The section of the DVD-ROM on film distribution covers the high-budget, mass-market commercial end of the process. See the 'links' box on the left of the page for more sources of useful information - especially the ScreenOnline page which explains just exactly how expensive and time-consuming traditional film distribution is.
For the business side of the movie industry, the most compelling aspect of digital cinema is distribution. In today's system, production companies spend a lot of money producing film prints of their movies. Then, working with distribution companies, they spend even more money shipping the heavy reels of film to theaters all over the world, only to collect them again when the movie finishes its run.
Because the distribution costs are so high, production companies have to be extremely cautious about where they play their movies. Unless they have a sure-fire hit, they take a pretty big risk sending a film to a lot of theaters. If it bombs, they might not make their money back.
If you take the physical film out of the equation, things get a lot cheaper. Digital movies are basically big computer files, and just like computer files, you can write them to a DVD-ROM, send them through broadband cable or transmit them via satellite. There are virtually no shipping costs, and it doesn't cost the production company much more to show the movie in 100 theaters than in one theater. With this distribution system, production companies could easily open movies in theaters all over the world on the same day.
The digital distribution system also helps out the individual theaters. If a movie sells out, a theater could decide to show it on additional screens on the spur of the moment. They simply connect to the digital signal. Theaters could also show live sporting events and other digital programming.
However, you should not forget about the low-budget end of things.
Social networking sites such as youtube and facebook allow small, independent film-makers to find an audience, gather a following, and generate a word-of-mouth buzz about their work. In extreme cases it may even lead to interest from the mainstream industry. Just look at what happened to Fede Alvarez's homemade trailer about an alien invasion. http://news.bbc.co.uk/1/hi/8417789.stm
No, seriously. Look at it. It's completely brilliant.
There is some debate about exactly how original it is. See how many references (or rip-offs, if you prefer) you can spot to films like District 9, Independence Day and Sky Captain and the World of Tomorrow - and by the way, there's an instant commendation to any of my students who can spot the reference to Battleship Potemkin. But then, when has Hollywood ever been particularly bothered about originality?
The point is this: just as the proliferation of digital technology is allowing more consumers to become creators, so those creators are also becoming their own distributors, marketers and promoters. Digital technology is increasingly blurring the lines between parts of the film-making industry which were traditionally very separate.