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Audiences may not have noticed, what with all the glitz and glamour of this weekend's Oscars, but the movie industry is transforming before their eyes.

Film has relied on digital post-production to add those must-have spectacular effects. But even car chases and space battles fade with time – or at least they used to on standard 35 mm film, which can get scratched, torn or melted.

While your neighbourhood theatre – or the behemoth complex next to a highway – may not seem much different, things are changing from film to digital in the projection room. Instead of multiple projectors with racks of film reels, you'll increasingly find souped-up digital light projectors thousands of times more powerful than those at your local Future Shop. It's a movement well under way.

At last year's Toronto International Film Festival, nearly half of the 30 screens were equipped with digital projectors made by Kitchener, Ont.-based Christie, the dominant player in the digital projector market.

With more than 4,400 of their top-of-the-line CP2000 series projectors installed in theatres around the world, Christie controls more than 80 per cent of the market. Their machines have launched major digital movie premieres, including Star Wars: Episode III - Revenge of the Sith, Pirates of the Caribbean and Beowulf.

The shift to digital projection is mostly driven by cost: Theatres and movie producers save money, and the machines are flexible enough to allow theatre owners to rapidly accommodate an influx or decrease in demand.

There is some irony in Hollywood's digital renaissance, considering digital technology has caused such consternation in the industry. Theatres have suffered in the 21st century as more consumers opt to watch movies (sometimes pirated) on their own high-tech home theatres. The early part of the decade saw a drop in box office receipts and, despite a recent increase, more theatre tickets were sold in 1998 than in 2007, though the number of films screened has risen, according to boxofficemojo.com.

Studios and theatre chains are banking on digital projectors to entice moviegoers. “The quality is better with digital,” says Gerry Remers, chief operating officer of Christie. “The prints don't get scratched, the reels aren't shown out of order and don't break, there's no dirt on the gate and the colours are locked in to the original and don't vary from print to print.”

The deal clincher for the industry, though, is the savings in operating costs. While film prints cost up to $1,500 (U.S.) each, digital files are stored on 250 GB reusable hard drives that cost a few hundred dollars. However, a multi-screen cinema needs only one copy of the digital film. The projectors, each of which incorporate a server, can be linked together as a network so a film on a single hard drive can be shown on multiple screens. With as many as 4,000 prints of a film required for an average North American release, the savings in digital are substantial.

Still, there are some issues to be worked out by movie theatres and Hollywood. The first is the cost of the projectors themselves. Because of high intensity light sources and sophisticated electronics and computer components, the machines cost about $100,000 each and don't last as long as old-style film projectors.

To offset that, Christie has brought in a financing partner – much like car manufacturers have financing units – to offer leases and loans to customers.

The plan is for studios to levy a virtual print fee, which theatre owners will pay each time a movie is shown. That charge replaces current film rental fees.

Also, since digital data are eminently more vulnerable to unauthorized copying, according to Christie's Mr. Remers, the machines must be equipped with multiple layers of control.

“The prints are digitally watermarked and uniquely identified,” he says. “Also, the projectors are sealed. To operate them you need an authorization code. If they're tampered with they will not work until a technician resets it.”

Despite the costs, theatre owners are clearly focused on the advantages as they strive to again become an entertainment destination.

Indeed, Cineplex, which has 1,329 screens in 132 locations from B.C. to Quebec, is showing New York Metropolitan Opera season live along with NHL games and other special events.

“It (digital projectors) gives us a lot of flexibility,” said Cineplex Entertainment vice president of communications and investor relations Pat Marshall. “If we see people lined up for a movie we can add it to screens, which we can't do now if we don't have a print.”

Special to The Globe and Mail