Economics is the chief motivating factor for any technology. The economics of cinema is straightforward. When one sees a movie in a cinema, it is the outcome of a business-to-business transaction. Movies are rented to exhibitors by motion picture studios, and exhibitors present the movies to the public for a fee. Exhibitors are responsible for the equipment in their cinemas, and studios are responsible for promoting and distributing their films.
The cost of a film print is approximately £700 (depending on who is asked, prints range in cost from under $1000 to $1500), and in the US today, it is not unusual to require 4000 prints for first release. The studio can experience a significant savings by distributing a less expensive digital file in place of film. That's the plus side.
On the negative side, without a subsidy, the cost of buying digital cinema equipment would be borne solely by the exhibitor. The cost of equipment is significant, with digital cinema systems costing 4-6 times that of a film system. The cost of ownership takes this figure higher yet, due to the high risk of obsolescence of this emerging technology, and expected maintenance costs. Comparatively, exhibitors enjoy little or no risk of obsolescence with film equipment, and can expect their equipment investments to last 15-20 years.
Overall, from an economic view, the studios stand to save money, while the exhibitors absorb the costs and the long term risks.
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