About Digital Media

 

DDAL’s key underlying business driver is the predicted uptake of digital, rather than traditional celluloid, film distribution.  This has now happened in the US, and other countries including the UK are anticipated to follow under a similar business model; indeed there is considerable pressure from the film studios, for which digital distribution provides significant cost savings, to advance digital roll out.

When a film is distributed in the traditional celluloid format, the film studio / distributor has to pay to produce the reel(s), and transport the reel securely to each cinema screen. Further, if a cinema complex has several screens it will be necessary to provide several celluloid copies of each film.  These printing and physical distribution costs are significantly reduced for films that can be digitally distributed. 

Digital Cinema Growth 

Although digital, as compared to traditional celluloid, film distribution has many clear advantages, the risk of diverging standards and technologies as well as the cost of converting and the uncertainty over who should bear these costs, has meant that conversion to digital has taken much longer than expected.

These problems have been overcome in the US, following the creation of the company Digital Cinema Initiatives LLC (“DCI”) in March 2002, which is a joint venture between Disney, Fox, Paramount, Sony Pictures, Universal and Warner Bros. Studios. DCI\'s primary purpose was to establish and document voluntary specifications for an open architecture for digital cinema to ensure a uniform and high level of technical performance, reliability and quality control, which were published in 2005. 

Setting up DCI proved to be the tipping point for the conversion from 35mm celluloid to digital cinema in the US, bringing together standards, strategy and commercial arrangements.  

The table below summarise some of the key advantages to other key constituents of a digital cinema roll out:

Studios

Cinemas

Consumers

Cost Saving: studio cost saving estimated at £615m annually. Celluloid print costs c.£600, Digital copy c.£100.

Wider releases: more screens more easily and cheaper. Higher box office takings. (Delayed / staggered worldwide release results in greater loss to piracy).

Revenue: digital screenings gross more than comparative 35mm

Flexibility: one off bookings / special features.

3D: early experience is that 3D film takes approximately 3x revenue per screen, 2x number of tickets sold. Dreamworks have announced that from 2009, all their titles will be released in 3D. 

Variety: many films can be held on central cinema server.

Flexibility: real time scheduling to match demand - easy to monitor and refine. Operational efficiency.

Versions: Show PG during day and 15 rated version at night, hearing impaired etc.

Advertising: flexibility and ease in changing ads; ability to target precisely and potentially command higher premiums.

Cost savings: overhead savings due to simplicity of operating projectors.

Alternative Content: live sports, opera etc; increased footfall and takings.

3D: see benefits to studios.  3D also maintains the differentiation between the theatre versus home viewing experience.

Quality: digital prints never wear out, and will almost by definition be better quality than celluloid.

Accessibility: to a wider range of content afforded by cheaper set up costs. Micro markets can be served.

Alternative content: sporting events, concerts etc.

3D:  3D films are helping to drive the momentum behind digital cinema uptake. Digital technology enables 3D films to be shown from a single projector with a vastly improved viewing experience.