How Digital Cinema Works

For the business side of the movie industry, the most compelling aspect of digital cinema is distribution. In today's system, production companies spend a lot of money producing film prints of their movies. Then, working with distribution companies, they spend even more money shipping the heavy reels of film to theaters all over the world, only to collect them again when the movie finishes its run.

Because the distribution costs are so high, production companies have to be extremely cautious about where they play their movies. Unless they have a sure-fire hit, they take a pretty big risk sending a film to a lot of theaters. If it bombs, they might not make their money back. (See How Movie Distribution Works for details.)

If you take the physical film out of the equation, things get a lot cheaper. Digital movies are basically big computer files, and just like computer files, you can write them to a DVD-ROM, send them through broadband cable or transmit them via satellite. There are virtually no shipping costs, and it doesn't cost the production company much more to show the movie in 100 theaters than in one theater. With this distribution system, production companies could easily open movies in theaters all over the world on the same day.

The digital distribution system also helps out the individual theaters. If a movie sells out, a theater could decide to show it on additional screens on the spur of the moment. They simply connect to the digital signal. Theaters could also show live sporting events and other digital programming.