By the time you read this, Star Wars, Episode II will have become the biggest digital cinema release in history, with roughly one hundred digital screens worldwide. A huge amount of money has been spent by manufacturers, studios and exhibitors to get to this point, preparing the groundwork for a full-scale transition to digital distribution. And though the field is developing rapidly, the promised revolution hasn't materialized as quickly as many had hoped.

A typical digital distribution workflow envisions servers at all key locations, connected directly or with the help of Internet or satellite transmission. Courtesy EVS Digital Cinema.

Today, digital projection promises improved image quality for audiences, but the idea was initially born out of a simple desire to eliminate the high cost of release printing. Digital distribution techniques vary, but all replace film with digital data, sending shows to theatres either over a wire, via satellite or with conventional transportation of DVDs or data tapes. Either way, once in the theatre, the data is loaded onto a server computer and is shown with digital projectors. Since the expense of printing (about $1,500 per print) is the key cost factor, distributors will receive the largest initial reward if the industry makes such a switch. But it has been suggested that owners of digital-capable theatres will also benefit because they'll run on smaller staffs and be able to offer their patrons other forms of large-screen entertainment besides movies. Other potential advantages include the ability to run more advertising and change it easily, and to change distribution strategies quickly -- that is, pull shows immediately when they're not performing or add an additional screen without the cost and time associated with the creation of a new print.

Digital cinema was born in 1999 with 20th Century Fox's release of Stars Wars: Episode I -- The Phantom Menace. Four digital exhibition sites were set up using either the Texas Instruments Digital Light Processor prototype projector or a Hughes-JVC ILA 12K projector. All screenings used a double system for playback: a Pluto Technologies HD hard disk recorder for picture and a Tascam MMR-8 for audio. (The Miramax release Ideal Husband opened on the same day on two digital screens playing from a D-5 HD VTR.) Audiences saw the first discrete digital copies of a 35mm master, one that would never scratch or fade. In exit polls, a large majority said that the experience was better than film. But system and content security required an armed guard in the booth, 24-7.

How it Works

Digital Cinema Mastering: Whether the content originates from 35mm negative, CGI files or video shot with a digital camera, a digital cinema master is created. Today, it's most common for studios to start with the same IP from which 35mm release prints are produced. This is transferred to an HD video format (HDCAM, D-5 or D-6) on an HD telecine such as the Philips Spirit or ITK Millennium. Typically, a projector is used for displaying the picture to the colorist,
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D-Cinema Chips: Texas Instruments' Digital Micromirror Device (DMD), with 1.3 million moving mirrors, and the JVC D-ILA CMOS chip and circuit board, with 3.2 million pixels.

cinematographer and director, replicating the exact color characteristics that audiences will see in the theatre.

Compression: Digital cinema masters are currently produced at an HD resolution of 1,920 pixels wide by 1,080 high, at an uncompressed bit rate of 1.5 gigabytes per second. In order to make distribution and transmission cost-effective, the master must be compressed using one of several algorithms. The major studios are initially using both wavelet and MPEG-2-based systems. MPEG is an open standard, but a proprietary version of wavelet technology is used by QuVis in their data recorder. In addition, Technicolor has partnered with Qualcomm to encode/decode with ABS DCT, an MPEG-like scheme, and the Grass Valley Group has created MPEG+, both offering variable bit-rate compression. But distributors would like a universal compression format: ILM had to master Attack of the Clones in three different formats to ensure that it would run in all the digital theatres where it was booked. On that front, EVS Digital Cinema is working with Grass Valley Group and Avica to develop the Interoperability Initiative, designed to create a system that would allow studios to encode content one way, then play it back on any of the three MPEG-based systems using a constant bit-rate, standard MPEG-2 format.

Playback and Encryption: It would seem that theatres ought to be able to install some kind of digital VCR in the booth to play their digital programs. But HD decks are still much more expensive than hard disk recorders and don't offer the kinds of automation features that digital cinema th eatres are looking for, namely the ability to change and rearrange shows, ads and trailers at the press of a button. In the first digital cinema exhibitions, computer hard disks were physically transported to the cinema and shown with the Pluto data recorder. Then QuVis developed the QuBit server, which could be used to build a show from multiple (and much easier to transport) DVD-Rs. Next to market was Boeing Digital Cinema's store-and-forward system for moving a complete 100-gigabyte compressed movie file from a QuBit server to a cache server, through a satellite link, to another cache server and finally to a QuBit in the theatre. Twentieth Century Fox has also demo nstrated Internet delivery using the Quest network and similar cache servers.

Piracy is a huge problem, even with traditional distribution on film and videotape. But in the digital-distribution era, new and potentially more dangerous piracy issues arise. (A pirated copy of Attack of the Clones was on the Internet before the movie opened.) The first digital cinema masters were unencrypted and protected by armed guards. For Attack of the Clones, LucasFilm specified Texas Instruments' "Local Link" encryption, which employs a decryption circuit board built into each projector.

Some manufacturers are working on encryption with playback authorization on "smart cards." Military grade encryption, known as Triple DES or AES, is being contemplated by some companies but there are no standards. Future releases may be distributed using a system known as "conditional access," meaning that specific theatre screens will be authorized to play specific digital prints.

Projection: The first digital cinema exhibitions used a single server per screen. By 2001, Jurassic Park III used a server that could feed two screens from a common file. Now there are hybrid systems using dedicated servers at each screen networked to a larger cache server for
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Two projectors based on different chip technology: Texas Instruments' micro-mirror, DLP Cinema chip is the basis of the Christie projector on the left, which can be engineered around an existing film lamphouse. Barco and Digital Projection, Inc. have also licensed the TI chip JVC's projectors, like the one on the right, employ their own lamphouses.

the multiplex. Playback systems can interface with existing theatre automation to provide control over lights and curtains, and software allows theatre managers and projectionists to program playlists instead of physically splice film on platters.

The projector is seen as the key element of digital cinema success. Currently, the market-share leader is Texas Instruments. TI's Digital Micromirror Device (DMD) technology (aka DLP or Digital Light Processor) is based on a chip composed of a 1.3 million tiny moving mirrors, each representing a pixel on the screen. A projector system consists of three such chips, one for each primary color. TI consulted with cinematographers in the design of the chip and continues to improve it with higher resolution and improved color range (gamut) and contrast using something called "dark chip" technology, which creates better blacks. The technology is licensed to three projector manufacturers: Christie Digital, Digital Projection, Inc. and Barco. The system was developed as a bolt-on device to retrofit existing 35mm lamphouses, replacing the mechanical part of the projector.

Micromirror technology encountered resistance because the display chip was originally only 1,280 high by 1,024 wide and required the use of anamorphic projector lenses to display widescreen aspect ratios. Critics pointed out that film has at least a 4,000-line resolution and balked at sacrificing image quality for an electronic display.

JVC has come up with a CMOS-chip projector, the QX1. That technology is less expensive to produce than the TI micromirror chip, and offers the higher, QXGA resolution of 2,048 by 1,536 pixels. So far, there are no installations using this technology, but both Sony Electronics and Eastman Kodak announced that they would license it for future products. NEC and Panasonic are also introducing TI-based projectors without dark chip technology but adding proprietary color management and video processing that produce images that are competitive with dark chip systems.

Additional Benefits

Distributors pick up several additional cost advantages with digital distribution. Most shows are produced with multiple 35mm negatives and for airline and TV versions and foreign versions with subtitles. In new projectors, subtitles can be generated live over a clean picture. And a digital-cinema print can theoretically contain alternate audio and picture files -- even the elements required to create an R, PG or G version, on demand.

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Playback systems (clockwise from upper left): The Technicolor Digital Cinema, Avica, EVS and QuVis servers offer the ability to change programs with the touch of a few buttons and are designed to allow for automatic ad and trailer insertion, as well.

Exhibitors have been told they can potentially reduce labor costs associated with the building of platters, and that all the screens in a multiplex could be managed from a central location. But at this point it seems equally likely that highly skilled projectionists, as well as an army of maintenance engineers, might be necessary to achieve widespread digital conversion. A more certain prospect is that exhibitors equipped for digital projection could run non-theatrical content -- satellite feeds of sporting events, concerts, and business meetings -- when they're typically dark. Exhibitors, who generally get only 10 percent of the box office during the first week of a movie's release, might strike a better deal with such alternate content providers. National advertisers, looking for a good way to get into theatres, may be eager to find a niche in these new digital venues as well.

The Cost of Upgrading

The major studios have now distributed over 20 films in limited digital releases. They have used this period to develop and evaluate delivery methods, workflow alternatives and

Most digital releases so far have been finished

compression formats. Most digital releases so far have been finished the traditional way: cut negative, create film opticals, time an IP, convert it to HDTV via telecine, then compress it to the delivery format.

The greatest single obstacle in the way of widespread digital distribution is the price of equipment. Projectors, servers and infrastructure cost upwards of $100,000 per screen and that expense will fall on theatre owners, rather than distributors, who stand to gain the most from the switch to digital. The studios could theoretically buy and own the projectors, but exhibitors have resisted this, lest they lose control of their own theatres. Meanwhile, many exhibitors are having economic difficulties. More and more people watch videotapes and DVDs at home and several chains have filed for bankruptcy protection.

Responding to this situation, three companies have offered delivery services that would allow distributors to move content to the new digital venues using various schemes that make the cost of upgrading more palatable to exhibitors. Last year, Technicolor Digital Cinema offered to build the first thousand digital screens for exhibitors and the studios. Their plan was to take a portion of sales -- 12 cents a ticket -- from the exhibitor's share of an admission. Technicolor already distributes a high percentage of 35mm release prints for the studios and offered them a discount on digital prints as a bonus for ordering standard film prints. No one bit. Exhibitors presumably didn't want to share revenue, and the studios didn't want to prematurely adopt Technicolor/ Qualcomm's still-unproven compression format.

Boeing Digital Cinema offers another delivery-and-financing plan: Boeing Capital loans the funds to exhibitors and Boeing Digital Cinema sets up the theatre and provides an encrypted distribution server for use by the studios. Twenty five such venues were to be set up for the opening of Star Wars: Episode II.

Kodak Digital Cinema recently demonstrated a prototype system based on the JVC QXGA chip. The projector uses Kodak's proprietary color-management system, and the company offers proprietary MPEG2 digital prints, as well as delivery and a theatre-playback system. The first installations were expected by the second quarter of 2002, but the system has not arrived yet. Kodak is leveraging its expertise to convince studios and the creative and technical community that it can do the best job of reproducing the color depth, contrast ratio and black levels associated with film prints. Kodak is hoping that showing its upcoming higher-resolution projection system will delay exhibitor purchases of Texas Instruments' models by suggesting to exhibitors that those systems will soon be obsolete.


Distributors want a single standard, not a repeat of the release print digital sound rollout, when competing proprietary formats forced studios to produce prints in three or more versions. In an attempt to rally around a single format, manufacturers, studios and exhibitors are jointly

Many in Hollywood¹s  production ranks have state

participating in a SMPTE standards committee called DC28, with subcommittees and working groups for every technical facet of digital cinema. Last March, the major studios also announced the formation of another standards group, called NewCo. It's composed of some of the same people as DC28 but has no manufacturer representatives and thus will undoubtedly create standards that are more favorable to studio needs. Ironically, NewCo could actually slow digital distribution by insisting upon a higher-resolution standard than can be affordably produced today. Many in Hollywood's production ranks, such as some directors of photography in the A.S.C., have publicly stated that they oppose an HDTV-based system and have recommended waiting for cost-effective 4K-resolution projectors.

But while NewCo presses for high-resolution standards in the future, Lucasfilm is focusing on the present. Its THX division has announced a Digital Cinema Certification program, which will certify both equipment and theatres in much the same way the company qualified sound systems in the past. So far the program has certified servers from Avica, a projector from Barco, and the distribution and integrated playback systems of Boeing Digital Cinema and Technicolor Digital Cinema. Lucasfilm's push to certify current technology puts it in opposition to NewCo. The Hollywood Reporter quoted one NewCo member as saying, anonymously: "(Lucas) can go ahead and knock himself out, but there is no business model yet, and the current quality is equal or less than high-definition television."

Where Are We Going?

Some form of digital cinema is in our future. But will we see it first in home theatres or in multiplexes? Will excellent home theatres, with TiVo-like video recorders and a high-speed connection to a studio's archive, be more attractive to viewers than a trip to the digital multiplex? Will alternative content really bring people into theatres during off-hours? Will a cost-effective 4K-resolution projection system come to market soon, and would that really convince the studios and exhibitors to make the leap to digital delivery and spend the money needed for the transition?

Assuming that piracy can be controlled, full digital distribution has many advantages. But the path to implementation isn't yet clear. A great deal of money is at stake and major players have made big bets on the benefits that will accrue to the winners. But until the technological and economic issues are resolved, digital distribution will remain little more than an expensive technology experiment. Will we still be watching film prints a few years hence? The cost of the upgrade is too great for the switch to take place overnight. Only one scenario is generally agreed upon: Even if digital distribution really takes off, it will coexist with film for many years to come.

Steven B. Cohen is the owner of Cohen Communications, a provider of digital cinema consulting and services to the Hollywood production and post-production community. (And despite the similarities in their names, he is not related to the publisher of this magazine!)