Digital Rocks - Issue 42 - n+1 - Will Tavlin

20/11/23, 20:54 Digital Rocks | Issue 42 | n+1 | Will Tavlin
Essays
WILL TAVLIN
Digital Rocks
How Hollywood killed celluloid
Published in: Issue 42 : Vanishing Act
Publication date: Spring 2022
David Maljkovic, Temporary Projections (version 2). 2012, inkjet print on archival paper with
collage element. 39 × 59". Courtesy of the artist and Sprüth Magers.
https://www.nplusonemag.com/issue-42/essays/digital-rocks/ 2/24
H OLLYWOOD IS TO T HE CINEMA what the United States is to the world. Its

power is outsize. India, China, Nigeria, Russia — among many other countries —
each release more movies annually than the five-member studio syndicate based
in Los Angeles. But no other film sector carries more influence, generates more
money for its investors, plays on as many screens, or dictates with such vainglory
its vision for a world order. Also like the United States: when Hollywood drops a
bomb, the world pays attention.
On December 3, 2020, WarnerMedia CEO Jason Kilar announced that all of

Warner Bros.’s 2021 titles would be sent to theaters and to HBO Max,
WarnerMedia’s streaming service, simultaneously. To theater owners, this was a
declaration of war. For decades, the Hollywood studios had gradually condensed
the theatrical window — the block of time in which theaters had exclusive
exhibition rights — in order to take advantage of the lucrative home video
market. But to unilaterally do away with it for a year of new releases was
unprecedented.
A narrative soon emerged. Journalists, talking heads, and Twitter users all agreed
that the twin phenomena of Covid-19 and advancements in home theater
technologies had made Warner’s decision inevitable. “Theater owners,” the tech
journalist Kara Swisher argued in the New York Times, “[have] not yet grasped the
depth of the digital revolution, which has only accelerated during the pandemic.”
Warner Bros., Swisher wrote, had “finally shattered Hollywood’s way of doing
business, perhaps for all time.”
But Kilar had not ushered in the film industry’s digital revolution. That
revolution had long been underway, and it had little to do with streaming
services. The story began in 2002, when executives from the largest Hollywood
studios met to discuss their latest concern: digital prosumer technologies. Cheap
digital cameras and home computers were everywhere, and the studios were
worried. Their business model — which depended on maintaining a viselike grip
on the distribution of their films — produced dizzying profits for their
shareholders. Digital technologies could threaten all that. This was the year after
Napster brought record companies to their knees. Who knew what chaos might
unfold? The studios formed a little-known joint corporation, Digital Cinema
Initiatives (DCI), to research the matter.
Eventually DCI scrubbed celluloid film almost entirely from the film industry,
ushering in the most significant technological shift since the introduction of
sound. The digital revolution transformed nearly every aspect of filmmaking for
Hollywood and independent filmmakers alike. Netflix’s rise from a fringe DVD
rental service to dominant streamer — in whose steps studios like Warner Bros.
are now desperate to follow — was just one of many outcomes that unfolded in
DCI’s wake: archiving film assets became prohibitively expensive; independent
theaters withered; thousands of projectionists lost their jobs.
This revolution was invisible, and it was designed to be that way. Its success
depended on audiences never noticing at all.
AT FIRST THERE WERE the moguls: Adolph Zukor of Paramount; Carl Laemmle of
Universal; Louis B. Mayer of MGM; William Fox of Fox. These men forged
companies whose power resided in their role as distributors. In an industry
known for technological and cultural upheaval, this has remained consistent: the
distributors’ unique ability to put pictures on America’s tens of thousands of
screens gives them the power to shape how movies get made around the world.
Hollywood as we know it today began taking shape in 1914. America’s appetite for
movies was growing, and in order to fulfill demand, the largest film distributors
began opening and expanding production units of their own. They built out their
burgeoning networks of movie theaters, too. These vertically integrated entities
— such as Paramount, Warner Bros., and Fox — became known as the majors.
Over the next decade and a half, they pioneered new distribution strategies at
home and abroad that consolidated their hold on the film industry.
As early as 1916, the majors, led by Paramount, began renting their films to
independent theaters on an all-or-nothing basis: if an independent exhibitor
wanted to book Mary Pickford’s films, they’d have to also rent Paramount’s entire
film slate. Under the arrangement, known as block booking, the majors forced
theaters to take on films they knew nothing about. Block booking was
predictably regressive for independent theaters, but guaranteed that every film
the majors produced would be profitable. By the late 1920s, Hollywood dominated
overseas, too, supplying anywhere from 60 to 90 percent of all films shown in
foreign countries. The decades that followed were Hollywood’s golden years. Each
studio would eventually release up to seventy films annually, and American
theaters clocked ninety million admissions a week.
But by midcentury, a number of developments imperiled the majors’ profits. One

of these threats was domestic. For years, the Justice Department had litigated the
majors’ distribution model — in which they produced, distributed, and exhibited
films — for violating antitrust law. In 1948, the Supreme Court finally forced the
majors to sign the Paramount Consent Decrees. In doing so, the studios agreed to
sell off their theaters and no longer block book films.
Another threat came from international markets. Like other American

manufacturing industries following World War II, the majors faced an
overcompetitive market for their goods. Countries across Europe and Asia,
aggressively rebuilding their manufacturing base out of the rubble of war,
decided they needed robust film industries of their own. The Italian neorealists,
Ingmar Bergman, and Akira Kurosawa made inroads into America’s newly built
art house theaters with their sophisticated, sexy, and violent films, but more
importantly, they challenged Hollywood’s hegemony in their home markets at a
time when Hollywood was collecting 40 percent of its profits from global box
office receipts.
The digital revolution was invisible, and

it was designed to be that way. Its
success depended on audiences never
noticing at all.
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Meanwhile, the rise of television began to break the industry’s monopoly on

moving image entertainment, as the number of households with television sets
shot up from three million to fifty million over the course of the 1950s. The result
was that the “old assembly-line method of making movies,” as Robert Sklar writes
in his 1975 book Movie-Made America, “gradually came to an end.”
Deindustrialization soon followed: film output and ticket sales dropped, while
un- and underemployment in Hollywood spiked; Paramount, Warner Bros., and
United Artists sold themselves to an auto parts conglomerate, parking lot
conglomerate, and insurance conglomerate, respectively; MGM and Fox auctioned
off their props and wardrobes. Hollywood’s empty sound stages presaged the
factories in Rust Belt cities that would empty out thirty years later.
In the decades following World War II, the majors tried to win back audiences by
throwing innovations at the screen, seeing what stuck, and repeating whatever
made money over and over again. They developed new widescreen technologies
such as CinemaScope, VistaVision, and Panavision, and gimmicks like
stereoscopic 3D. The more successful ideas were low tech. After 1969’s Easy Rider
netted an unexpected 16,000 percent profit at the box office, executives clamored
to distribute a new generation of young filmmakers, dubbed the New Hollywood,
who generated more hits with The Last Picture Show and The Godfather.
But any successes that Hollywood found in these years were temporary. No
single style or star could reverse the long-term trends of declining film
production and ticket sales. Executives wouldn’t find a real solution to the
overcompetitive market until 1975, when Steven Spielberg’s Jaws delivered
Hollywood’s analogue to the multinational manufacturing companies that
globalized production in the face of declining output growth and overcapacity:
the blockbuster.
The novelty of Jaws was its saturation release model. Before Jaws, distributors
released films on a platform basis, opening in large cities first and gradually
expanding to smaller markets depending on demand. Instead, executives at
Universal, Jaws’s studio, booked the film on hundreds of screens at the same
time, and spent an unprecedented $2.5 million on marketing — almost double the
average marketing budget of the time, with $700,000 dedicated to a television ad
blitz that ensured that every American knew the film existed. The strategy paid
off: Jaws smashed every box office record. Suddenly, for the handful of studios
who commandeered massive marketing and distribution apparatuses,

diminished output no longer mattered. The majors would steamroll the
competition by force.
Saturation release was also innovative because of the way it leveraged profit-
sharing agreements between distributors and exhibitors. Since the introduction
of sound, distributors had been renting their films to independent theaters for a
sliding percentage of box office ticket sales, meaning that the longer a film played
in theaters, the higher the percentage of ticket sales the exhibitor kept.
Blockbusters, thanks to their onslaught of advertising, made the majority of their
money in the first two weeks before rapidly tailing off, ensuring distributors a
higher percentage of the box office gross.
The largest theater chains welcomed the saturation release model. In the 1980s,
companies like American Multi-Cinema (AMC) and General Cinema Corporation
(GCC) began supersizing their growing network of multiscreen theaters by taking
advantage of economies of scale. For most of the 20th century, movie theaters
had screened films by using a changeover projector system in which a
projectionist alternated film reels between two side-by-side projectors. This
process required considerable attention. Projectionists could never operate more
than one screen at a time — a losing proposition for the exhibition magnates who
wanted to build theaters with dozens of screens and reduce labor costs. So
multiplex chains turned to new automated platter systems. Platter projectors
didn’t have changeovers because projectionists stitched the film’s reels together
onto a single horizontal platter prior to the screening. They could then thread the
film from one projector to the next in an adjacent theater, a process known as
“interlocking.” With platters, a single film could potentially play on all the
multiplex’s screens — and a single projectionist could operate all of them.
Blockbusters comported well with the multiplex model. Movies like Raiders of
the Lost Ark, Beverly Hills Cop, and Ghostbusters offered reactionary tales about
the virtues of American firepower, lying cops, and deregulation bathed in the
warm glow of family entertainment. Presented as an escape from politics,
blockbusters delighted audiences and broke box office records. The projectionists
who screened them found their hours scaled back and their jobs more difficult.
At the largest multiplexes, projectionists were sometimes forced to monitor more
than twenty screens at once. Projection quality suffered. Misaligned projectors,
out-of-focus images, and deafening or muted sound levels became the multiplex
norm. Interlocked film prints were rigged between walls, sometimes into lobbies
and over popcorn machines, and were exposed to more harm. A single misaligned
roller could engrave an emulsion scratch across an entire print. A misthreaded
film could bunch up in the platter and melt.
Meanwhile, theaters were losing control over their programming. As studios

produced fewer films each year — and designed more of them to be blockbusters
— they disincentivized smaller exhibitors from booking films from independent
distributors. No mom-and-pop single-screen theater risked turning down a Star
Wars, Jurassic Park, or Titanic, which every other theater in the country was
screening — even though these blockbusters usually came with ruthless terms: a
minimum number of play dates between eight and twelve weeks, nonrefundable
guarantees to rent the films, and, as compensation for the crowds of moviegoers
buying high-margin sodas and snacks, up to 90 percent of the box office gross
reserved for the distributor. For multiplex conglomerates, blockbusters were the
only kind of movie that could be interlocked and projected onto more than one
screen at the same time. As the industry journalists Dade Hayes and Jonathan
Bing wrote in their 2004 book Open Wide, the blockbuster era restructured film
distribution such that exhibitors became “little more than the keepers of
infrastructure and capacity, controlling little beyond seating, ticket prices, and
concessions.”
BY THE TURN OF THE MILLENNIUM, blockbuster directors like George Lucas and
James Cameron had become reliable boosters of digital film technologies in the
press and at industry conventions. To them, celluloid film was a clunky and
expensive technology. Its supporters were analog nostalgists who stifled progress
and who, like the aesthetes who’d shunned talkies decades earlier, refused to
acknowledge the new reality that lay before the industry. The digital revolution
had arrived, and it was a matter of simple economics: digital storage was limitless
and therefore cheaper and faster to process, project, and store than its unwieldy
analog equivalent, celluloid.
The threats to the majors were severe. LA Weekly called digital filmmaking a
“democratizing medium,” a point that must have made studio executives nervous.
The problem was elaborated by Lucas in a 2006 interview with Time. He
proselytized that digital’s affordability would overthrow the Hollywood power
structure under which filmmakers were beholden to corporate behemoths to
distribute their films. With digital, claimed Lucas, anyone could make a film and
“go directly to the theater and say, ‘Hey I got a movie. Will you book this for three
weeks?’ And the theater doesn’t have any costs involved.” One trade publication
confirmed the dilemma to studio executives more bluntly: “If digital projectors
were in wide use with an independent middleman providing easy transmission
to theaters, film producers would in theory be able to release films theatrically
without studios.”
The film historian David Bordwell covers much of what followed in Pandora’s
Digital Box, a 2012 collection of his comprehensive blog posts about the majors’
attempt to steer digital exhibition to their liking. After the majors — then 20th
Century Fox, Paramount, Warner Bros., Universal, Sony, and Disney/Buena Vista
— formed DCI in 2002 in order to take control of a global digital exhibition
system, DCI spent the next three years designing the technology that would
replace film reels, creating standards for digital projection, developing an
antipiracy system, and generating a funding plan for theaters to buy digital
projectors. All the while they made sure that as distributors they would maintain
their leverage over exhibitors. While the DCI took input from the National
Association of Theatre Owners (a group known, amazingly, as NATO), they were
careful not to cede any ground for their final plan, released in 2005, which gave
studios unprecedented control over the exhibition process.
In the new system, projectionists screened a film with a Digital Cinema Package
(DCP). The DCP was a collection of files on an industrial-grade hard drive.
Projectionists downloaded the DCP onto a proprietary server and entered a
passcode — sent separately by the studio — that decrypted the files for the
duration of the theater’s rental period. The system made piracy impossible. But it
also made studios more involved in the projection process. Unlike 35mm film,
which could be viewed directly by projecting light through a film print, the DCP
required patented technology to interpret its files. On its own the DCP was a
useless brick. The significance was what it portended. For studios, the DCP
guaranteed that they’d have full control over the circulation of their films in
perpetuity, while permanently yoking theaters to their technological whims.
Theaters might not have realized it then, but this was the first step toward a new
exhibition paradigm that would no longer include them.
For the majors, the benefits of digital cinema were manifold. DCPs were some 90
percent cheaper to distribute than multi-reel film canisters, and even
multinational studios are beholden to postal costs. At a time when Hollywood
had become wholly dependent on global box office receipts, digital distribution
simplified the process of releasing films across continents and digital platforms
in one fell swoop.
The largest exhibitors realized they had something to gain, too. In part they were
tricked by digital boosters like Cameron, whose baroque hearts-and-minds
propaganda vehicle Avatar had recently become the highest-grossing film of all
time. With serious faces these boosters claimed that new digital 3D systems
would attract audiences in droves. (More accurately, Avatar’s digital 3D
technology would perform like 1952’s stereoscopic 3D, fading as quickly as it
appeared.) Audience numbers aside, theater chains identified another benefit of
digital projection: they no longer needed to pay unionized projectionists. Anyone
who knew how to operate a computer could theoretically screen a DCP. Some
theaters opted to get rid of their projection booths altogether, installing theater
management systems in closets and using the old space for building out
concession areas.
Not all exhibitors, however, were satisfied with the digital technology being air-
dropped on top of them. The cost of converting a single screen to digital was
between $50,000 and $100,000. The big three theater chains (AMC, Regal, and
Cinemark) were able to secure financing to convert their screens because of their
enormous capital reserves, access to Wall Street money, and economies of scale.
For independent theaters, especially rural ones, the outlook was bleak. “All of the
movie theaters in the Adirondacks were going to close,” Sally Wagshaw, owner of
the State Theater in Tupper Lake, New York, told me. “No one was going to be able
to take on a hundred-thousand-dollar loan and stay in business.” Wagshaw, along
with several independent theater owners in the Adirondacks, launched a group

fundraising effort. They succeeded. But the projectors they purchased are far
more expensive to maintain. Thirty-five millimeter film projectors need only
$1,000 to $2,000 per year in maintenance, use easily sourceable mechanical parts,
and can last several decades with proper upkeep. Digital projectors require as
much as $10,000 per year for maintenance, use proprietary digital parts that can
take up to a week to install (during which they’re inoperable), and are estimated
to last only ten years.
But the studios had left independent theaters like Wagshaw’s no other choice. In
2011, 20th Century Fox notified theaters that by the end of 2013 none of its titles
would be circulated on 35mm film. Other studios soon followed suit. Their
decision to stop striking 35mm release prints sent shock waves through the film
manufacturing industry. Overnight, annual orders for some forty billion feet of
print stock evaporated. Film costs spiked. That same year, as a critical mass of
theaters in the United States and Europe began projecting films digitally, the
three major manufacturers of 35mm film cameras — Arri, Panavision, and Aaton
— announced that they’d produce only digital ones. Meanwhile, Kodak, one of the
last producers of film stock in the world, and the largest, burned through its cash
reserves at a frightening clip. They declared bankruptcy in 2012, and although
they emerged a year later with their film production units still intact, the damage
was done.
Celluloid filmmaking wasn’t dead, despite the outpouring of eulogies from film
critics, nor was it by any means unaffordable. But it was increasingly passed over
by studio executives who questioned the efficacy of the medium they themselves
had willfully dismantled, and whose CGI-heavy superhero blockbusters — movies,
after all, about the supremacy of computers — jibed better with a fully digital
workflow. By late 2013, digital had overtaken 35mm as the dominant shooting
format for top-grossing films.
O N THE BRIGHT SIDE, digital cinema would make filmmaking cheaper and more
accessible for directors. Or so the argument went.
George Lucas, the most vocal advocate of digital filmmaking for its affordability,
had an inkling of this in 1969. That year, the directors Albert and David Maysles
and Charlotte Zwerin made Gimme Shelter, a documentary that followed the
Rolling Stones for the final weeks of their 1969 US tour, which culminated at the
Altamont Free Concert. The Maysles brothers and Zwerin hired several camera
operators to shoot at Altamont, one of whom happened to be a 25-year-old Lucas.
That night, two concertgoers were killed in hit-and-run accidents and one person
drowned in an irrigation canal while tripping on LSD. Meredith Hunter, an 18-
year-old Black man from Berkeley, was stabbed to death by the Hells Angels after
brandishing a gun in full view of the stage. The murder was captured by one of
the camera operators, but not by Lucas. Rumor has it that his camera jammed
after he’d shot only 100 feet of film. As Albert Maysles later recalled to a journalist,
“None of the stuff he shot turned out at all.”
A recent graduate of the University of Southern California, Lucas was well

known in those days for his disdain for Hollywood studios. He considered himself
an antiestablishment director who hated not only Hollywood’s monopolistic
distribution system but their trade unions, too. Now he would add celluloid film
to the list. Over the next three decades, Lucas would position himself as a
singular driver of the digital era.
After the success of Star Wars, Lucas invested massive sums of money into
upgrading his digital effects house, developed one of the first digital editing
systems, and cofounded the digital animation studio Pixar. In the 1990s, he
pushed Sony and Panavision to build out digital cameras and lenses and lobbied
Texas Instruments and theater chains to project digitally, even when there was
virtually no demand for such technologies.
Lucas liked how digital technologies made filmmaking a highly controllable affair
— unlike the chaotic scenes he’d watched unfold at Altamont. Digital cameras,
lacking film canisters that needed to be reloaded every eleven minutes, enabled
Lucas to shoot for as long as he wanted. No more jammed cameras. For Attack of
the Clones, the first Hollywood feature film shot entirely with a digital cinema
camera, producer Rick McCallum bragged that Lucas shot a hoggish equivalent
of twenty thousand feet of film per day, compared with an average feature’s three
hundred to five hundred feet per day, and saved millions of dollars in the process.
Digital gave Lucas total command of the frame, allowing him to wholly rework
his vast quantities of footage in the editing room. In postproduction for The
Phantom Menace, performers were copied from some shots and pasted into
others; actors who blinked on a cut were made to keep their eyes open; cast
members who turned their head to Lucas’s disliking were turned the other way.
Lucas’s editor claimed that there wasn’t a single shot in the film that he and the
director hadn’t manipulated. “We could totally redirect the picture in the cutting
room,” he explained. As Lucas once complained of the analog medium, “You can’t
manipulate it enough.” Going back to celluloid, for Lucas, was out of the question:
“It would be like going back and scratching things on rocks.”
Digital cinema would make filmmaking

cheaper and more accessible for
directors. Or so the argument went.
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Despite the millions Lucas saved by forgoing film stock for digital storage, there
was nothing cheap about Attack of the Clones. Estimates today put the film’s
production budget at $115 million — and this is likely a lowball figure. Lucas’s bet
that digital technologies could bring down the cost of filmmaking was only ever
true for productions fully committed to guerrilla filmmaking and shot with
prosumer cameras, such as 1999’s The Blair Witch Project, whose initial budget
was only $60,000. Lucas, like most filmmakers shooting digitally today, opted for
expensive digital cameras that were designed to re-create celluloid’s rich color
science and wide dynamic range. As many filmmakers have found, these energy
and data-intensive cameras aren’t guaranteed to save directors money so much as
shift costs to other places in production.
According to Darius Marder, the director of 2019’s Sound of Metal, the high up-
front cost of film stock fosters an ethic of economy on set that digital
productions — which incentivize directors to shoot vast quantities of footage
they might not need — lack. “When you shoot on film, you have to know the law,”
Marder said in an interview. “You have to know what you’re going for and you
have to be willing to swing for it and not think you can just shoot forever.” More
footage captured on set means more data to be processed, edited out, and
archived in perpetuity. As Marder added, shooting longer entails another
expense: “Overtime. There’s nothing more expensive on a film set than overtime.”
As David Diliberto, the postproduction supervisor for several Coen brothers films,
explained in an interview, the same technologies that enabled Lucas to direct his
films from the editing room have also given rise to the attitude of “we can fix that
in post.” He recounted working with digital filmmakers who wanted visual effects
added to shots that were never budgeted to have them and that could have easily
been addressed on set. In one case, a cinematographer wanted an extra’s shirt
changed from bright red to a slightly duller red. In others, directors wanted
sections of backgrounds replaced or wide shots cropped into close-ups. “Today it
seems like visual effects build and build and build,” said Diliberto. The slightest
visual effects can cost thousands of dollars. The problem is, Diliberto emphasized,
“postproduction budgets don’t have a lot of money.” The lion’s share is usually
reserved for shooting.
Perhaps all this contributed to why in 2019, while in preproduction for their film
Dark Waters, the director Todd Haynes and cinematographer Ed Lachman
insisted on shooting with celluloid. Lachman believed the film’s plot, which
follows a lawyer unearthing a criminal conspiracy waged by DuPont Chemical,
resonated with celluloid’s chemical processes. As he told American
Cinematographer, “The depth of film grain, which is affected by the chemical
process of developing, and the crossover contamination of contrasting colors in
the negative’s silver halides, bring attributes to an image that I find extremely
difficult to create in digital capture.” But executives of the film’s studio,
Participant Media, resisted, worried about the price of celluloid and the
possibility that it would slow down production time. Lachman, in response,
completed a series of screen tests with 35mm, Super 16mm, and digital 2K,
proving that the film could be shot with celluloid in the same amount of time for
the same amount of money as digital. The executives would not budge. In the
end the film, an exposé of corporate malfeasance, was compromised by corporate
stubbornness. Lachman and Haynes shot Dark Waters digitally.
Hollywood executives prefer the high costs of a film that is reshaped in post, that
has 5,000 percent more footage, for a simple reason: digital filmmaking offers
more opportunities for studio executives to control the picture after it’s been
shot.
Lucas, a studio executive himself, knew this well. For the 2011 Blu-ray remaster of
1977’s Star Wars, later renamed A New Hope, the mogul went back and changed
several scenes. For one notable sequence, in which Luke Skywalker is ambushed
by a race of beings who live in the sand, Lucas added digital rocks to a shot of R2-
D2. The effect accentuates the idea that the robot is hiding from the bad guys. Yet,
as one blogger complained of the edit, it created a continuity error because those
rocks were no longer there in the next scene. Lucas’s compulsion to go back and
change his films made them worse. But digital filmmaking’s capacity to capture
massive quantities of raw data on set that could be wholly reworked in post was
irresistible.
The digital image, as it was in the hands of Lucas, can be “preserved forever” as a
profit-generating engine and manipulated endlessly, tweaked to the mercurial
tastes of all future fans. And for Lucas it will be there years down the line,
whenever he wants to add more rocks.
I N 2007, as digital was gaining ground in shooting and exhibition, the Science and
Technology Council at the Academy of Motion Picture Arts and Sciences released
a report that sounded the alarm on another problem that digital advocates had
overlooked or ignored: ballooning archiving costs.
Over the course of the 20th century, as it became known that thousands of
cinema’s earliest films had been lost or destroyed, studios and collecting
institutions began to prioritize film preservation. The Hollywood majors
developed a storage strategy known as “save everything.” Like a building under
construction, a movie produces a lot of scaffolding, and under “save everything,”
studios archived not only masters but original camera negatives, answer prints
used for timing, duplicate negatives used for fades and other opticals, screen
tests, publicity stills, and deleted scenes. A single two-hour movie shot on 35mm,
which fills six cans of film, could produce as many as 178 cans of film, which
studios dutifully stored in temperature- and humidity-controlled vaults and
working libraries. The system worked because film — the prints of which are
made today with polyester — is what’s known as a “store and ignore” technology: if
placed in a properly controlled environment, it can survive for a hundred years,
perhaps many more.
In their report, titled The Digital Dilemma, Academy researchers warned that
digitally stored assets would not last for anywhere near a hundred years. Many of
these assets, the report noted, have “longevities of thirty years or less, and are
vulnerable to heat, humidity, static electricity and electromagnetic fields. The
digital contents can be degraded by accumulating unnoticed statistically
occurring ‘natural’ errors, by corruption induced by processing or communication
errors, or by malicious viruses or human action.” Magnetic hard drives,
meanwhile, “are designed to be ‘powered on and spinning,’ and cannot just be
stored on a shelf for long periods of time.”
And there’s the issue, forever plaguing all digital technologies, of obsolescence:
both file formats and the hardware through which they’re accessed are designed
to be updated or replaced by their manufacturers, meaning “digital ‘permanence’”
requires an “ongoing and systemic preservation process” that includes regularly
scheduled data migrations, in which data is periodically transported from old
digital storage onto new storage.
All of this quickly adds up in costs. The report’s authors wrote that long-term
archiving of digital cinema was spectacularly more expensive than its analog
equivalent. A digital master in 4K, Hollywood’s standard resolution for high-
quality digital assets, cost 1,100 percent more to store than a 35mm film master.
The difference for storing all of a film’s source material was even greater. An
average two-hour movie shot and archived on film cost only $486 per year to
store. Its 4K equivalent? A staggering $208,569 per year. The declining cost of
digital storage doesn’t apply here. As technology advances and video codecs
increase in quality, so too do the quantities of storage, and data migrations of
assets and their backups get larger and more expensive.
In their conclusion, the Academy called into question the long-term viability of
the emerging digital archiving system and charged that studio executives had
been quick to accept digital technologies with no forethought or regard for the
“most fundamental needs of motion picture production and preservation.” More
grim was their assessment that “today, no media, hardware, or software exists
that can reasonably assure long-term accessibility to digital assets.” As of 2022,
this is still true.
All the issues that studios face in archiving digital materials — systems failure,
hardware and software obsolescence, and data migration — are compounded for
independent filmmakers, who can’t amortize costs over one hundred years.
Hollywood partially answered The Digital Dilemma by continuing to strike YCM
separation masters for all their films, even the digital ones. In this process, a film
lab separates a picture’s yellow, cyan, and magenta elements onto three separate
35mm film strips. This is widely acknowledged by archivists to be the most stable
archival format; all three color records fade synchronously over time, meaning
future restorations can capture a film’s original qualities more accurately.
Independents, unfortunately, can’t afford this. It costs around $100,000 dollars per
film — roughly the entire cost of many low-budget features today.
For independents working on small budgets, archiving has always been a lesser
concern than getting films distributed and seen. But prior to digital filmmaking,
directors could archive their films by throwing their negatives into a refrigerator.
As the Academy concluded in a sequel report published in 2012, independent
filmmakers were resolutely failing to meet the financial demands of digital
archiving. Surveying 150 independent film professionals, the Academy found that
81 percent of interviewees stored some of their content on hard drives, but only
20 percent had temperature and humidity controls. Thirty percent had no
climate control whatsoever, and 15 percent didn’t even know what they did.
“It may be that we are accepting short-term advantages with long-term loss,” one
filmmaker told Academy researchers. “I am very concerned that the next
generation will not have the rich archive of historical and classical films that we
have today.”
I N 2010, JOHN GAJDA , a projectionist based in Tennessee, was looking for a new
job. Gajda had been a projectionist since 1990, when he got his first job at Rice
Lake Cinemas in Wheaton, Illinois, amid a multiplex building boom. For the next
twenty years, he worked in the country’s largest multiplexes screening
Hollywood’s biggest films. But when AMC, Regal, and Cinemark started ditching
their film projectors for digital ones, everything changed. Projectionists across
the country were getting laid off. “I saw the writing on the wall,” Gajda recalled.
“All the union jobs were demolished. All the work they had at multiplexes was
minimum wage.”
Gajda got a job as a field service technician with Ballantyne Strong, a company
that had manufactured 35mm film projectors for a century. In the wake of digital
filmmaking, Ballantyne was reinventing itself. The company stopped building
film projectors and began servicing digital ones. Ballantyne understood that film
and digital projection couldn’t coexist. JPMorgan and Blackstone, the investment
groups that had provided the capital for the big three theater chains to convert
their screens, were making sure of it.
The financing obtained by the theaters that then represented more than 50
percent of the US and Canada’s box office receipts — AMC, Regal, and Cinemark —
was complex. The companies set up a limited liability corporation called Kasima
(short for “Kicking and Screaming into the Modern Age”) that purchased digital
projectors with loans from JPMorgan and Blackstone. Kasima repaid the loans by
leasing the projectors back to AMC, Regal, and Cinemark and charging a virtual
print fee (VPF): a payment of around $800 from the majors to Kasima every time
AMC, Regal, and Cinemark screened a studio’s DCP. Everyone benefited in this
arrangement: the majors avoided paying theaters directly, which could have
permanently depressed the price of their rental fees; the theaters acquired digital
projectors at a manageable price while keeping much of the overhead and risk off
their own books; and JPMorgan and Blackstone securitized their loans, worth
over $400 million, and sold them off to investors.
There was a catch. As far as JPMorgan and Blackstone were concerned, as long as
35mm film projection was alive, any rogue independent with a film reel could
threaten their investment. In their financing agreements, the investment groups
stipulated that all the big three’s 35mm film projectors had to be removed or
made inoperable. Regal hired Ballantyne Strong to take care of their film
projectors. Gajda spent the first year of his job as a service technician removing
and shipping film projectors from Regal’s 650 locations to a parking lot in Omaha,
near Ballantyne’s headquarters. “We had a 35mm graveyard,” said Gajda.
“Dumpsters and dumpsters of projectors, some of them brand new.” Some
projectors were parted out. Most were hauled to the scrapper.
For the thousands of independent theaters with repertory programs, getting rid
of their film projectors made no sense. But the majors merely shrugged. Bill Hill, a
projectionist since 1975, described to me the lengths to which studios went to
restrict their archives with exhibitors who didn’t play ball. In 2011, while working
at the Savannah Film Festival, Hill was supposed to screen a 35mm print of
Stanley Kubrick’s Barry Lyndon. “Warner Bros. refused to give it to us,” said Hill.
“They said, ‘We have a Blu-ray of it.’ But the Blu-ray was in the wrong aspect
ratio!” This meant that sections of film’s original frame had been lopped off. Hill
eventually tracked down a DVD in the correct ratio. He screened Barry Lyndon to
a sold-out audience in the 1,237-seat Lucas Theatre in a format that was designed
for a thirty-inch screen. The film’s celebrated photography, much of which was
shot by candlelight with lenses designed for NASA, was reduced to pixels. “The
cinematic experience was completely lost for those people,” Hill recalled. “It was
just gone.” Stories like Hill’s are the norm. The majors, once known for never
leaving money on the table, understood it was more profitable in the long run to
have every exhibitor on the same page. “Why bother to prepare and ship a DCP to
a theater that yields a box office take of less than $300 per day, from which the
distributor gets about only half?” Bordwell observed in 2012. “Distributors willing
to cut overhead and back-office operations may well regard the small houses and
circuits as simply a pain in the neck.”
Compared with many of his colleagues, Gajda was lucky. Over the next ten years,
he worked his way up to a management position for Ballantyne’s West Coast
division. But in February 2020, as Covid shut down theaters worldwide, the
company began losing business. Gajda was laid off, along with half of
Ballantyne’s employees. Most of the film industry would soon join them.
By October, NATO announced that nearly 70 percent of all small and midsize
theaters in the US were in danger of closing permanently, with one hundred
thousand potential theater jobs erased. The federal government’s December
stimulus provided a crucial $15 billion lifeline to live entertainment, some of
which went to movie theaters. Still, audiences aren’t expected to return to
prepandemic levels until 2024. And these are just the beginning of theaters’
problems.
Michael Karagosian, a film industry consultant who worked on VPF contracts,

told me that VPFs were temporary agreements intended only to fund the initial
purchase of digital equipment. The problem is that digital projectors require
considerably more expensive maintenance than 35mm ones. Most theaters will
need to replace their projectors in the next couple of years. The last VPF
agreements expired in 2020. AMC, Regal, and Cinemark are rumored to have
secured extensions because of Covid, but this will only be a brief reprieve. From
here on out, theaters are on their own.
The problems go deeper. In July 2020, Trump’s Justice Department announced

that their request to repeal the Paramount Consent Decrees, filed a year prior,
had been granted. Distributors can once again own the means of exhibition.
Block booking, illegal since 1948, is back on the table. In her decision, US District
Court Judge Analisa Torres stated that block booking was no longer relevant.
With new models of distribution having emerged since 1948, such as streaming,
she argued, “there is less danger that a block booking licensing agreement would
create a barrier to entry that would foreclose independent movie distributors
from sufficient access to the market.” Judge Torres is correct that block booking
is outdated, in the sense that the majors found a way around it: by producing
fewer films, most of which were blockbusters, they effectively preempted
theaters’ ability to choose what they want to show. But implicit in her opinion is
the assumption that there is no difference between watching a film in a theater,
at home, or on your phone. It suggests, as Netflix’s CEO Ted Sarandos has argued,
that the cinematic qualities of a movie don’t matter. At the heart of a film is a
“story,” which can be consumed on any platform and from any location. This is
the logic behind Hollywood’s multibillion dollar push into “content.” “Content,”
the formal vehicle for “storytelling,” can play more seamlessly on the twenty
billion internet-connected devices around the world, unlike the mere two
hundred thousand cinema screens that constrain “movies.” It can be watched
from a bus, a couch, or a bed. Like most entertainment, “content” appeals as
widely as possible in order to maximize profits. As Netflix’s cofounder Reed
Hastings has admitted, the company’s main competitor is not HBO Max or
Amazon but the biological need for sleep.
Theaters might not have realized it

then, but this was the first step toward
a new exhibition paradigm that would
no longer include them.
Tweet
Unlike the ever-growing fatberg of content, the cinema’s primary concern is to

see the world clearly. This is best done in a theater, where the images are large,
the sound is mixed, and a projectionist ensures with skill and attentiveness that
films are screened as their makers intended. And yet, for the majority of
Americans, seeing a movie theatrically has been a miserable experience for
decades. Most Americans go to multiplexes, and most multiplexes were built in
asphalt parks or inside malls on the outskirts of suburban sprawl. To get to them,
audiences must drive through traffic, sometimes pay for parking, and sit through
thirty minutes of ads and a lengthy blockbuster that costs well over $20 with
concessions — an experience that Sarandos unironically believes is “elitist.”
What projectionists know better than anyone else is that the cinema doesn’t
happen in multiplexes, at least not necessarily. It happens in auditoriums, around
which exhibitors have built lobbies, concession areas, and marquees; the cinema
can exist in any space with a projector, projectionist, screen, film, and audience.
When Lucas claimed that digital cinema would allow filmmakers to sell their
films directly to theaters, he correctly intuited that Hollywood was preventing
freer, more radical kinds of exhibition from existing. Today we are told by tech
fetishists like Kara Swisher that streaming is a democratizing force that will
liberate audiences from the Hollywood studios whose reliance on theatrical
release is outdated and arbitrary. For these subscribers, it is easier to imagine
paying a handful of corporations a monthly fee of $14.99 than, for instance, every
public library in the United States having its own movie theater. The latter is the
kind of exhibition paradigm that Hollywood, in shifting the industry from film to
digital on its own terms, sought to foreclose. Netflix, in pioneering the streaming
platform, has gifted Hollywood a digital exhibition model that appeals widely to
the millions of Americans cornered by multiplexes, without forcing the studios to
expand their film slates beyond IP-driven blockbusters.
Although streaming platforms are unconstrained by the traditional model of

making profits on individual films, the studios continue to make a very small
fraction of all the films made by American and foreign independent filmmakers.
When studios do, it’s only for the most established independents — whom Netflix
elects to call “creators” — and who command especially large production budgets,
such as Alfonso Cuarón with Roma, Martin Scorsese with The Irishman, or Jane
Campion with The Power of the Dog.
Tellingly, the vast majority of digital films that Hollywood produces bear little
resemblance to the guerrilla, made-for-nothing filmmaking that digital cinema
once promised. Around the turn of the millennium, a number of directors made
pathbreaking films that offered a vision of what future digital cinema might look
like: Agnès Varda’s The Gleaners and I, Lars von Trier’s Dancer in the Dark, Spike
Lee’s Bamboozled, and David Lynch’s Inland Empire, to name just a few. Shot on
prosumer camcorders, these films cast a wary eye on the spectacle of
entertainment and pointed to the detritus produced by a society so assured of its
own greatness. Digital filmmaking, as it exists today on streaming platforms and
in AMC theaters, demands the most expensive equipment with the highest
technical standards that produce the same generic look.
Disney’s Marvel Studios, the greatest champion of digital cinema today, spends
hundreds of millions of dollars on CGI that is designed to be spectacular but
whose purpose is abject. Marvel’s producers are known for using CGI in every
frame, replacing props and set pieces, giving characters new hairstyles, and
ironing away wrinkles from actors’ foreheads and creases in their suits. Like
Lucas’s editor who bragged about manipulating every frame in The Phantom
Menace, Marvel mistrusts the camera’s ability to capture the realism that unfolds
on set. The studio wants to tame what André Bazin described as “the irrational
power of the photograph” that is the basis of cinema; the image’s capacity to
misbehave in the future, no matter how hard one tries to direct it in the present.
Behind every instance of Marvel’s CGI is the hope for the blockbuster’s continued
supremacy.
In light of the repeal of the consent decrees, it’s clear that the myth of digital
filmmaking as a cheaper, faster medium than celluloid has become the remaining
big studios’ alibi for achieving what had been taken away from them: a
monopolization of all filmmaking activity — control over production, distribution,
and exhibition. Bordwell predicted that in converting to digital, exhibitors were
opening themselves up to a power grab. He noted that the perpetual capital-
intensive demands of digital exhibition would engender a situation in which
“only the permanently well-funded” would be able to exhibit films. Today we
know exactly who these players are: the Hollywood majors, Amazon, and Netflix.
But in the final turn of the screw, the majors no longer seem intent on
maintaining theatrical exhibition, nor the tech companies on saving it. Why
would they, when global streaming revenue is poised to reach $85 billion by 2025,
more than double what Hollywood was getting in global box office receipts?
If a Hollywood studio or tech giant purchases a bankrupt AMC or Regal in the

coming years, it won’t be to lock out independent distributors — they’ve already
informally achieved that through the blockbuster system — but to wind down the
theatergoing experience altogether, and to steer, as they did with digital
exhibition, a new distribution system to their liking, now centered on streaming.
What this might entail: a mass closure of smaller-market theaters, an even

shorter theatrical window, and higher ticket prices as theatergoing is repackaged
as a premium experience. In other words, a moviegoing experience whose sole
purpose is to qualify studio films for Academy Awards and make the price of a
Disney+ subscription look like a good deal.
More likely, they’ll let theaters wither away on their own. Speaking from Disney’s
Burbank studio, CEO Bob Chapek inaugurated the company’s 2020 Investor Day
by showing off a 1957 diagram of the company’s business structure, drawn by
Walt Disney himself. At the center of the drawing, around which all the
company’s squidlike appendages revolved, was “theatrical films.” As Chapek went
on to explain, the company’s future now revolved around Disney+. Hollywood
already has its alibi. “This one is for the fans,” claimed WarnerMedia CEO Kilar
while announcing that all seventeen of Warner Bros.’s 2021 titles would be sent to
streaming. Just like the myth that digital filmmaking is cheaper, it’s a narrative
that hits all the notes of democratic fellow feeling.
In reality, it’s for the stockholders. “[This] is about the survival of a telecom
mammoth,” the filmmaker Denis Villeneuve wrote in a letter to Variety. “One that
is currently bearing an astronomical debt of more than $150 billion.” Villeneuve,
whose blockbuster Dune was affected by the move, was referring to AT&T, parent
company to both Warner Bros. and HBO. In 2021 HBO Max grew its subscriber
base by over 20 percent.
Gajda, for his part, is following the money. In November 2020 he got a new job
with Best Buy’s Geek Squad. He now assists with home theater installations. +
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20/11/23, 20:54 Digital Rocks | Issue 42 | n+1 | Will Tavlin

Published in: Issue 42 : Vanishing Act

Publication date: Spring 2022

H OLLYWOOD IS TO T HE CINEMA what the United States is to the world. Its

On December 3, 2020, WarnerMedia CEO Jason Kilar announced that all of

But by midcentury, a number of developments imperiled the majors’ profits. One

Another threat came from international markets. Like other American

The digital revolution was invisible, and

Meanwhile, the rise of television began to break the industry’s monopoly on

who commandeered massive marketing and distribution apparatuses,

Meanwhile, theaters were losing control over their programming. As studios

with several independent theater owners in the Adirondacks, launched a group

A recent graduate of the University of Southern California, Lucas was well

Digital cinema would make filmmaking

Michael Karagosian, a film industry consultant who worked on VPF contracts,

The problems go deeper. In July 2020, Trump’s Justice Department announced

Theaters might not have realized it

Unlike the ever-growing fatberg of content, the cinema’s primary concern is to

Although streaming platforms are unconstrained by the traditional model of

If a Hollywood studio or tech giant purchases a bankrupt AMC or Regal in the

What this might entail: a mass closure of smaller-market theaters, an even

If you like this article, please subscribe or leave a tax-deductible tip

One Time Monthly

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