The day when feature production goes all digital has been predicted since I started in this business in the early 80s. Over the last several years we have seen the entire production and post production chain switching to digital right up until the end at theatrical distribution. This has been at a standstill as the theater owners were hesitant to plop down big bucks to switch to digital projectors. Well, that is about to change!

Yesterday five studios announced they are willing to bankroll up to a Billion dollars to help theater owners go digital. These studios, Walt Disney Co, Viacom Inc’s Paramount Pictures, News Corp’s Twentieth Century Fox, General Electric Co’s Universal Pictures and Lions Gate Entertainment Corp., realize the cost savings they will incur by this move. They currently spend a small fortune in making film prints, a cost that they will no longer have to bear. Digital distribution also gives the studios greater control over their product. They can monitor when and where their movies are shown, and probably kill the playback with the flip of a switch to non paying theaters.

In the bigger picture, what does this mean to those of us in post? For one, it is really bad for the larger post houses who depend on their ability to own and operate extremely expensive telecines and film recorders, and charge bigger dollars for that ability. The new paradigm will call for a screening room with a calibrated projector and some color correction system. This will be within the financial reach of many more businesses now. By further distributing the feature post workload, prices will come down for the studios.

The one caveat here has to do with the “creative” finance that studios use on features. The market standard is that the studio gets a “rebate” at the end of feature mastering. Since this doesn’t come back off of the price of post, it doesn’t show as a profit on the actual feature. Recently a very large post conglomerate which shall remain unnamed ran around giving huge (millions) “rebates” to the studios against future mastering. This had the effect of locking out the rest of the players from the feature post market. At some point, that deal will end and the new market at that time will be very different from the current model.

Independents will be big winners as the barrier to distribution will all but vanish. Got a digital copy of your film? Send it on over to the local theater and four-wall the room for a few nights to see how it does. Viral marketing on the internet should help you pack the house. It will be interesting to see how the studios will maintain their control over distribution without the need for expensive release prints.

The digital projector market should heat up also with renewed competition for a big piece of pie. I wonder if the RED folks are still planning to play in that arena?

In final summary, some incredible opportunities are opening up, while others are shutting down. While I would hate to own a film lab right now, for the rest of us the chance to become an increasing part of feature post is on the horizon.