Imax Corporation, anticipating a complete changeover of the world’s estimated 75,000 35mm film projectors, is taking steps to get its share of the multibillion-dollar market opportunity.

Imax announced that Digital Projection International, its subsidiary out of Manchester, Eng., is moving ahead with their design for digital movie projectors.

Imax, the entertainment technology company headquartered in Mississauga, Ont., and best known for its giant-screen movie format, acquired dpi last September for an estimated us$25 million to us$30 million. dpi is a digital image delivery system designer and manufacturer whose work has been incorporated into rock concerts, casinos, trade shows, conferences, museum displays, electronic billboards, and network news sets. Now Imax and dpi are looking to bring digital projectors to your local cinema.

The digital projectors are based on Texas Instruments’ trademark Digital Light Processing Cinema technology, of which only Imax, Christie Systems and Barco are licensees. At the heart of the system are three silicon microchips, which each have 1.2 million mirrors on them that can reflect enormous amounts of light from high-definition sources. The chips will be integrated into dpi’s systems, resulting in projectors that can display high-quality digital images delivered via satellite or dvd. Imax plans an aggressive rollout of the projectors once DLP Cinema technology is fully accessible.

Texas Instruments’ technology was used in well-received digital showings of Star Wars: Episode I The Phantom Menace at two North American locations last summer, followed by similar screenings of Tarzan, Toy Story 2 and Bicentennial Man at a greater number of venues. Canadian moviegoers were able to witness dlp projection technology first-hand at recent presentations of Disney’s Mission to Mars at Famous Players Paramount in Toronto and Silver City Riverport in Richmond, b.c.

In light of these successful test screenings, Imax, which was already researching the possibilities of digital delivery of its giant-screen productions, decided Texas Instruments offered the best system available.

‘The more research we did, the more we became intrigued not only with the impact of the technology on [our large format], but for the potential of Imax to leverage off of our brand and our other attributes to create a leading position in conventional digital cinema,’ explains Imax co-chairman and co-ceo Richard L. Gelfond, on the phone from his New York office.

D-cinema will radically shake up traditional film distribution methods.

There are some estimates that dispensing with bulky 35mm film prints and related shipping costs in favor of satellite and dvd delivery could save the film industry up to us$600 million a year. The consumer will benefit in getting an image devoid of dirt, scratches, and reel change jumps, and one that won’t degrade with repeated viewing.

To make the digital transition smooth, Gelfond feels there will need to be cooperation between movie studios and theatres, and in that he thinks Imax has an edge.

‘As Imax has evolved commercially, all our customers are the commercial exhibitors,’ he says. ‘Those are the same customers for digital cinema, and we thought we could lever off that. On the other hand, you need to have relationships with the studios, because there’s going to have to be some consensus on how all this comes together. And out of our traditional business, we do have relationships with all the studios. So we thought this made us uniquely situated to capitalize on the digital transformation.’

Software revolution

Digital projection anticipates the growing potential of digital movie-making, which is becoming an increasingly attractive alternative with the rapid development of hd camcorders. Producer/director George Lucas, highly encouraged by the digital effects scenes in The Phantom Menace, is planning to shoot Episode 2, the latest installment in the Star Wars series, entirely on digital Sony HDW-F900 hdcams.

Digital production, however, is not moving forward at the same rate as digital projection. Digital projectors are expected to be the exclusive delivery system of movies originated on 35mm motion picture film long before movies shot on hdcams are common.

What Gelfond suggests digital projection will allow for before widespread hd movies is the theatrical screening of live content. ‘I think you’ll see event programming, whether it’s rock concerts, heavyweight fights, or other sports events,’ he says.

Digital projection is almost certain to also create a cinema that is more accessible to independent producers and distributors who have been traditionally shut out of mainstream markets because of print and distribution costs. The indies will suddenly find inexpensive outlets for their product, which can differ substantially from studio product.

‘I think you may see different kinds of content – the whole concept of what is a ‘movie’ may change,’ Gelfond speculates. ‘There’s almost never been a technological revolution in hardware that wasn’t accompanied by some sort of a revolution in software.’

One factor delaying the revolution is secure data storage and the encryption of copyrighted materials. dvds can be easily bootlegged, and satellite transmissions can be intercepted. Gelfond, however, sees the realization in the near future of ‘many promising solutions, including ones that come out of the military security area, which will be satisfactory.’

Exhibitors’ capital concerns must also be addressed before it will become clear when digital projectors will be implemented. ‘The exhibitors are the ones that are ultimately going to own the projection systems, and they are almost uniformly in some financial difficulty at this point,’ Gelfond says. ‘The real question is when will a business model come together that somehow involves allocation of costs that works for the exhibitors and for the studios.’

When pressed, Gelfond predicts the digital changeover will begin at the end of 2001, followed by a ‘big wave’ the following year.