The American View

by Michael Karagosian
©2001 MKPE Consulting All rights reserved worldwide
Presented to the EDCF Content Module in Stockholm, December 2001. Also published in the March 2002 issue of In Focus Magazine, a publication of NATO

Electronic Distribution

The catalyst for digital cinema is electronic distribution. Worldwide electronic distribution is the primary goal of content providers. With electronic distribution, the cost barrier for distribution to the big screen should come down. In doing so, electronic distribution should pave the way for new sources of content, as well as new forms of content. And if marketing and language dubbing can take place expeditiously, we can expect less time or no time between regional releases around the world, hopefully reducing the impact on sales from pirated content.

Electronic delivery is already with us in the theatre. Today, some American cinemas are running video advertisements in lieu of the more common non-sync music and slides. This is certainly not unique to America. I believe you already have an established market for video advertising in the cinema here in Europe.

We now have approximately 40 prototype digital cinemas around the world for exhibiting movies. But other forms of electronic content also are being experimented with, which we call "alternative content". Broadway plays have been recorded and shown electronically in theatres. We'll hear today from Madstone Films about their plans for independent movie distribution.

The question we usually hear is "how do we pay for this"? The short answer is that we can't. The high cost of systems today is the single largest barrier to large scale introduction. It is doubtful that we'll see a deep penetration of quality digital cinema until prices come down significantly.

We also need to keep in mind that even when this equipment is affordable, that this transition will not take place overnight. It was a little over 20 years ago when Dolby Laboratories first introduced the matrixed stereo optical sound track. Craig Todd, who is with us today, was responsible for the technical development of that format, which made it possible to distribute low cost 4-channel prints. Today, after 20 years, there are still mono theatres in conversion. Imagine the wait for replacing mechanical projectors with electronic ones, worldwide.

The Road Ahead

Before we charge down the digital cinema road, there are issues we need to consider. In today's cinemas around the world, we have one standard form of content that can be played anywhere. While there have been variations, the essence of this standard has been with us now for 100 years. We are looking at replacing this with a technology that has a lifetime similar to that of our desktop computers. We need to think carefully about this transition, and focus on the extensibility of our new format. By extensibility, I mean that our format can evolve gracefully with changes in technology, and not face catastrophic upheaval every 5 years.

We also need to consider that not all electronically distributed content must have the same look and feel. Hollywood is concerned about the digital replacement of film. Will this digital replacement have the same color space and color depth of film? Will it have a comparable or better resolution? Will it be secure? How easy will it be to distribute a secure, complex production? How will we validate that there are no errors in the delivery?

Both exhibitors and studios are very concerned about interoperability in the digital world. Exhibitors need to contract with a variety of distributors, and vice versa. Each distribution must play on different makes of equipment. Exhibitors also need data security, as they, too, make their money from the primacy of the first release. And as importantly, exhibitors want this new technology to bring a compelling experience to their patrons. If it only looks "as good as film", then we haven't accomplished much from both the audience and the exhibition business perspective.

There are other practical issues that concern exhibitors, including maintenance, technical training, and operator training. New companies will appear in the projection booth not having serviced this business before. Cinemas traditionally make their money on Friday and Saturday nights - not your typical weekday hours. Will these companies be ready for the challenge of providing support when cinemas need it most?

It is understood that not all forms of content may require the pristine look of major movie productions. Advertising executives might not be as passionate about 4K resolution as movie studio executives. Compression algorithms that support a 4:4:4 color coding may not be necessary for the interactive video game that someone wants to distribute. Does this mean we need to compromise quality of presentation? Personally, from an exhibition perspective, I hope not. The technology is there to allow us to include everyone. But perhaps this idealism has to be taken in steps.

Ideal vs Reality

Let's take a closer look at our ideals. Everyone wants standards. Standards protect the assets of content owners, and they protect the investments of exhibitors. But we know technology isn't going to stand still. So the key to good standards is to build upon a firm platform which can incorporate new, unforeseen, methods and technologies.

The work performed by the DVB is a good example of this. DVB provides a firm platform for satellite delivery of television, but has demonstrated that it can adapt to improvements, as well as incorporate more than one technology.

Digital cinema requires even more flexibility. In America, we focus on the use of store-and-forward technology for movies. But we cannot exclude streaming media to the theatres. We must consider that we have these two basic media forms to address.

We must also consider the existing standards upon which we can build. The digital cinema market is not that large. In fact, when compared to the consumer electronics market, it is quite small. If we are to ever enjoy low prices for our digital cinema equipment, digital cinema products must be based on technologies that can be sold to other markets. This does not mean that we need to lower our goals for quality. But it means we need to be creative in our application of core technologies and interfaces.

Above all, let's not forget that the cinema must be a different experience from that of the home. As an entertainment medium, the film industry is unique in its long history of technical innovation, for both visual presentation and sound. Let's keep in mind that it is the innovations in film that has led the home experience, not the other way around. It will not benefit this industry to create a mold that attempts to define the look and sound of our feature productions forever more. And at the same time, we cannot afford to obsolete our equipment every few years.

Yes, we need to build a single platform for digital productions. But we need a platform that gives us the ability to maintain backwards compatibility, while we advance the art of feature presentations.

Small Steps

It's nice to think that if we had the right standards and the right technology today, that everything would just plug together and work together, we wouldn't have to have these long meetings about digital cinema, and wouldn't life be just grand.

But the ideal world does not exist, and as it turns out, digital cinema systems can be very complex.

To appreciate this complexity, let's look at the Digital Cinema Functional Block Diagram produced by DC28. While this drawing is due for a few tweaks, it has largely has survived the test of time -- all of one year. I don't want to get into the details of this diagram, but as you can see, this isn't as simple as baking cookies. And this diagram only addresses the store-and-forward model for digital cinema. It doesn't show streaming media. Given this complexity, perhaps it's smart to compartmentalize our features, to think of our systems in layers, and to grow into this effort in small steps.

To see how we can do this, let's look at the decisions that lie before us for store-and-forward images:

This list is quite large, and it doesn't address interface development. We need to look hard at those decisions that are important for day one operation, and how we can bring flexibility to those most likely to change as our systems mature.


We have a lot of work ahead of us from a standards perspective. How are we to do this?

Our file formats, our encryption format, our method for packaging content, our method for distributing content, our license format, all of these should be developed as firm foundations upon which we can build interoperable systems. To make these foundations firm, we need standards.

It's easy to agree that we need standards. The issue before us, however, is standards by whom. I expect a letter to be released soon, signed by the major exhibition organizations around the world, stating their desire for uniform standards. We cannot afford to have different and contradictory standards from multiple standards bodies.

There are several standards organizations today that have entered or wish to enter the digital cinema standards space. Certainly, organizations such as the EDCF will become exceptionally valuable in organizing regional input for a world-wide standards effort. You are to be applauded for making this effort.

Coordination of standards bodies is the key for developing uniform, world standards. But who will lead? That is one of the larger questions that lies before us today.

Consider again the complexity of digital cinema systems. We will not solve the issues that lie behind these complex systems by having more meetings. We need to enable our manufacturers with our requirements, so they can sort out the details. But we also need to maintain an organized standards effort. Without it, these same manufacturers have no reason to cooperate. We as users can jump up and down and shout for standards, but without cooperation at the manufacturing level, we will not have standards.

Recognizing the need for standards in 1999, SMPTE organized the DC28 Technology Committee for Digital Cinema. DC28, in turn, formed a set of study groups, chartered to identify the best ways to go about digital cinema. DC28 may not have produced a clear set of pointed answers, but it has uncovered the needs of both studios and exhibitors in a digital world. DC28 has also created a valuable dialog between manufacturers and users. One manufacturer very recently told me that they couldn't have confidently developed their particular product for the digital cinema market had they not had the benefit of attending DC28 meetings.

For those areas where we can borrow methods and technology, such as the obvious potential of building upon existing standards for streaming media, there will be few problems in moving ahead. But without an opportunity to prove new methods and new technologies in the field, standards will be meaningless.

DC28 has been criticized for not quickly creating standards. But let's remember that for store-and forward, which is the particular area that DC28 has been focused on, we wish to replace a working 100 year-old technology with a digital version that, with luck, will offer another 100 years of functionality. We will not get there overnight, but we will get there, one step at a time.

Among the first standards I hope to see DC28 address are the mastering and distribution of content. My own work has been focused on the data packaging problem, and it has been a pleasure to work on this effort with EVS of Belgium. A standard data packaging method must be arrived at to achieve practical commerce among multiple distributors and exhibitors.

I also want to note that EVS is not the only European company who has made an impact on DC28 activity. Octalis, also of Belgium, has made significant contribution to the DC28.4 security systems effort.

International coordination is what will make our standards effort strong. SMPTE DC28 understands this, and we are seeking a dialog with groups such as the EDCF so that we can work together in a very meaningful and productive way. The proof is that many of us who are deeply involved in DC28 are here in this room today.


In conclusion, let's recognize the significance of the tasks before us, and the potential impact on the worldwide distribution of entertainment. Film has enjoyed a 100 year history, and has given us a universal format by which we can sell both entertainment content and entertainment equipment worldwide. Let's do our best to develop long-lived universal formats as the cinema enters the digital world.