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DIGITAL CINEMA: Trends in a Digital World

By Carolyn Allen

Interview with
Nick Dager
Editor & Publisher
Digital Cinema Report

Digital technology is small -- as in micro chips and DVDs -- but digital business is huge: "American enterprise spends more than $6 billion each year on business-to-business media production," says Nick Dager, editor and publisher of the trend watching on-line magazine and website,

Market size according to Digital Cinema Report

According to the trade magazine Trade Show Week there are more than 4000 large conventions in North America every year. Imagine the number of high definition productions a large trade show can generate.

There are more than 3000 museums in the United States, another sizable opportunity for quality productions. There are also thousands of zoos and shopping malls and hundreds of airports, every one of them a potential (or existing) venue for digital cinema applications.

There are more than 400,000 large billboards in North America and as the technology for electronic signage evolves these will present opportunities for producers who are skilled in the technology and techniques of widescreen digital cinema.

The digital explosion

The face of storytelling is changing and yet staying the same. The digital world is a paradox of "same but different." Story is still king. But delivery is no longer the court jester. Industries are transforming. Filmmakers are taking production, distribution and exhibition into their own hands with the use of technological tools such as digital cameras, DVD burners and digital projection systems and even consumer large-sceen television sets.

"In every city and college town independent filmmakers are establishing their own theatres and are digitally presenting new feature films, documentaries, and experimental work that would not have found audiences even five years ago," reports Dager.

The market for digital cinema is exploding across the frontier of full-motion communications: home entertainment, theatrical exhibition, film festivals, museums, zoos, in-store shopping, corporate sales conventions, electronic billboard signage, trade show and conventions shows, and let's not forget the Internet. Content ranges from marketing messages to documentary news reels to pure entertainment for adults and/or children.

Dager tracks growth of the digital cinema world through his writing, speaking and participation in industry groups. He served as a charter member of the Digital Cinema Alliance formed by the International Communications Industries Association, and speaks frequently to venues such as the Sundance Film Festival, Consumer Electronics Show, the Cooper-Hewitt Museum, the National Association of Braodcasters and the Audio Engineering Society's conference.

What he's found is that the industry has three distinct activities:

  • Acquisitions process: the people who shoot the movies
  • Post production and distribution: the people who provide the effects and prepare the product for distribution
  • Presentation: the exhibitors who show the movies to the consumer.

Digital Cinema Report Overview

Nick Dager launched "Digital Cinema Report" in 2002 to fill a serious gap in the market for timely information about the business. It is the definitive news source for widescreen production and presentation.

Dager chose the digital format for his publication in keeping with the theme -- digital publishing for immediacy and worldwide distribution. "The internet makes reaching 25 countries feasible. It just made sense. And we haven't begun to tap the potential of the Internet. We are growing more than 30% a month and are up to 12,000 subscribers. We launched in late 2002 and are looking forward to sharing the movies and soundtracks of our readers in our space.

"The growing demand for bigger images and better sound will drive the markets for servers, projectors and other equipment at the heart of any digital cinema, electronic cinema or HD installation." To get the market opportunity report on DC/HD venues, producers and distributors will find the forecasts, market opportunity models and interactive spreadsheets available for $1,000 and up.

Samples of the stories available online include:

  • Da Vinci Systems Announces Second Master Colorist Awards Competition
  • New Products: Christie DW6K, Avid Adrenaline HD, CineForm Aspect HD and more
  • Clinton Presidential Library: Applebaum and Electrosonic Collaborate on Showcase Installation
  • Finding the Right Mix Euphonix System 5 Helps Bring Fantasy to Life in Finding Neverland
  • Haunted Hotel : Interactive Exhibit Uses Technology to Showcase the History of Brooklyn
  • Digital Asset Management: Excerpt from the book on How to Realise the Value of Video and Image Libraries

From film to digital – or not

"Digital post-production is a mature industry, but acquisitions and exhibition have remained largely unchanged for 100 years -- especially on the exhibition side where it is analog (film) based. Theatre owners are reluctant to switch to digital for a variety of reasons. There needs to be economic justification -- film works, film is a beautiful medium and it satisfies the aesthetic needs of both the producers and the viewers."

Dager noted that theatrical exhibitors are somewhat reluctant to adopt digital projection. Exhibitors face enormous infrastructure and related business costs with no guaranteed way to justify those expenses. Since mid-2003 "that dynamic has started to change because the economic feasibility of cameras and projectors have changed -- the last two hurdles of quality and cost. But the big issue is piracy. Those factors have all made tremendous gains -- economics is the last hurdle and the numbers are coming down quickly. Now exhibitors can seriously start to make the case a strong digital business case."

"Aesthetics are subjective…no one on the planet would seriously make the case that film is not a superior visual medium in terms of resolution, color space and even adaptability. Film has resolution limits we have not fully tapped. Film will be here for many, many years and that's a good thing.

"But on the Presentation side -- I'd love to make all those film projectors vanish if I could," Dager says. Why? Unless they are expertly maintained, they destroy film prints with scratches and dirt. It's not rocket science to maintain them, but it does take knowledge and time. Hollywood ignores the problem of scratches and since few movies are in a theatre more than two weeks -- if they stay longer, they just replace the prints. When used prints are shipped overseas, however, consumers are the losers. Digital is becoming increasingly popular in Asia, England and Europe because people are tired of watching terrible, used prints. But there are many reasons the international movie industry is moving to digital.

Converting digital footage to film

Converting digital masters into film isn't a problem if a major studio distributor picks up the film --they just pick up that cost. Cost becomes an issue if the film is not picked up by Hollywood -- and takes the film festival route. With a cost of $5,000 for a single print, that's an enormous burden for a small producer. They are bulky to ship around and then the film gets degraded and they spend another $5,000 on replacement. The indie and film circuit is rapidly converting to digital. The use of DVD and multiple copies makes it possible to submit to several festivals at once and their chances for success just went way up. The good story is what's important now -- that's what the audience cares about. The audience really doesn't care about the technical jargon -- they just want story!"

It's too early to have definitive research about consumer preferences, but anecdotal evidence shows a growing curiosity in digital projection. Dager attended a screening of "Day After Tomorrow" in Singapore in 2004 with a group of international journalists. The Eng Wah cinema has ten theaters with two converted to digital. "The other journalists eagerly asked me what I thought and I pointed out a couple little technical glitches, but reminded them that the important question is what did they think! They said it looked like a movie to them. And my point is that it will still look like a movie after thirty viewings … not a seriously degraded experience that would happen with film."

Dager also met with the executives of the theatre and discovered that a key issue with their digital introduction has been the impact on competitors. The curiosity factor has been very successful and viewers have traveled distances to see the new digital phenomenon. Eng Wah Cinema competitors have lobbied Hollywood not to send the chain any more digital prints because they have an unfair advantage.

Digital Exhibition Trends

Landmark Theatres

Landmark Theatres , the nation's largest art-house chain, features first-run independent and foreign films, restored classics and non-traditional studio fare in 57 theaters representing 204 screens in 14 states and D.C.. Landmark announced in 2004 that they have begun the process of improving its theatres and customer experience in their theatres across the nation. This includes, but isn't limited to, launching non-traditional concessions, implementing a retail arm specializing in DVDs, soundtracks and other merchandise, placing LCD & Digital projectors into many of their theatres and adding print-at-home ticketing options. (

Resolution at the Landmark theatres started at 1k, so many in Hollywood haven't considered it real "digital cinema". Hollywood wants the standard to be 4k. There are clues that point to the blockbuster distributors accepting 2k resolution if there is a growth path to 4K.


Some of the latest happenings are that production and post production are going overseas. "The economics dictate that companies just have to do that."

Wireless projection was shown as a proof of concept at Sundance Film Festival (January 2005) and Dager's take is that "it's very early to even comment on the feasibility. Limitations of distance could be a factor, but that might be changing."

There's tremendous resistence on the part of theatre exhibitors to embrace any of the digital wave. Only a very small minority are willing to explore the transition.

Hollywood distributors have also been resistant, but are moving in the direction of digital distribution. Piracy is the main concern and it is legitimate. Measures have been put in place to greatly enhance the protection of copyrights. "What makes piracy work is a matter of scale -- pirates want blockbuster films with all that marketing behind them -- that's where the money is. Pirates profit from the marketing impact much more than the quality of the film. Therefore, piracy is not a big problem for most indies."

Dager reports that NATO, the National Association of Theatre Owners projects the installed base of digital theaters to grow to 1,000 within two years. "But there are 36,000 theaters, so that's not even 1%", adds Dager. He hesitates to get enthusiastic since we are at the 100-theatre range right now (January 2005). The first exhibitor of a digital film was 1996, with the release of the first Star Wars movie in New York and Hollywood. He projects penetration of 10-20% in five years; closer to 50% by the year 2015.

Producers Insights: Technology or Story?

"One of the biggest mistakes independent producers make is believing that digital is the answer -- it is just one of the answers. There are at least ten names of quality technology available. If a producer is considering shooting with digital, therre's a tool for every budget level.

"The key ingredient is still a good story. Nothing can compensate for, or get in the way of a good story. You can make a great movie with a consumer DV if you have a great story." Dager respects industry leaders' ability to recognize great storytelling. "We all know what it is, but it's hard to put in words. It's something new every time. It's magic." He studied filmmaking at NYU years ago and has written a couple books, but has turned his attention to industry storytelling these days.

Dager emphasized several times that producers' first concern is to acquire a good story. "It all comes back to story. Don't get caught up in the glamour of the process. From a practical standpoint, filmmakers need to come to understand the needs, wants and concerns of DISTRIBUTORS. Think in terms of the audience -- who wants to see your movie and why. If you can convince financial people you have a good story and you can tell it, that's your job," he concludes.

"It is arrogant to think that distributors don't know what people want.. There are talented, aggressive, smart people looking for the next great project. They look for great films seven days a week. It all comes back to story!"

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