Can This Man Save The Movies? (Again?)

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If moviemakers won't shoot digitally, they'll edit digitally, citing ease and efficiency. But Steven Spielberg and his longtime editor Michael Kahn don't. "Michael and I are the last persons cutting movies on KEMs," he says, referring to the German flatbed machine that is no longer manufactured. "I still love cutting on film. I just love going into an editing room and smelling the photochemistry and seeing my editor with mini-strands of film around his neck. The greatest films ever made were cut on film, and I'm tenaciously hanging on to the process."

Once a film is shot and cut, it has to be copied, sent to theaters and put on the screen--steps that are expensive and risky. Print quality, for example, can vary drastically from frame to frame and print to print. The quality of projection may also vary. "There are still theaters that run the projector lamp at less than proper brightness," says Mann. (A digital projector is much more accurate.) Finally, film degenerates, the way a vinyl record does under a stylus or a videocassette does with frequent use. "With film you have degradation problems," Smith says, "where the stock starts breaking down. Frames get lost when they cut reels together." The digital look will stay fresh for the life of the theatrical run.

If there's an argument for digital that Hollywood can get behind, it's this: it's far cheaper than film--cheaper to shoot, cut and duplicate. But the big savings come in getting the product to the public. Says Lucas: "Making a big movie, a Harry Potter or a Spider-Man, you're spending $20 [million] to $30 million for the prints just to strike them and ship them to the theaters. Smaller movies have to spend a huge part of their budgets on prints." Digital would cut print and shipping costs about 80%. Even Spielberg, who wears many hats, sees the efficacy of digital. "I may be the last person as a director to accept it," he says, "but I won't be the last person to accept it as someone who runs a film company."

So who doesn't love the new movie deal? Well, some studio chiefs, who are worried that a movie on disc is much easier to dupe, and piracy is a huge drain on their income. But mainly theater owners. When they hear the word digital, they reach for their digitalis. Already feeling the hit from the 13% slump in moviegoing over the past three years, they aren't eager to spend the more than $3 billion or so that it would cost to convert approximately 36,000 film projectors to digital.

"Digital cinema is probably a lot further away than most people would think," says Kurt Hall, president and CEO of National CineMedia, the marketing arm of AMC, Cinemark and Regal Entertainment Group. "There's still a lot of work to be done on the technology, both in making it secure [from piracy] for the content owners and in making sure that the systems work and can be operated efficiently by the theater circuits."