RISE OF DIGITAL CINEMA IN THE UNITED STATES: A COST-BENEFIT ANALYSIS
Ashley B. West (Dr. Gregory Bushong), Department of Management and Accountancy, The University of North Carolina at Asheville, Asheville, North Carolina 28804

Over the last century, the cost of individual films has increased significantly due to inefficient distribution.  Digital technology has the potential to reduce the cost of printing and shipping films.  Instead of making thousands of hard copies of each film and shipping them to exhibitors, distributors send a digital copy of the movie via the internet or satellite.  Distributors will save millions with the rise of Digital Cinemas; however no one is switching over. Exhibitors are the ones who have to pay most of the transition costs.  Therefore, the costs fall on the theater owners, rather than the distributors, who actually stand to gain from the switch to digital.  From a business perspective, exhibitors must decide whether this form of distribution will stimulate enough revenue or reduce enough costs to justify the investment.  Through a random survey of theater owners, opinions and data will be collected to determine if exhibitors are willing to purchase digital equipment and under what conditions.  Also, by conducting interviews with major distributors, actual cost savings and opinions can be determined.  Through an analysis of the advantages, disadvantages, and costs associated with Digital Cinemas, I intend to propose different strategies to implement the digital projectors into theaters successfully and reach a medium that benefit both the distributor and exhibitor.