Technicolor Funds Limited rollout of Digital Cinema. (Media & Technology).

In the biggest push yet to bring digital cinema to the movie-going masses, a partnership of Technicolor Inc. and Qualcomm Inc. is footing the bill to outfit more than 100 theaters nationwide with its digital exhibition systems this year, at a cost of about $150,000 per theater.

So far, only about 20 theaters in North America are equipped with the expensive digital systems, including three in the Los Angeles area.

Many in the industry say that the cost-saving potential makes it only a matter of time before digital projection and distribution become the norm. But a litany of unanswered economic and technological questions have delayed the widespread rollout of digital systems. In particular, both the studios and the nation's financially strapped theater companies have balked at paying to upgrade theaters with digital systems.

Now Burbank based Technicolor Digital Cinema says it will underwrite the cost of installing its digital hardware, an investment the company hopes will allow it to gain incumbency in the race to set the technological standard. Other players in the field are Boeing Co., Sony Corp. and Eastman Kodak Co.

In exchange for providing its projection systems to theaters, Technicolor Digital will receive an undisclosed flat fee each time a digital movie is shown.

"We are confident in the system's abilities," said Russell Wintner, a principal at Technicolor Digital. "What we are really trying to do is produce enough systems to drive the prices down and make it viable for the studios to release more digital films."

First mover advantage

Rohit Shukla, president and chief executive of Larta, the technology think tank housed at USC, said there is value in Technicolor Digital being first out of the gate. The group will release a report on digital entertainment this week.

"It upends the current posture of everyone," Shukla said of Technicolor's willingness to pay for the dissemination of its system. "Everyone is so paralyzed by the idea of someone else getting ahead that it will push things forward."

Ron Stein, the owner of Crest National Digital Media in Hollywood, said he is impressed with Technicolor's product, though he noted that merely putting its systems in theaters does not guarantee success.

"Technicolor has a name, a brand and that's clearly advantage," Stein said. "But this is technology that improves by leaps and bounds every six months. Replacing all that equipment is very expensive."

In Los Angeles, Technicolor already has installed one of its projection systems, which includes a projector, software and digital storage devices, at the Loews Century Plaza 4 and has signed a deal with The Bridge at the Howard Hughes Center, now in development.

Although the Larta report and others assert that current encryption technology is sufficient to satisfy the studios' fears of digital piracy, quality concerns are a lingering roadblock to the widespread use of digital projection systems. Movies released so far in a digital format have had 2,000 lines of resolution, compared with the typical 4,000 lines of resolution on film.

Wintner acknowledged that the company is taking a financial risk by paying for installation of its systems. But he said that the anticipated increase in the number of films released in a digital format over the next couple of years offers ample revenue opportunities.

Films need not be shot with digital cameras to be projected in a digital format and several studios have begun limited digital release of some titles. The latest was Warner Bros.' Rat Pack remake, "Ocean's 11."

And while some filmmakers have employed digital technology right down to the filming, others insist that digital prints -- while free from scratches and degradation -- can never match the warmth of traditional celluloid.

"The technology is improving, but you can't look for complete perfection in a new product," Shukla said.