Exhibition

The exhibition of digital films in theaters constitutes the last mile in the digital cinema value chain. Movie theaters with the required technology will not be limited to showing just digitally created films or celluloid films converted over to the digital format, because such projection systems can display almost any digital content, from digital satellite signals to DVDs to digital cable. Thereby, the advent of digital cinema could make movie theaters 'event destinations”.¹³³ This could significantly impact the profitability of movie theaters, which would be able to explore new opportunities of offering different forms of content and utilizing the theater facilities to reap maximum benefits. The advent of digital projectors in movie theaters will also provide numerous benefits to independent producers, who will be able to display their films in theaters that are currently dominated by the large film studios, who can afford the significant costs of film production. Digital projection will also revolutionize theater advertising, which is currently limited because of the existing film format of 35mm reels in which it is cumbersome and expensive to produce films.

However, this can only become a reality when theaters across the globe equip themselves with digital projectors. When Lucas Films produced Attack of the Clones in the digital format, it was done with the hope that there would be at least 500 theaters in the United States using the new digital projection technology that would display the film. However, less than one-tenth of the 35,000 screens in the United States are ready for digital movie displays. Further, out of approximately 75,000 movie screens in the world, only 50 are equipped for digital projection.¹³⁴ The currently exists an industry standstill in the US, regarding when and how movie theaters will convert to digital projectors. This is because a single digital projector and the server used to store the huge digital movie files can easily cost US $ 25,000 and the theaters are of the view that the distributors should shoulder the conversion costs.¹³⁵ Some of the new business models being proposed involve some formula by which distributors and exhibitors share the burden of upgrading theaters to electronic projection. Companies are now starting to offer services to handle the whole process, from installing and maintaining turnkey theater projection systems to satellite delivery of films, in exchange for per-usage fees paid by both parties.¹³⁶

Yet another advantage is that it can help check piracy. Today producers make tiny, un-noticeable squiggles on the film to see which print has been pirated. Every time a film is projected digitally, the system can put in unseen watermarks, which help in identifying the time/date and the venue where the film was projected and enable tracking down the theater it originated from.¹³⁷

The film industry and the viewing public will be able to reap the rewards of digital cinema only once existing business models are revamped and the initial investment in the equipment is carried out. The significance of emerging technologies that are capable of providing cost-effective and high-quality solutions cannot be ignored, and the acceptance of the digital technology will help businesses involved in every aspect of film production, distribution and projection.