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Now Playing In Asia: Digital Cinema


The projection booth at Singapore's Suntec City multiplex sounds like those at theaters worldwide. After the projectionist feeds the film through the projector, the room fills with the clickety-clack of the spinning reels. But beside each of the five traditional projectors sits a newfangled model that takes no effort to load and makes no noise other than the hum of a cooling fan. These are digital projectors for showing movies delivered on removable hard drives. "My guy just needs to push a few buttons" to start a digital film, says Oh Chee Eng, a top executive at Eng Wah Organization Ltd., the theater's owner. "It's so much easier."

While music, television, and even radio have all moved to digital formats, the movie industry still clings to technology dating from the days of Thomas Edison. That's starting to change, though, since Hollywood last year finally settled on a common format for digital movies. Digital-cinema advocates say the technology will lower costs, add piracy protection, and provide new sources of revenue to theater owners by helping them show live events such as concerts and soccer matches. "It's really starting to take off," says Al Barton, vice-president for digital-cinema technologies at Sony Pictures Entertainment (SNE) in Hollywood.

Singapore is leading the way. The ultimate goal is to make the island nation a center for entertainment, with post-production studios helping to create content and Hollywood distributing digital movies from Singapore to the rest of Asia. The government has ponied up about 15% of Eng Wah's up-front costs of installing digital equipment, which can easily reach $100,000 for the projector and computer, or about five times the price of a conventional projector. Today 15% of the city's 158 screens are digital, and the rest could be converted by yearend, says Mike Connors, a former Asia chief for the Motion Picture Association of America and now a consultant to Singapore. "It's very clear the government wants this to happen," he adds.

EMPTY SEATS

Still, it's tough for theater owners to make a business case for buying digital projectors. Cathay Organization Holdings Ltd. opened the first digital cinema in Singapore in 2003, but today it has only three digital projectors. One reason: Cathay can't raise prices to cover the $400,000 it has invested in the equipment. At a time when movie attendance in Singapore is falling -- down 7% last year -- the market can't handle even a small increase in ticket prices from the current $6 or so, says Suhaimi Rafdi, Cathay's president for business operations. "The sums don't add up," he says.

But advocates are hanging in. As things stand, many digital cinema projectors sit idle for months at a time because there aren't enough digital movies. Last year just a dozen of the 150 titles shown in Singapore were digital. Cinema owners are expecting about twice as many digital films this year, now that Hollywood has adopted a standard format. Currently, digital versions of Mission: Impossible III, Poseidon, and The Wild are showing.

Movie houses can also use the technology for more than films. With the projector hooked up to the Net or a satellite link, a whole new world of content becomes available. Cathay showed the finals of the local version of American Idol in its digital cinema in 2004 and will present World Cup soccer matches this summer. Eng Wah plans to add a further eight digital projectors and is looking to computer games as a way to make them pay off. Last year, Eng Wah hosted a competition with videogame maker Electronic Arts Inc. (ERTS) in which fans watched hotshot gamers compete on the silver screen. Another possibility: dozens of gamers facing off in a huge electronic brawl. "I [could] convert my cinema into a game hall," says Oh, the executive from Eng Wah.

By Bruce Einhorn


Reviving Keynes
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