The idea of a 'digital revolution' for film can sometimes seem ridiculously overblown. For all the talk of paradigm-shifting technologies and the long tail, the traditional box office has been happily breaking records around the globe.
In the UK and France, the July box office reached new highs for the modern era - albeit with a little help from the weather.
China's summer box-office grosses were up 60% in June and July, pushing the industry towards the $400m (rmb3bn) milestone. And in the US, summer takings topped $4bn, beating even the highs of 2004.
Digital cinema, online downloading and next-generation DVDs do not seem quite the imperatives they did during the miserable box office of 2005. To many, a lot of energy seems to be expended on fixing something that does not appear to be broken.
What's more, the progress of digital technologies seems painfully slow. The rollout of D-cinema is a stop-start affair, particularly in Europe, where it is not yet clear whether studio support for Arts Alliance Media's virtual print-fee model will translate into a full-blown breakthrough in the 'who pays'' debate.
New DVD formats are bogged down in a battle that is holding up consumer adoption, and a report from analyst eMarketer this week questions how much money is being made from the boom in online video.
If technical advances seem slow, there has been a clear psychological shift in the industry. There is a general acceptance that we are heading into a digital future and that success will be increasingly based on how to reach audiences.
The summer has done much to clarify where that digital transformation is heading.
The studios
For the studios, proving the appetite for a summer blockbuster season on this year's scale will focus attention on how to more efficiently and cost-effectively service that demand.
This summer's day-and-date global tentpole strategy has been undertaken at huge cost.
Given the Byzantine nature of shifting prints and marketing product worldwide, it is not difficult to see why cheaper forms of distribution are exercising Hollywood's collective brains.
That is particularly important given the slowdown in the DVD market, which needs to turn sparkling box office into profits.
The need to reduce the costs of international distribution is a major incentive to invest in digital technologies, says Patrick von Sychowski, principal partner at Electronovision Consulting. 'The opportunities for savings in distributing the big global tentpoles is the prime driver for the studios' interest in digital cinema,' he adds.
There is also the opportunity to maximise screenings.
'Some digital cinemas have been showing Pirates Of The Caribbean: At World's End on four screens, one on their biggest screen and the other three running simultaneously,' says von Sychowski. 'That's why we are seeing the discussion move towards the distribution department and away from the technical guys who have had it as their personal fiefdom.'
Digital cinema will be about renewal as well as efficiency, suggests Julian Levin, executive vice-president, digital distribution, at Twentieth Century Fox.
History may see the 3D developments of 2008 and 2009 as the turning points in digital cinema rollout. '3D will be a major catalyst for change and make it more of an event,' Levin says.
The studios have also taken an early punt on online download-to-own and video-on-demand, seeing a means to extend the reach of product.
Indeed, it is the studios who are working in Europe to unlock a workable revenue-sharing model for digital cinema, through initiatives with companies such as Arts Alliance Media.
The indies
A great many independents will see the battle of studio behemoths this summer through the other end of the telescope.
Digital cinema as the means for studios to gain a more efficient stranglehold on the market was the nightmare scenario for many independents. Early exhibitor experiments with non-film events - such as concerts and sport - will further alarm the pessimists.
There has been a painful squeeze on screen space over the last few months. While some counter-programming has cleverly taken advantage of the blockbuster battle, a great deal more has been crowded out.
The French box office, for example, rose an astonishing 57.8% year on year but it will not have escaped anyone's attention that the local share dropped from 44.5% to 39%.
Some envious eyes may even have been cast towards China, where the summer success of US blockbusters was abruptly called to a halt by government decree, as Fantastic Four: Rise Of The Silver Surfer was dumped from the schedules.
Given that nowhere else has the economic muscle - never mind the political will - for such an approach, attention for independents necessarily must shift to new ways of reaching audiences.
Distribution - and more particularly customer demand - ought to be an obsession for the independent sector, says Jonathan Olsberg, founder and chairman of international film consultants Olsberg SPI. 'The emphasis is moving down the value chain away from production all the way to the customer. We are entering a world which is not production led but audience led.'
Business models
The problem is that the business models will need significant rethinking, suggests Olsberg.
'The customers will decide what they want to see and where they want to see it, and the way a film is funded, bought and sold is going to have to fit in.'
What the web allows is the means to create relationships directly with audiences, but indies have been slow to see the potential, says Olsberg. 'You would imagine that independents would have been among the first to embrace downloading, but they have been disappointingly slow.'
Even slower has been the ability to build relationships with potential partners in the distribution of film.
The lack of a convincing payment model has so far left indies incapable of exploiting the need for content among the new generation of service providers, such as telecoms companies.
Innovation in forging relationships with potential partners has been equally slow. Olsberg, for example, believes there are glaring synergies with the advertising industry.
'They want to reach the same audiences and that is an opportunity for film financing.'
Finance remains the critical issue in reform. While the studios have been able to raise a fortune from private-equity funds, the independent sector has shown few signs of following suit. Slate-financing equity deals are occasionally mooted, but there has been little sign yet of a breakthrough.
It is not hard to see why, says Martin Churchill editor of the influential investment journal Tax Efficient Review. 'The underlying economics are not attractive at the moment. There are few investments as opaque as film but it needs to be transparent.'
Efficient and accountable digital distribution may take a while to win over doubters, but it at least makes film a serious consideration.
Policy
The emphasis of government policies around the world are also slowly but clearly making the same shift from production to distribution.
One more often hears dark talk these days of over-production. The number of films made outside the US, and particularly in Europe has risen every year.
Yet there is also little correlation between production and box office - audience numbers fluctuate but the number of films just keeps on rising.
For the emerging giants, such as Russia, China and India, the answer is in cinema building. But that is not an option in most markets. If government policy is based not just on funding production but on ensuring those films are actually seen, digital distribution will be critical.
'Distribution is clearly key if we are to achieve our aims in creating a vibrant and successful film industry and to ensuring people get the chance to enjoy a richer film culture and supporting distribution,' says John Woodward, chief executive of the UK Film Council.
'A wider distribution of a more diverse range of films clearly depends on an audience that wanted to see such films, and an ability to distribute them in a cost-effective way.'
Woodward believes the role of government needs to be seen beyond the theatre, encouraging new voices to reach out to new audiences using new media.
'The backdrop to all of this activity for us and for the industry, is maximising the opportunities for our industry and for consumers as the digital age really begins to effect significant change throughout the value chain.
'Digital technology is starting to transform the way in which film and moving images are financed, produced, distributed and consumed, and many of the historical barriers which have made it difficult for audiences to gain access to a wider range of films are beginning to tumble,' says Woodward.
It is an optimistic viewpoint but there is a clear logic there. What unites almost all those actively engaged in digital change is that the revolution will be defined by customers and that the top-down economics of the analogue industry are on their way out.
Screen International's digital cinema conference takes place on September 25 at the Mayfair Hotel in London.
Among the speakers is Bud Mayo, chief executive of Access IT, which this week announced the 3,000th installation of its D-cinema system in the US.
Howard Kiedaisch, CEO of Arts Alliance Media, will talk about breaking the deadlock on a working payment model for European cinema.
The conference will look at developments in Norway, Ireland, Germany and the UK.
And it will look at future developments, including 3D.
- For details, telephone (44) 20 7841 4805, e-mail screenconferences@ emap.com or visit www.digitalcinema2007.co.uk.
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