Industry Report: Digital
From Analogue to Digital Distribution and Exploitation
by Cartoon, the European Association of Animation Film
- Born in 1949, holder of a DESS in Law and a Degree in History, graduate of the Institute of Political Studies of Paris and former pupil of the ENA, Daniel Goudineau began his professional career in 1977 and worked for different ministries. In 1989 he was appointed Director of audiovisual Programmes at the CNC, becoming its Deputy General-Director in 1996. Deputy Director-General of France 5 in 2000, he became Director-General in 2004. Since July 2006, Daniel Goudineau is the Director-General of France 3 Cinéma. Upon the invitation of the French ministry of Culture and Communication, he wrote a report to analyze the stakes of digital cinema on the entire distribution chain.
What will be the consequences of the change from 35 mm film projection to digital projection?
I think we can speak of a revolution, of a psychological shock and an economic shock. But it is advisable to prepare to undergo this, and therefore take precautions. It is also an open door for large companies who could encompass the whole technical sector, and thus constitute a threat.
What are the key elements at stake?
The motor of the digital revolution is the saving made on prints. Prints will tend towards zero cost. Today, a print costs between 1000 and 1500 €, we can reasonably assume that this cost will move towards 300 €; hence a substantial reduction of cost that can already be calculated. In the United States, this is estimated as representing a saving of some 10 million euros per film.
What are the real dangers of the digital revolution?
The risk lies in the fact that the decisions are no longer necessarily taken by the cinema owners, since a projection could take place from London or Burbank.
How long will this change take?
I consider it will require 10 to 15 years to move completely from 35 mm to digital. For the moment, of the 165.000 projection rooms in the world, less than 2% are digitally equipped. Between the United States (with 36.000 units) and Europe (30.000 units), we now have some 3% of cinemas equipped for digital projection. Thus we can consider that we are at the outset of the digital revolution. The change remains experimental, with significant advances and with various brakes slowing the process.
So we are moving into a period of coexistence?
Indeed: this will be difficult for the distributors and above all the cinema owners to adapt to. One could imagine a case in which the film is digital, and the publicity and trailers that are usually screened in cinema theatres remaining in 35 mm. A real headache!
What are the true advantages of digital?
Firstly, the possibility of programming films that have never been presented, which is a real advantage. For animation films, with digital production and post-production, the quality advantage is undeniable. There is also the possibility of projecting films in 3D; hence a potential market for certain films, like the latest Tim Burton viewable with the well-known polarised glasses. One can also include several different language versions on the same digital support, which offers an opening in extremely important markets such as India or China. Lastly, digital projection guarantees the quality of the film projection and the stability of this quality from the first to the last day of use.
What is the general spirit of your report?
Our concern is to take precautions, and to understand what must be done for the change to proceed well. For this, I think it is necessary to insist on several factors. To begin with universality: in plain, all films must be able to be shown in all cinema theatres, if not there is a risk of arriving at 2 different levels of cinema networks, technically but also qualitatively. Then, economic transparency must be watched over; no one in the distribution chain should gain a monopoly over the cinema process. Territorial control of decision-making on projections must be maintained. Finally, for the digital revolution to take place in good order, solidarity must be established between owners and distributors to support the costs of the change.
What do you recommend?
We have several options that can be put into practice; technical, strategic and economic. From the technical point of view, we must keep a universal standard for digital projection, the 2K. This universal norm includes the number of pixels, the speed of the images, the intensities of contrasts, as well as the film compression. The general idea is to ensure equipment, which is compatible, therefore universal. With regard to development strategy, above all for digital projection, one requires digital films, with digital calibration and copy transfer. In this respect, I think the expense must be supported by the producers and not by the distributors or cinema owners. One can envisage European Commission aid in this sector; if not, only American films and European major productions will be projected digitally.
Another important question is that of security. The delivery of films to the cinema owners is in the form of a file, unreadable without a code delivered separately, on a USB key for instance. On this read-key are contained the software identification codes for the film as well as the contractual information (number of showings, over what period, at what rhythm…) A read-key will also serve for verification, as it stores a history of the film’s projections.
The great challenge is to find a viable economic model for Europe. In short, find an economic equilibrium across all the projection units. For the moment, the only model in existence is the American model, but it seems to me difficult to transpose to our situation. It is all the more difficult as, for the moment, it is impossible to quantify with certainty the cost of the digital revolution.
First estimates speak of +/- 50,000 € for the projector and the data server, to this must be added the installation of the projection locality, plus upkeep and maintenance which are a little more expensive, +/- 200 € per month. And on the receipt side, there is obviously the initial saving on the cost of prints, perhaps also alternative projections such as sporting retransmissions, concerts or other audio-visual productions, and advertising income.
In conclusion, during this intermediary period between 35mm and digital, the states must play a surveillance role, but not a financial role. The investments must come from the actors concerned: the producers, equipment suppliers, distributors and cinema owners. The main risk is to weaken the small distributors and the networks of small cinemas.
Cartoon Master Potsdam, Germany, November 2007