Digital Projection in Theaters Lagging

With digital video here and revolutionizing who can make movies, studios still aren't getting their way when it comes to digitally projecting their movies in theaters.

George Lucas had wanted to show his new set of "Star Wars" films to audiences digitally, but aside from a few test markets, his dream remains unrealized.

Basically, the studios would stand to save hundreds of millions of dollars each year by showing movies digitally (either through digital duplication to tape or disk, or by beaming movies to theaters via satellite). They could thus avoid having to make thousands of film prints, which are costly to print and distribute.

So, the studios want the theaters to set up digital projection equipment. But this, too, is costly, and the theater owners understandably aren't willing to foot the bill for it when the studios will reap most of the benefits.

Recent conversations among the major players (studio heads and theater owner reps) indicate that maybe the studios are starting to come around on this. The sooner they invest, the sooner they'll start saving.