Changing the picture: The transition to ecinmea

 Kobi Povolozky

International Marketing Manager, Optibase  Video Technologies Business Unit-

 For hundreds of thousands of movie fans worldwide, the basic cinematic experience hasn’t changed much in the last decade or so. But behind the scenes, things are speeding up with traditional analog movie production methods giving way to digital production and playback –E-cinema or digital cinema, as its called by industry insiders.

E-Cinema, is the high quality projection or playback of featured content, such as advertisements, feature films, sport events, and movie trailers. E-Cinema refers to playback and projection of content that is produced either when the entire creation process is digital, or when content is converted from 16 or 35mm print to digital format. The use of enhanced high definition equipment and projectors to play back digital content results in better quality than when screening traditional 35mm analog prints.

To understand the full potential of digital cinema, it is worthwhile taking a look at the conventional motion picture value chain. There are several stages involved in getting a movie to our screens:

§         Production. Both in-house (studios) and independent producers are involved in the creative task of “making movies.” The segment is so closely aligned to distribution that in many cases the two are indistinguishable (e.g., Disney).

• Distribution. Distributors are responsible for the marketing and physical distribution of films in theaters. In addition, they sell the films to the various ancillary markets where the majority of value is captured. Historically, distributors have received about 50% of box office receipts. However, in recent years distributors have garnered a larger share, driven in large part by the rise in screen counts and resulting faster payoff of movies. We estimate that the current split averages 55% for the distributors.
  
  

§         Exhibition. Exhibitors show movies to the public, generating box office receipts (which are split with distributors) and concession sales (a high-margin revenue stream that is theirs alone).

e-Cinema and D-cinema – Confusing?

These two terms are often used interchangeably to describe both digital film making and the use of digital content in other applications. In this paper we refer to e-Cinema in its wider meaning as defined above, whereas D-cinema refers specifically to digital film making or digitized (converted) feature films.

The table below describes variations of digital types of screening.

e-Cinema offers many benefits to production houses, cinema operators and viewers, among them presentation quality, ease of distribution and remote monitoring. These advantages over the existing technology not only reduce production and distribution costs, but are also a source of additional revenue and increased service offerings.

e-Cinema not only signals a technology shift, it has the potential to alter the motion picture value chain. This is compounded by the fact that cinematic exhibition is at a critical juncture with several exhibitors emerging from bankruptcy. Despite the existence of alternative forms of entertainment such as HDTV, the case for the technology is simple: to reduce industry costs by eliminating expensive prints and improve quality with more consistent projection.

E-cinema offers several core benefits:

§         Presentation Quality. One of the main appeals of e-Cinema is image clarity and picture sharpness, which make the viewer experience unique and exciting. In addition, as opposed to the reduction in quality, which occurs when making copies of a 35mm film, copy quality is preserved in the digital format even though multiple copies are created.

§         Elimination of print film. The general estimation is that the annual cost of print film in the United States is roughly $700 million. This includes the cost of the film in addition to processing. It is estimated that studios and distributors will save these print costs when converting to digital cinema. 

§         No print degradation. Print film has the benefit of being a universal standard, much in the way that 35mm consumer film is. A disadvantage of the technology is that the quality degrades with use, resulting in scratches and burnout. With digital projection, this problem is eliminated. Furthermore, digital systems feature more precise controls.

§         New revenue streams. Digital projection will give theaters the ability to show live content such as concerts, sporting events, etc. Digital projection can also facilitate targeted and local advertising.

§         Variable distribution costs. Under the current system, distributors are required to order prints prior to having a good estimate of demand. Effectively the cost is fixed. With digital distribution, the cost is variable. Once a feature film copy is available in a digital format, a cinema operator may choose to screen it in more then one theatre at the same time depending on audience demand. With satellite distribution, the delivery mechanism is point to multipoint. (According to Boeing, the break-even number of theaters for one film is 10-15).

§         Remote monitoring. Digital format, which can be stored on video servers, offers the ability to schedule content playback from a remote location via a network, and furthermore, can be edited and monitored from a remote location. 

Piracy – A Potential Showstopper

Despite the fact that most of piracy in the movie business results from illegal copies made from DV video cameras, security in the digital distribution chain is key to the success of Digital Cinema. How to best protect content needs to be addressed at the various stages of the D- cinema production chain.  The source phase, after the mastering process has been completed, results in a file that has to be delivered over a physical medium or over a digital network. This file needs to be protected by outer encryption as well as an inner encryption within the compression algorithm itself.

To enable the screening of digital movies in all theatres, there must first be an agreed-upon method for the delivery format. Just as a digital document has to be in a certain format for your word processor to recognize it and display it correctly on your personal computer, digital movies also have to be stored in an agreed-upon format.

There are four different file formats today which rule the digital projection scene. Clearly, if digital cinema is to become universally adopted, we need common standards for file formats, compression technology, encryption, color-coding, and screen resolution.

§         Qualcomm's Adaptive Block Size Discrete Cosine Transform (ABSDCT) - image compression algorithm. Qualcomm, which is best known for their CDMA cellular telephone technology, is a newcomer to the entertainment industry. Having developed their ABSDCT compression scheme for government use in the early 1990s, they are now engaged in a focused effort to market it to the professional entertainment world. The idea behind ABSDCT is to achieve an efficient compression for “busy” areas in the frame (i.e. areas with high local contrast or sophisticated texture). As opposed to various versions of MPEG and JPEG formats, which apply DCT to fixed sized blocks (typically 8X8 pixels). Qaulcomm’s ABSDCT image compression algorithm partitions the frame into blocks of varying sizes depending on the block activity.

§         WM9 – Microsoft® Windows Media® 9 Series codec, is trying to penetrate the Digital Cinema market by offering a compression scheme which can compress a movie file to one-tenth the size of a movie file compressed by using the MPEG-2 codec – and at the same time maintain the quality of the image and sound. The additional compression enables digital cinema system designers to use off-the-shelf computers and storage systems and enables producers to distribute movies at lower costs. The WM9 solution assumes that the less data there is to store and the lower the bit rate of the stream, the lower the cost of the system.

§         QuVis Quality Priority Encoding (QPE™) wavelet compression algorithm – Wavelet transforms the entire image, converting the sample domain image to frequency domain information. The advantages of Wavelet compression according to QuVis, lies in the fact that encoding is more efficient, because wavelet transform can extract more of the redundancy in an image, not just what is visible in 8X8 pixel subdivisions.

§         MPEG-2 High Definition profile - MPEG is part of the most widely recognized set of standards and is now adopted worldwide in the TV broadcast industry. At first, MPEG-1 was a compression scheme with just enough quality to compete with standard NTSC. But MPEG-2, a smarter and more versatile standard has since been introduced and has become an instant worldwide hit. MPEG-2 covers a lot of different flavors and bit rates. For digital cinema, the high-end variations of this standard guarantee very high quality at the exact same high resolution as the digital projectors now in use. On top of that, consider that MPEG-2 remains open to even higher resolutions than what are in use today.  These factors are a potential guarantee of long term usability. The MPEG flavor used for digital cinema is called High Profile @ High level or MPEG-2 HP @ HL.

§         The native resolution of current movie files is 1920 pixels by 1080. Many picture rates are supported including 24 frames per second, which is the current cinema standard.

Standardization committees are slow to finalize and accept new standards, but once adopted, these standards pave the way for future implementation and ensure interoperability among servers and decoders from various manufacturers.

Open standards that enable all content (including live events and non-theatrical) that are transmitted, received, decoded and displayed on the same system have the highest penetration rate. Technology that uses the IPR (intellectual property rights) in a small market could become expensive. In a broad media context MPEG-2 today is the only real choice and is also commonly used by the movie industry.

The Digital Cinema playback system should be capable of handling different types of stored material as well as on-line delivery of live content. Typical configurations range from the small one screen theatre to a multiplex with up to 20 screens with or without centralized automation. If a cinema chain can be operated in a network this could rationalize scheduling and technical operation and improve profit margins.

Decoding Modules for Digital Cinema

 The decoding module lies at the heart of the digital cinema playback system. The decoding module is responsible for playing back files encoded in High Definition resolutions. The playback, which is remotely controlled or automatically scheduled, is done at high bit-rates, in order to accommodate the high-resolution and high quality required to fill the large cinema screen. This requires a professional high-definition decoder, which can process the digital video, using the highest level of video connectivity – HD-SDI -while at the same time keeping in sync the digital audio.

Optibase’s VideoPlex HD family is designed to enable playback of High Definition MPEG-2 video streams and is ideally suited for high-quality professional digital cinema, and high-resolution presentations.  The VideoPlex HD in its extended configuration allows you to output up to 80Mbit of MPEG2 HD video. This feature places the VideoPlex HD as an ideal solution for Digital Cinema applications, where high bit rates are  a must for full feature film projection.

When using the VideoPlex HD SDI with the AES/EBU audio cable it is possible to pass up to 8 uncompressed audio channels (4 stereo channels) for a 7.1 surround sound system.

Digital Cinema Projection

Digital cinema projection is dominated today by two major technologies. Digital light Projection (DLP) and Digital - Image Light Amplifier (D-ILA™) projection.

Digital Light Processing (DLP™) is a revolutionary new way to project and display information. Based on the Digital Micromirror Device (DMD™) developed by Texas Instruments, DLP creates the final link that enables the display of digital visual information. DLP technology is being provided as subsystems or "engines" to market leaders in the consumer, business, and professional segments of the projection display industry.

The DLP cinema chip is sold exclusively by the three licensees, Barco, Christie Digital Systems, and Digital Projection.

DLP has three key advantages over existing projection technologies. The inherent digital nature of DLP enables noise-free, precise image quality with digital gray scale and color reproduction. Its digital nature also positions DLP to be the final link in the digital video infrastructure. DLP is more efficient than competing transmissive liquid crystal display (LCD) technology because it is based on the reflective DMD and does not require polarized light. Finally, close spacing of the micromirrors causes video images to be projected as seamless pictures with higher perceived resolution.

The D-ILA™ device’s reflective technique, which was developed by JVC, involves laying out the pixel address selection section and the light modulation section liquid crystal in three dimensions.

The key advantage of the D-ILA™ system is that it enables the highest density pixel integration, making it suitable for high-resolution picture reproduction. Also, even at higher resolutions, there is almost no drop in the aperture ratio, so very high light output is possible. Because the D-ILA™ system provides both high light output and high resolution, it meets all the performance requirements of projectors. Moreover, D-ILA™ offers other benefits such as higher contrast.

Today's digital cinema projectors also incorporate resizers. The native resolution of installed projectors is currently 1280 x 1024, but in practice, digital movies are commonly delivered at a resolution of 1920 x 1080, higher than that of the projector. (In the future, even higher resolution images may be delivered.) The projector displays the higher resolution image by resizing the image to match its native resolution.

When implementing a digital cinema system it is worthwhile carrying out a cost analysis on the investment. Currenlty, the costs associated with movie distribution can be divided into two: infrastructure costs (projectors) and distribution costs (print films, shipping, insurance, etc.).

Under the current distribution process, studios are aligned with one of the major film processor companies (Technicolor and Deluxe) to create prints. These two companies purchase print film from Kodak, Fuji, and Agfa. Prints can then be made from the internegative without affecting the original negative. For this service, distributors are charged approximately $0.12 per foot.

A typical feature length film can run as long 10,000 feet of print film, resulting in an average cost of $1,200 per print. (This cost doesn't include shipping, insurance and the projectionist labor to assemble the film on a platter and then move it from theatre to theatre.) Generally, 2,000-3,000 prints are created for U.S. distribution, resulting in an average print cost of approximately $2.4-3.6 million per release.

With digital cinema these considerable print costs can be eliminated, since the movie can be distributed digitally in a number of ways. The most interesting digital distribution approach involves satellite transmission, which has benefits - particularly for emerging markets. The advantage of transmitting files, as opposed to distributing them on fixed media, is that live events could also be presented using the same infrastructure adding potential revenue opportunities.

When using point-to-multipoint transmission, the distribution cost would be relatively low, a ballpark figure per distribution would be $1,000, resulting in a breakeven point of 10-15 theaters per movie (not taking into account the cost of the projectors.)

According to a report by Credit Suisse Equity Research, cinemas that invest in a digital play-out server and digital projector, can potentially cover their investment in about 36 months. This is the cost savings realized when showing approximately 15 film prints per year at the cinema complex.

Digital cinema combines all the positive developments that have occurred in digital video over the past decade or so. There is consensus today about the use of MPEG-2 in digital video production and in broadcasting. The broadcasting industry has already adopted and implemented this standard. The success of MPEG-2 can be measured by the widespread use of this format and by the fact that industry leaders, based on past experience, are aware that the move to digital display offers both cost savings and better quality. Thus the ground is well prepared for the implementation of HD and digital cinema. The  transformation from film to digital media enables the projection of high quality images and at the same time offers  a significant reduction in the cost of producing and distributing film prints. With so much to offer, its only a matter of time before cinemas go digital.

About Optibase

Optibase, Ltd. (NASDAQ: OBAS) provides high-quality, cost-effective products that enable the preparation and delivery of MPEG-based digital media over broadband networks. Optibase has created a breadth of product offerings used in applications, such as: video-on-demand; real-time video streaming; digital video archiving; distance learning; and business television. With headquarters in Israel, Optibase operates through its fully-owned subsidiary in Mountain View, California and offices in Austria, France, Japan and China. Optibase products are marketed in over 40 countries through a combination of direct sales, independent distributors, system integrators and OEM partners. For further information, please visit www.optibase.com