected to be delivered via satellite, then stored on a server in the theaters.

That prospect excites some theater owners. Currently, theaters in big cities tend to get the first prints available of popular movies and cinemas in smaller towns must wait days or even weeks. The new system could deliver the new films simultaneously.

It also means films could be switched and juggled instantly. If a movie is doing well, a multiplex cinema could add showings to its other screens with the click of a mouse rather than having to wait days for the delivery of new prints.

The language in which movies are shown could be switched instantly, if different sound tracks are provided. A theater near an Hispanic neighborhood, for instance, could schedule showings of the same film in Spanish and in English at different times.

Conventional systems already use digital sound, and generally have up to 8 tracks available for the audio portion of the movie; the new systems could handle 12 audio channels. Those additional channels would permit innovations that could dramatically alter the movie experience. There could be everything from sound from above, behind and below the audiences to programs in which a digital signal engages devices that shake the seats on cue or even emit smells into the theater.

The new projectors could project screens images with the quality of high-definition digital television. They could, for example, do pay-per-view showings of prize fights, concerts or other live events.

But there are also major questions. It is currently estimated that the studios lose perhaps $3 billion a year or more to illegal copying of films. Most of the studios fear that, if movies are sent to theaters through a satellite transmission, cyberthieves might be able to intercept the signal and steal a perfect copy.

This is an issue that Cinecomm Digital Camera, one of the companies trying to break into the business, believes it has solved. Cinecomm is a new company jointly owned by Qualcomm Inc., which produces telecommunications equipment, and Hughes-JVC, a unit of JVC of Japan that manufactures a digital projector. Qualcomm has said it is bringing to the new company a sophisticated technology for encrypting the movie transmission that is all but unbreakable.

"We're not going to eliminate that $2.5 billion a year or so of piracy, but you're going to put a big dent in it," said Gary Garland, the vice president of business development at Qualcomm.

But one of the biggest issues is who will control that transmission to the theaters, and what it will cost.

Cinecomm claims to have solved this question, too. It intends to provide one stop shopping by providing the satellite uplink facilities, the dishes for the theaters, the systems for encrypting and compressing the transmissions, then decrypting them, and the projectors, too.

In addition, to avoid the huge capital costs of removing the old projectors and installing the new ones, Cinecomm said it intended to bear all the initial costs itself. To cover these costs, it will charge the theaters a fee based on the number of showings of each movie.

That all-in-one package makes many of the studios nervous, however. The system would make the studios and the theater owners dependent on a single supplier, and it would place a gatekeeper between the distributors and the movie exhibitors.

"That's the buzz word: gatekeeper," said one studio executive. "We won't permit a gatekeeper."

Ken Williams, the president of the digital studio division of Sony Pictures Entertainment, a major player in this field, said: "Everyone acknowledges that the digitized image will have to be encrypted, but no system has been accepted or endorsed by any of the major studios. No one is going to put their faith in anyone who has a proprietary black box. It has to be an open system."

Cinecomm waves off such concerns. "There's certainly a concern that anytime you have a single supplier you have questions," commented Michael Targoff, the chairman and chief executive of Cinecomm. "We have answers to all those questions. We're not trying to get anyone in a position they don't want to be in."

Copyright 1999 The New York Times Company