After having failed to fulfil its early promise, digital cinema has staged what looks like an honourable comeback. At last count, of the 9,000-odd active screens in India, more than 2,000 were digital.
According to the Motion Picture Association of America, in 2008, there were a total of 8,614 digital screens across the world. Of these, over 5,400 are in the US. Going by this data, the India number looks very good.
About 40 per cent of the prints for any film these days are digital and the area continues to attract investors. The latest being Manmohan Shetty’s Walkwater Media. Many of the early investors are looking to make money in the next couple of years.
The fact that digital screens are spreading across two disparate markets — the US (the world’s largest, most organised) and India (large in volumes, very fragmented) — tells you that when it comes to survival, industries can find their way around the most complicated tangles. It also repeats the lesson of every new media technology — on convenience, speed, costs and timing.
Almost five years ago, the birth of digital cinema in India was one of the most exciting media stories I did as a journalist. Across Maharashtra, Gujarat and parts of the North, theatre owners were installing servers and projectors that made it possible to screen digital prints. These could come via satellite or on a hard disk, but the essential premise was the same — better speed, lower costs and better returns.
The cost of a digital print is less than one third of the usual 35 mm one and it wears better. This means that instead of the usual 400-500 prints that a film released with in those days, it could now release with (theoretically) 11,000 prints for each screen in India. A simultaneous release across the country, instead of a staggered one, killed piracy and earned more revenues. Moreover these towns could get fresh prints instead of scratchy ones; months after the big cities got them.
It started in 2003 when Mukta-Adlabs began seeding theatres in small-town India. Some of these were taken on lease and others just got the equipment, but almost all deals involved a revenue share.
After 130 theatres, the results were encouraging. In the digitised theatres, occupancies (capacity utilisation) doubled. Also the collections showed up in the books. If you have the permission to play a digital print six times, you cannot play it seven times; the software does not allow it. So revenue leakages were getting plugged. Soon other companies joined the fray.
Of the four companies that started then, not one survived. The problem in India, as in the US, was the same — everybody benefitted from the technology but no one company wanted to foot the bill. Two things unravelled the Mukta-Adlabs project, which was seeding the theatres at its own expense — the cost of consumables (like bulbs on projectors) and the fragility of its control over the theatres and their revenues.
Elsewhere in the world (especially the US), debates on standards — a point that the big studios also used to stall digitisation — just wouldn’t stop. In India, every company went its own way, making the market a big mess.
Then in 2005, Valuable Media (now UFO Moviez) got into the business. It is now, arguably, the biggest player in the space with a claimed 1,500 screens in India. Others include Real Image, Pyramid Saimira and Scrabble. Their business models are different — instead of a revenue share, they work on a per-play basis or make money from the digitisation of the print. A UFO, for instance, is also at a scale where advertising should kick in as a serious revenue stream — any advertiser prefers dealing with a chain that has the ad rights to 1,500 screens instead of buying airtime piecemeal.
Also, digital cinema has moved from being something for single screen theatres in small-town India to an imperative for every kind of theatre. About 10 per cent of India’s digital screens are in multiplexes in metro India. And many of the multiplexes that are coming up don’t bother with 35 mm equipment. This means bigger print runs — 1,000-1,600 prints for most movies — are common. This makes it easier to mop up more revenues in the first week.
Clearly, this time digital cinema is here to stay.
The writer is a media consultant vanitakohli@hotmail.com
