Digitisation in film industry can happen at different levels. A film can be produced in a digital format itself or a celluloid production can be converted into a digital format. While digital filming reduces the cost of production, digital distribution means a threat to traditional channels of distribution. In either case, digital exhibition, when in place, will influence the ways and means of financing the film industry in addition to creating a condition for its decentralisation which is currently tightly concentrated in urban centres.
If one looks at the constituents of distribution costs, one will notice that the primary component is the cost of physical prints made by the producer for exhibiting in theatres. Other distribution costs include duplicating costs which are dependent upon the number of physical prints required, transportation costs and related incidentals. The cost of producing a celluloid print is quite high and consequently, producers generally tend to limit the number of prints and circulate the same prints across different theatres in the country.
As a comparison, the cost of producing a digital print is almost a tenth of the cost of a celluloid print, though in such a case, the film has to be shot in a digital format. Since the cost of a digital print is relatively low, producers have the advantage of producing higher number of prints capable of servicing a lot more theatres simultaneously. This additionally results in saving the transportation costs required to circulate the same celluloid prints in smaller towns after screening in larger towns. With digital prints, a higher theatre count release is also possible for the overseas market.
Though reduction in distribution costs is a clear result of the digitisation, there is an important issue to be fathomed. A digital print can be exhibited only in digital theatres, which in numbers are only about 1% of the total number of theatres in India today. The process of converting a regular celluloid theatre into a digital one requires investment in the form of digital projectors and servers capable of reading such digital prints. As most theatres in the country are situated outside the A class towns, the individuals who own/operate them are not capable of making such investments.
Other than the funding and return on investment syndrome, there is also a technology issue wherein digital projectors and servers that are required for a digital theatre could face compatibility issues in adapting to local Indian conditions.
Another aspect of the distribution cost is the transportation cost related to the physical distribution of celluloid prints across the vast number of theatres in the country. Digitisation of films helps in reducing this cost in a manner that the film is distributed to the theatres by way of a satellite, similar to the well-know DTH format. In this manner, the film, in a digital format, is unlinked in an encrypted format to a satellite from where it is down linked to the theatres which have the necessary decoding equipment to receive the film.
Digitisation of films certainly helps in reducing the distribution costs but to fully derive the value of the savings, the related infrastructure, primarily digital theatres, needs to be in place.
The writer is head of entertainment and media practice, PricewaterhouseCoopers