The Reel Is Gone

Say goodbye to scratch and hiss. Digital technology is set to transform the way we watch movies.

Two men stand by a shimmering lake. One is a journalist intent on exposing a government scandal, the other a source nervously feeding him a scoop. It's a remarkable scene from the Danish political thriller King's Game - not for what happens, but for how it looks. The lake is such a cool, vivid blue, you feel you could reach out and dip your hand in it. The image is so sharp, the colors so clear, you can make out the subtle pinstripes on the journalist suit. By the time it ended its run at the Curzon cinema in London's Soho in October, the film had played every day for more than a month-but not once did it shudder, skip or pop out of focus.

This picture-perfect vision comes courtesy of a brand-new digital cinema system, a combination of high-tech projector and computer server that could one day kick celluloid out of the projection booth for good. The old mechanism ran 3,600 m of delicate 35-mm film through a series of giant reels. Every screening added another layer of blips and blotches to the film. The new system plays the movie from the server at the touch of a button. And because the film is not on film - it's stored as a digital data file instead of being printed on strips of celluloid - the quality never degrades. Shown by a digital projector, every movie, whether it's a grainy, black-and-white indie drama or a blockbuster killer-thriller, looks exactly as the filmmaker intended. Every time.

The digital system at the Curzon is one of 238 being installed in movie theaters across Britain and Northern Ireland over the next two years by the government-backed U.K. Film Council (UKFC). It's the start of the world's first large-scale rollout of digital cinema systems, and leads the way for similar changeover for the rest of Europe, Asia and the U.S. The goal: to bring the movie-going experience into the digital age. Computer technology was the biggest thing to happen to the movies since color, and it has already permeated most of the filmmaking process. Special effects, editing and post-production are often done digitally, while more and more films are being shot on digital equipment. So why are we still watching movies the way we did 100 years ago?

The movie-house revolution was supposed to start in 1999, when George Lucas released Star Wars: Episode I - The Phantom Menace and set up special screening to show how much better the film looked playing on a digital system. But few in the industry followed his lead, fearing that fast-advancing technology would make the equipment obsolete the moment it was taken out of the box. Nor could any-one decide who should pay for it-cinemas, studios or distributors. Six years later, just over 400 of the world's 120,000 projection booths use digital.

That could soon change. The kick-start came in July, when seven major Hollywood studios published a 176-page document that set out the minimum acceptable technical standards for everything from play-back speed and color contrast to audio quality and security encryption. It was a call for the industry to go forth and digitize, safe in the knowledge that any equipment that meets the specs will stay relevant longer than most actor's careers.

As for who ultimately foots the bill, the UKFC has side-stepped the issue for now by pouring $20 million from national lottery receipts into its trial digital systems, which cost around $100,000 each, compared with $30,000 for a conventional system. "The UKFC broke the mold in terms of actually doing something, as opposed to just talking about it"‚ says Richard Nye of Canada-based projector manufacturing firm Christie, which will provide almost 200 of Britain's new projectors.

But paying for ongoing costs, such as transferring films from 35-mm to digital, encoding them and getting them to movie theaters, calls for a more creative solution. Avica, which makes servers, wants to digitize all 500-odd screens in Ireland using private funding. In its bid to convert 500 screens across Europe by 2007, Belgian firm XDC will charge theater owners small monthly fee and make up the difference itself. And at Disney, which recently installed 84 digital projectors in the U.S. to show a 3D version of its big-buzz animation Chicken Little, senior vice president of technology Chris Carey says compromise is key. "Exhibitors, distributors and technology providers can all make some contribution to the cost of the infrastructure and advance the art".

The industry insists that a prettier picture isn't the only reason bytes are better. Right now, Hollywood might spend over $1 billion a year manufacturing and distributing film copies. Digital could slash that: the prints can be made for a fifth of the cost of celluloid ones and, stored on a hard drive which are easier and cheaper to transport then heavy, bulky reels. (Eventually, films could be sent to cinemas by satellite or cable, cutting out transportation costs altogether.) A more diverse range of films could be offered, too because studios could afford to take on riskier projects, while distributors would be able to send smaller, alternative films to wider audiences. And with up to 10 films sitting on one server, movie houses could change their programs to suit demand. If a showing for film sells out, add a copy on a second screen; if a film bombs, replace it with anything starring Julia Roberts.

Projector makers and server manufacturers that have been selling equipment in ones or two for almost a decade look for sales to boom. Belgium's Barco is one of three companies-along with Christie and Japan's NEC - that almost everyone goes to for digital projection. It has an 80% share of the market in Europe and makes half of the world's digital cinema systems. But that accounts for just 3% of the company's total sales; display and visual equipment for everything from rock concerts to air traffic control rooms accounted for the rest of the $806 million total for last year. Looking at a potential worldwide market for digital projection equipment of around $12 billion, Stephan Paridaen, head of Barco's media and entertainment division, expects sales to shoot up to 20% of the firm's total by 2008. Every year I would go in front of my board of directors and say : "Next year is the year of digital cinema", he says. But now it could actually be next year. The stars are aligning.

Yet even when the sizable portion of the world's projection systems are converted they may not be the money spinner everyone hopes, experts warn. "Distribution, storage, content management, delivery of the content in a safe way-all of that is far more costly than you would assume", says Sacha Wunsch-Vincent, an economist for the Organization for Economic Cooperation and Development. Cinemas that are used to spending minimal amounts on upkeep-fixing a belt here, replacing a bulb there-may have to pay more for service and upgrades.

Such issues may slow the revolution, but they won't stop it. Industry bosses say they won't give up on the promise of a brighter, faster, cheaper future. So sooner or later, digital is coming to cinema near you. "You can send a camera to Mars and get a perfect shot, but you can't walk into your local cinema and see a film without scratches on it", says RickMcCallum, producer of the Star Wars films. "This is about the quality of the experience, the adventure of going to the movies. If you care about the audience, you'll insist on digital".

For fans, filmmakers and the industry, the benefits of going digital are as clear as the image on the screen.