The Road Ahead

Although the process of equipping theaters with digital projectors is currently in its infancy, the transformation is inevitable and will bring about a sea change in the global film industry. Although digital cinema presents numerous opportunities for film industries around the globe, there exist several concerns besides issues of costs, as discussed above. Some of the drawbacks of digital cinema include risks with regards to security and copyrights. With the advent of digital cinema, films will be distributed digitally through satellite as well as terrestrial communications links. As with all forms of digital content that is transmitted of over different communications mediums, there is no surety of the security of the information being transmitted. Further, the ease with which digital content can be reproduced and re-transmitted presents a tremendous risk for a film industry that is seeking to digitize film production, distribution and projection. Encryption and digital rights management technologies will play a significant role in ensuring that the introduction of digital cinema does not lead to wide spread unauthorized access to networks transmitting digital films and piracy of content protected by copyright laws.

Hollywood is aware of the benefits as well as the threats that technology presents, as well as the importance of reacting to the growth of technology to meet its own interests. Hollywood and the technology industry have been at loggerheads for some time, over the restriction of technology that enables unauthorized duplication of films. The MPAA estimates that the film industry loses more than US $ 3 billion to film piracy each year.¹³⁸ Despite recent developments in encryption technology, producers are still uneasy about using digital distribution for their works, particularly with the development of technology such as DeCSS for decoding DVDs.¹³⁹ The film industry will have to combat several issues relating to piracy to ensure that digital cinema proves to be a boon rather than a bane. By distributing digital films, anybody could make an exact copy by hooking into the data stream. Therefore, broadband and satellite transmission of digital films can become feasible only when advanced encryption schemes are devised to tackle the risks of piracy.¹⁴⁰

With regards to Bollywood, although digital cinema is not one of the foremost issues being discussed, the rapid pace of technological innovation in India is ushering in the digital revolution, which will undoubtedly impact the Indian film industry. Ram Madhvani's Let's Talk was India's first digitally-shot full length feature and the film premiered at the 55th Locarno International Film Festival - 2002, in the digital video category, where it is one of the two Indian films in competition apart from Aparna Sen's Mr and Mrs Iyer. However, digital equipment is highly expensive. Until better devices are made available at cheaper prices, the same format of 35mm cinema scope will continue. It is certain that there will be a large growth in cinemas in India over the next ten years. And new cinemas coming up in India might well choose to leapfrog a generation and choose digital projection for most of their screens,¹⁴¹ provided government provides tax benefits and these equipment get the status of infrastructure equipment.¹⁴² Currently Indianmultiplex.com, a dot com based in India offers digital distribution. The service offered by them involves uploading digital files of films onto their server and allowing the distributor access to the files, which can be downloaded and taken to a theater with a digital projector.¹⁴³

The day that digital cinema becomes a reality in Hollywood as well as Bollywood is not too far away. The long-term benefits of switching to digital will eventually drive film industries all over the word to embrace digital technology, which will eventually provide savings that outweigh the high set up costs.

However, several issues need to be tackled to ensure a smooth transition from the current celluloid format to digital. In addition to security and piracy, setting technical standards will also be important and how best to split the cost of the equipment among various players in the value chain is also important. If participating producers align with theater owners in sharing the cost of the new equipment in return for an equity stake this would probably reduce the risk of the venture.¹⁴⁴ The next few years will see the beginnings of a revolution in the way that films are produced, distributed and exhibited. Although the transition will take many years to complete, by 2005, films encoded as digital-data files will increasingly replace film prints as the preferred method for distributing films to theaters.¹⁴⁵ Once appropriate mechanisms are put in place for the industry to secure their assets, digital cinema will pave the way for the provision of a high quality and cost-effective cinema experience to consumers around the globe.