Brazil takes lead role in move to all-digital cinema

But it's also home to the creative spark that was harnessed for more practical ends by Rain when they sought to develop a new digital exhibition and distribution platform. Using Windows Media 9 soft- ware, engineers came up with MPEG-4, video compression software that is cheaper and faster than the current system. The MPEG-4 software can squeeze a feature film onto a file of just five gigabytes, 15 times smaller than the MPEG-2 technology presently used.

The films are then beamed by satellite from Rain's central computer in Sao Paulo to picture houses across the country. Depending on bandwidth, it can take as little as 20 minutes to send a 90-minute film to a theater.

By eliminating celluloid and transport costs, distributors can quickly and cheaply beam blockbusters to distant towns the same day as they première in London, Los Angeles, or Sao Paulo. They can offer a wider range of films and even live broadcasts.

If films flunk at the box office, distributors can withdraw them immediately without having to rue the $750,000 it costs to make 500 copies of a big film like the Matrix or The Lord of the Rings. Such expenditures, combined with the prohibitive cost of transporting celluloid thousands of miles, explain why Brazil has one of the lowest density of screens per person in the world, an average of one screen per 105,000 people, far fewer than in the United States (one per 9,000), or even Mexico (one per 35,000).

It also explains why local distributors are keen to adopt the new technology. Valmir Fernandes, the director and president of Cinemark Brasil, a US chain that has 272 screens here, called the MPEG-4 system "the new technological reality."

These advancements coincide with a banner year for domestic films after last year's "City of God" made a big splash.

Fernandes warned it will take time for the system to take hold. Distributors, cinema owners, and studios all want one another to foot the bill for new digital cinemas. And until filmmakers start making movies exclusively on digital, there will not be enough such films to justify scrapping the current technology. Furthermore, because the MPEG-4 software is easier to manipulate, the new system has generated fears of piracy.

The first beneficiaries will probably be the independent distributors and low- budget filmmakers unable to afford the $50,000 it costs to make a celluloid master copy - and whose films are less likely to be victims of piracy.

Fernandes works with both the majors and the independents and said that no matter what happens, the Rain technology is here to stay. Hollywood may resist because of fears over piracy and losing control, but cinema cannot halt progress, he says. Through deals with US and British partners, Rain hopes to take its system global.

"We are here because this is an irreversible trend," he said. "You have a technology that is reliable and better than what went before. [If the future] is not with this Rain Networks format, it will be based on this format. It's just a question of time."

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