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November 26, 2000

The Movies' Digital Future Is in Sight and It Works


Lisa Tomasetti/Lucasfilm Ltd.
George Lucas sets up a digital shot for "Star Wars: Episode II."

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A press conference about converting to digital the AMC Empire 25 in Times Square 2000 includes, from left, Mark Gill, president of Miramax Films/L.A.; Bob Lambert Sr., vice president new technology for Disney; Jim Albaugh, president of Boeing Space and Communications Group; Frank Rash, vice president of AMC Theaters; and Ron Maehl, senior vice president of Boeing Satellite Systems.

GEORGE LUCAS, the creator of "Star Wars" and the closest thing we have to the father of digital cinema, is unsentimental about film the medium, not the art form. Sure, it has served us for, oh, about 100 years. But now he wishes it would go away.

And it will. Recent breakthroughs in technology have made it possible to capture movies using high-definition digital video cameras with fidelity akin to that of 35-millimeter film and to project them digitally in theaters with no loss of image quality.

The first major feature to be shot entirely in video Mr. Lucas's "Star Wars: Episode II" is now in postproduction. And in an unusual cooperative effort, the powers in Hollywood hoping to improve moviegoing for patrons and the bottom line for themselves have mobilized to bring digital projection to local movie houses, perhaps within a year or two.

A shift to digital cameras will allow dramatic reductions in costs and new possibilities in special effects. On the distribution end, digital projection could open avenues for the exhibition of less commercial films, creating more choices for consumers. And it will allow movie lovers to see, for the first time in history, exactly what the director sees in his final cut, without the degradation of image that is inevitable with film prints.

For filmmakers, exhibitors and moviegoers alike, digital cinema promises, over time, the single most significant enhancement of the movie experience since "The Jazz Singer" introduced sound in 1927.

"This is all going to happen because it has to happen," Mr. Lucas said recently, during a break from editing "Episode II." "I love film, but it's a 19th-century invention. The century of film has passed. We are in the digital age now, and trying to hold on to an old-fashioned technology that's cumbersome and expensive you just can't do it."

Many movie studios agree, says Bradley Hunt, chief technology officer of the Motion Picture Association of America. "We look at digital cinema as a huge opportunity to enhance the theatrical film experience," he said. "There are more and more ways for consumers to use their leisure time, and we see this as an opportunity to keep the film experience competitive. The goal of our member companies is for digital cinema to be better than what's up on the screen today."

Mr. Lucas helped set off the rush to digital a year and a half ago, when he converted the film master of "Star Wars: Episode I The Phantom Menace" to digital data, then ran it for a month at four theaters (two in Los Angeles, two in New Jersey) equipped with high-definition video projectors. Pristine, flicker-free images danced on the screens. There was none of the deterioration in color and vibrancy that occurs when films are transferred from negatives to master prints and then to the third-generation copies shown in theaters. Gone was the usual "weave" of film as it passes through a projector, which compromises clarity. And the dirt and scratches that plague the average print after just a few showings were nowhere to be seen.

Instead, every run of the the digital master had the same superb color, crisp detail and high brightness, along with contrast that fell just short of a good 35-millimeter print.(A nearly imperceptible loss of detail in the dark scenes would go unnoticed by most viewers.) "Phantom Menace" marked the first time audiences had paid to see a major feature projected digitally, and the exit surveys showed that patrons were happy with the result. Even the film projectionists were impressed. "From what my members tell me, the technology was excellent," said Dan DiTolla, of the International Alliance of Theatrical Stage Employees, the union representing the projectionists who assisted in the demonstration. "There was no longer a question of how close the technology was to film. There was now a question of how much better it was."

That reaction has since been registered at other test engagements through several theater chains. AMC Entertainment has been the most aggressive of them, with nine digital projectors across the country and in Japan. "Our customers have reported a preference for the digital format and believe the digital image was superior to a film image," said the company's spokesman, Rick King.

Video projection for large auditoriums is not new, of course. But there had been no way to project video onto true cinema-size screens with anything close to the brightness and contrast of film projectors equipped with powerful arc lamps. The cathode-ray tube or liquid-crystal technologies common in video projectors either cannot produce enough light or cannot deliver the pure blacks that give film its depth. But the different systems used for the "Phantom Menace" experiments, developed by Texas Instruments and JVC, integrate the light of a powerful projection lamp into the video image. The result: a film-quality video projector suitable for full-size cinema screens.

Since that first outing, the prototype projector based on Texas Instrument's "Digital Light Processing," or DLP, technology has been further improved for contrast and color and is available both to postproduction facilities working on digital masters and to movie theaters. Meanwhile, JVC's "image light amplifier" is being revamped, company officials say, and will find its way next year into small-venue projectors that they say will provide more than twice the picture detail of the latest DLP devices. Sony and Kodak are also expected to introduce projectors.

In just a short time, various elements of the film industry have pulled together to nurse digital cinema from a controlled experiment into a real business. For the past year, technical volunteers have been meeting under the aegis of the Society of Motion Picture and Television Engineers to formulate industrywide specifications for digital cinema systems, necessary for a full rollout into theaters. Some may be complete early next year, which would help move digital cinema products from drawing boards to assembly lines, says Curt Behlmer, the chairman of the society's Digital Cinema Technology Committee. "We're feeling an unwritten deadline to get going on this," he said. "The equipment manufacturers are waiting for it."

Digital projection has already become de rigueur at major film festivals, and many now feature independent movies shot in "DV," the digital camcorder format. Independents stand to gain ground in the age of digital cinema, as movies become ever cheaper to produce and to show. That prospect excites the actor and producer Ben Affleck, who was on hand earlier this month at a press conference to announce the first digital satellite distribution of a major feature, the romantic drama "Bounce," in which he stars with Gwyneth Paltrow.

"A lot of people are making good movies," Mr. Affleck said, "but one of the struggles is getting them seen. There are essentially only three major distributors." Because of the high cost of making prints, these distributors Disney, Time Warner and Viacom tend to steer clear of films that don't promise a wide audience, Mr. Affleck said. But with digital projection, he added, "A filmmaker can, in fact, directly distribute without having to go through this sort of horizontal monopoly that the movie studios still have."

Mr. Affleck believes digital distribution will allow megaplexes to substitute smaller, independent works for aging blockbusters on slow nights. But digital cinema will also open alternate venues for such films. A new company called Emerging Cinemas is planning a network of digital-cinema theaters at performing-arts centers and science museums around the country. The company's co-founder, the high-definition video pioneer Barry Rebo, said that the company would use the technology to bring "art-house cinema" to places that go without such fare because of the high cost of making and distributing prints.

"Many people outside the major metropolitan areas hear about these films and say, `How come I can't see that in my town?,' " Mr. Rebo said. "We think this is a valuable demographic to reach on a national basis." The first four systems capable of showing films without film should be in place by spring, and Emerging Cinemas hopes to have 120 sites within three years.

MEANWHILE, Technicolor, the largest supplier of movie prints to the industry, has taken a lead role in introducing digital cinema to the public. Working with Texas Instruments and several theater chains, the company has financed the installation of 31 digital projectors in North America, Europe and Asia, including 13 across the United States and two at AMC's Empire 25, near Times Square.

And following Lucasfilm's lead, the movie studios have delivered a stream of content for digital projection. About a million viewers experienced digital versions of Disney's "Toy Story 2," "Dinosaur" and "Tarzan," while 20th Century Fox and Warner Brothers provided "Titan AE" and "The Perfect Storm" in digital format. New digital releases this season include "102 Dalmatians," "The Emperor's New Groove" and, of course, "Bounce," playing at the Empire 25.

In a test involving Disney's Miramax and several technology partners, "Bounce" was bounced off an orbiting satellite earlier this month using a new system designed by Boeing's Space and Communications Group. The digital master originated in Tulsa, Okla., where the large data file was digitally compressed and encrypted to protect against piracy. Then it was beamed to the Empire 25, decrypted and loaded onto computer hard drives until show time, when it would be decompressed. At the press conference that included Mr. Affleck, executives from all the companies involved celebrated by dropping film carriers into a large trash bin.

For the moment, however, low-cost DVD-ROM computer discs remain the primary media for distributing digital films. For its seed project, Technicolor has been manufacturing and delivering those discs to theaters equipped for digital projection, as well as installing and maintaining the projection equipment. "It is a business development expense," the company's chief executive officer, Lanny Raimondo, said of the demo program. Anticipating the erosion of his company's core business, he is repositioning it for a role in a filmless film industry. "This wasn't something we could sit back and watch happen," he said.

For the studios, the savings with digital cinema would be significant. If the 39,000 screens in North America were to convert to digital today, film studios and distributors could begin banking most of the estimated $800 million they now spend each year making, insuring and shipping bulky film prints. Exhibitors could offer customers and advertisers consistent digital picture quality over the course of a run. And moviegoers in small towns who now wait their turn for new releases and then suffer through worn prints shipped in from major markets could get relief.

"In the digital cinema world," said Ed Grebow, the deputy president of Sony Electronics, "every viewer whether in a small theater or large theater, a primary market or secondary market, at the beginning of the run or the end of the run will get the same high quality." And once a broadband satellite or landline network is in place, theater owners could not only download their feature movie presentations but also regularly pipe in streaming video of special events. Live concerts, Broadway shows or business conferences could all be available at local movie houses in high-definition video with multichannel sound.

Theaters could offer new forms of interactive entertainment as well. Equipping patrons with chair-mounted or wireless touchpads would allow them to participate in "distance learning" educational classes by day and video games by night. "People are talking about creating games where audiences in one theater would compete against others anywhere in the world," said Paul Breedlove, manager of Texas Instruments's DLP Cinema program. "It's a bowling-league approach. The theater owners would be trying to attract a crowd, probably young people, who would come out on a night when the theater is usually quiet and participate in ongoing tournaments," he said.

THE move to digital projection will also allow the industry to upgrade the quality of movie sound. Because today's film prints must carry both digital and analog soundtracks, which take up space on the print itself, the industry standard has settled at six audio channels of digital sound. But with digital cinema, said Mr. Behlmer of the engineers' society, "It's a file-size issue. If the industry wants to support 12 channels, we've got the space to do it."

As the conversion to digital projection begins, most movies will still be shot on film and then transferred to discs for distribution and projection. But as more movies are photographed directly in digital video, filmmakers will save substantial amounts of money. And they will find themselves working exclusively in the digital domain in postproduction, making it easier to use digital editing and computer-generated effects. The Coen brothers' new film, "O Brother, Where Art Thou?" for example, was transferred into digital at considerable cost to allow the artful application of tints that give the movie an almost hand-painted look. One scene contains about 30 successive dissolves, an effect easily accommodated with digital technology. Shooting films directly in digital will only encourage further innovation.

Currently, digital postproduction and digital projection have equaled or improved upon the capabilities of film. But the technology for shooting film-quality images directly in video has lagged behind. Independent filmmakers have produced a handful of feature films with the digital video camcorder, but those films have been criticized for inferior image quality. While high-definition digital video cameras come closer to film, they haven't won acceptance from directors and cinematographers.

Still, the first high-definition digital video camera said to be worthy of a Hollywood blockbuster, the one Mr. Lucas used for "Episode II," is now a reality, a result of a six-year collaboration between Lucasfilm and Sony and, more recently, Panavision. What makes it different from other high-definition cameras is that it captures video images at the 24 frames-per-second speed of film, rather than the 30 frames-per-second of conventional video. "In the film world, 24-frame is the de facto standard, and it is much loved and considered integral to the `film' look," said Larry Thorpe, a Sony vice president responsible for the camera's development.

Mr. Lucas spent months testing the new camera and postproduction equipment under all lighting and environmental conditions before deciding it was ready for "Episode II." He calls the image it produces "technically indistinguishable from film." And, he said, the cost of videotape for the movie was about $15,000, as opposed to some $2.5 million he would have spent on film stock and related costs.

He saved time, too. The video format eliminated the processing and printing of film "dailies," which allow filmmakers to have an onscreen look at what they have shot. With video, Mr. Lucas and his crew could see each take on monitors as they worked. Once they were satisfied, they moved on, without having to wait for dailies.

Shooting directly in digital also eliminated the expense of transferring the movie to digital for editing and special effects. And, Mr. Lucas said, it preserved image quality, as does projecting a digital movie electronically.

That's why Mr. Lucas has pushed hard for digital technology in theaters. He believes that "Episode II," scheduled for release in spring of 2002, would make an excellent showcase for the widespread launching of digital cinema. Film prints made directly from his digitally generated negatives should look much better than average, he said, but they won't match the look of digital projection.

"When we take the digital images we see and translate them down to film, it's just down," he said. "It's less of an image less clear, less than what we shot or created. And when you see it really nice and crisp and clean and beautiful, with these vivid colors, and then you see a lesser version of it, it's sad. It's not just a little thing."

But how fast can today's movie houses go digital? One scenario calls for sales of a few hundred digital projection systems to postproduction facilities and some theaters throughout 2001, perhaps building to around 1,000 sales in 2002. By 2003, conversion could begin in earnest, driven by solidified industry standards, improved technology, increased production capabilities and falling prices.

Though digital installations could arrive in major markets within a year or two, industry sources say it could take 10 to 15 years, if not longer, to retrofit most of the world's 100,000 to 125,000 screens. So film and digital distribution will very likely coexist for a while. But the changeover could come quickly in the "large format" sector of the industry, dominated by Imax. While a conventional 35-millimeter print costs around $1,200, the enormous print for a typical Imax feature costs between $30,000 and $40,000. And in contrast to standard film-industry practice, it is the exhibitor, not the studio, that pays the tab.

Super-high-resolution Imax digital projectors are under development, according to Rich Gelfond, co-chief executive and co-chairman of Imax Corporation, and they could begin replacing existing film projectors within two years. Imax will finance their distribution by allowing exhibitors to apply the cost of prints to the projection system, and expects it will take two to three years to convert the bulk of the world's 230 Imax theaters.

But even as Imax prepares for a rapid deployment of digital cinema, the mainstream 35-millimeter industry still faces considerable hurdles. Despite the push by the studios, the potential for generating new business and the positive feedback coming from field demonstrations, many theater owners are reluctant to switch from reliable mechanical projectors to expensive electronic models subject to continual obsolescence.

"It doesn't make sense to do this if it's only as good as film," said John Fithian, president of the National Association of Theater Owners, whose members own 27,000 domestic screens. "If the quality continues to improve and it offers a better picture than film does today, then it makes sense. But if it's just the same, why throw away a proven system that lasts for decades?"

There are others hanging on tight to their beloved, familiar celluloid, saying that video will never capture the full resolution and detail of which film is capable. Some suggest that sophisticated film stocks and retooled projection gear could breathe new life into film at relatively low cost. A company called Maxivision Cinema Technology applies computerized mechanics to an easily retrofitted projector head, and proposes a new 35-millimeter film format with a larger frame and a faster 48-frame-per-second film speed. Though the system is at least 18 months from reaching market, the technology has been praised by such industry heavyweights as the director Martin Scorsese and the critic Roger Ebert.

FANS of digital see the film boosters as diehards who deny the improvements in digital technology and ignore the benefits already apparent in the digital picture. "Those who have worked with film for a long time often talk about the resolution and say digital has to have whatever number of lines or pixels to replicate film," said Bob Lambert, senior vice president for new technology and new media at Disney. "But they don't take into account what happens to film as it goes through the camera, what happens when you create prints, what happens in the projector with film-gate movement. The numbers about pixel count are not nearly as relevant as what happens in the process."

While the possibility that a film-based system could become a digital-killer is remote, other obstacles remain for digital cinema. Foremost is the expense. Digital cinema systems are expected to sell for around $125,000 per screen five times the cost of a typical film projector. Even if they were eager for the technology, theater chains could hardly afford it. Reeling from a so-so year short on blockbusters, overexpansion and debt incurred building megaplexes with stadium seating, several theater chains have declared bankruptcy; the others are short on capital. "If digital is going to be funded by exhibitors, it's not going to happen," said Mr. Fithian, of the theater owners group. "I don't think anyone doubts that the distributors will have to pick it up."

Jack Valenti, president and chief executive officer of the Motion Picture Association of America, recognizes the dire numbers on theater owners' balance sheets, but disagrees. "If the technology is what everybody says it is, it's going to be a boon to watching movies," he said. "You make the movie experience more enticing, and that's beneficial to the theater owners. I think it has to be a joint effort."

In addition to financing the changeover, the industry must also settle critical questions about control of the digital data coursing through these new systems. Today, theater owners sometimes improve overall ticket sales by moving prints around among auditoriums or theaters despite restrictive contracts with the studios that may prohibit such movement. Marginal operators have been known to sneak in an extra run from time to time without reporting the revenues to the studio for profit-sharing, or to dim their projection lamps below industry standards, compromising picture quality in favor of extending bulb life. But digital-cinema movies will be heavily encrypted to prevent electronic piracy, and every single screening will require studios to "unlock" the film with a digital key. Studios could also digitally monitor the equipment, the time and location of each screening or even the box-office receipts for a given show. Some exhibitors worry that they will lose even more autonomy to the film distributors, who already control many aspects of the business.

RESOLVING all these issues will be made harder by antitrust laws that may prohibit distributors and exhibitors from negotiating and implementing industrywide policies without a waiver from the Justice Department. To date, entreaties from the theater-owners group to the motion picture association for a meeting with its Digital Cinema Task Force have gone unanswered.

"I think we should know exactly what the technical standards are before we deal in these other areas," said Mr. Valenti, of the motion picture association. And, he added, "Our attorneys believe we need to pursue this very cautiously. Industrywide compacts where you sit down and say, `This is what seven or eight companies are going to do' that's very dangerous ground."

Some movie executives think the benefits of digital are too great to risk delaying them with industry infighting. One of them, Phil Barlow, executive vice president for Walt Disney Motion Picture Group, said: "It's really necessary now for the studio and exhibitor communities to not posture and to work out all the issues. We will become the beneficiaries if we do what we should do, which is give the public the best quality picture available. We really need this to provide higher quality and to allow the theaters of the future to become multipurpose, and probably interactive, entertainment centers of tomorrow."

Mr. Lucas agrees. "In the beginning, a lot of people were trying to see if they could make a buck out of this, and I think now they're realizing that the real issue is improving the quality of the presentation," he said. "And I have the feeling that the conversion is going to take place relatively swiftly."

Rob Sabin's most recent article for Arts & Leisure was on the digital showings of ``Star Wars: Episode I _ The Phantom Menace.''

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