About five local film distribution companies are in the process of converting about 1,000 movie halls or screens throughout the country say industry sources, and in the next "three to four years close to 4,000 movie halls would be converted for screening through the computer-based projection system" involving an investment of nearly $2 billion.

Digital cinema, or as some call it, e-cinema, is the latest concept in cinema distribution and exhibition. Hughes India -- the local subsidiary of the U.S.-based Hughes Network Systems, that claims to be the world's leading provider of broadband satellite services -- defines digital cinema as the combination of three phases: digital production or post-production, digital delivery and digital projection combined into a system or chain that offers a higher or enhanced movie-viewing experience to audiences.

A film can be projected through a digital video projection system by taking an already produced movie created either digitally or using celluloid and converting it to digital video format. This video, once transmitted to the theater either using physical means or satellite distribution, is stored on a computer hard drive installed at a theater for repeated play-out during various shows.

Although the United States has been the proponent and pioneer behind the push to promote digital cinemas, its roll-out has stalled lately, with Hollywood studios and theater owners engaged in a struggle over who should pay for the expensive computer-based projection systems.

But in India, which is home to the world's most prolific film industry, making about 1,000 films a year, its roll-out has been more successful over the last 18 months.

"A big reason why digital cinema is gaining momentum in the country, is that it has emerged suitable for penetrating smaller cities where theaters get a new movie much later than their counterparts in the larger cities," said Manmohan Shetty, managing director of Adlabs Films, which calls itself a large integrated managed entertainment company.

"Celluloid prints are expensive, and these markets are too small to justify the cost," he added. It costs over $1,500 to make a celluloid print roll of a typical Bollywood film, and the industry cannot roll out more than 200 celluloid prints at a time. "The country has over 12,000 movies halls, so under the celluloid print mode just a couple of hundred movies halls can get to release a new movie at once," Shetty says.

Another equally important reason, says Pranav Roach, president of Hughes Network Systems India, is, "with the increasing corporatization of Bollywood more and more people are willing to support the entire chain."

Hughes Network Systems India has teamed up with Valuegroup, another local film company, to roll out digital screening in 2,000 theatres over the next four years. Hughes Network has set up a satellite-based digital film hub in Gurgoan near Delhi and says that it is one of the world's first implementers of satellite-based digital cinema systems.

According to Shetty, unlike the United States, entrepreneurs in Bollywood have adopted cheaper modes of digitization that involve "low-quality projection equipments" requiring investments between $22,000 and $45,000 each. "Both movie hall owners and movie goers in smaller India cities are willing to compromise on the quality of movies screened for getting to see the latest releases," he says, adding that "this is also why digital roll-out has not been very successful yet in larger Indian cities because film exhibitors can get away with lower quality projections in smaller cities."

Moreover, Shetty says that theaters in larger cities do not need to spend on conversion to digital screening since "theatre owners there can charge five times higher ticket rates anyway and to screen a celluloid-like resolution, investment in digital projection would need to be similar to U.S., which doesn't pay here either."

Nevertheless, "the biggest reason why Bollywood is opting for an aggressive digital roll-out," says Roach, "is that against traditional cinema delivery, digital cinema offers the most effective ability to curb piracy, a menace that has afflicted the industry for years."

This is because digital cinema takes away any physical handling of the film or print. Roach says that Hughes Network Systems first transfers a film to a digital medium, which is then beamed via satellite or cable to all the theaters at once. "We feel that a movie is most likely to be pirated while its celluloid prints are in transit," says Roach.

"This reduces distribution costs drastically too: The cost of sending it to one theater or to 100 theaters is the same," he said. Moreover the movie transmitted is encrypted data, and decryption occurs at the projection system itself and is therefore protected.

Small wonder then that digital roll-out in the country has started attracting global interests too. For instance, besides HNS, French electronics giant Thomson has tied up with VSNL, a local telecom company, to offer end-to-end solutions for digital cinema. It will include distribution of films through satellite as well as digital rights management of films.

And industry sources say that waiting in the queue is yet another global film biggie, Sony Pictures Entertainment.

Copyright 2005 by United Press International