-- Digital Cinema is still a nascent technology and art form. Mr. Lucas explains his vision of what Digital Cinema will mean for the movie industry and for the consumer electronics experience.

Well, the thing that's going to happen as a result of all this, I mean, the thing hasn't actually happened yet. There will only be six people who actually have ever directed a movie digitally. So it's a very small group of people who have actually worked with this medium now at this point in time.

We've been struggling very hard over the last few years to get digital projection (into the theaters). Phantom Menace was the first major feature to be projected in digital. With the second film, we were hoping to get more theaters. For the third recent film, we didn't get that many more in the United States but we really got a lot more overseas. China's going digital and Europe is going digital. So, that's moving forward rather rapidly.

The result of all this is that more and more people will have access to making movies. The cost of distributing movies will drop dramatically. More and more distributors can come into the business; theaters will have more flexibility about moving movies around and utilizing their cineplexes in the best possible way. You don't get scratches, dirt, rips and tears and all the other things you get with a normal film as opposed to digital projection, so obviously the quality stays much better.

The other thing that's going to come along, which is now a very serious negative, is the movie will come in on the Internet. I'm not sure how it will actually play out but it seems to be something like the same day and date of a movie being released in a movie theater where you can have a group experience, you can also get it over the Internet. You can rent it for like two dollars, or you can buy it for like ten. If you buy it, you're going to download it into a server that you have at your house and it will just stay there. So you will have a server full of movies and music and all this kind of stuff. There won't be disks, those are going to disappear …pretty quickly actually.

Things are happening now, big screen plasma TVs, I have digital projection in my house, so I think more and more people are going to have sort of little media centers in their homes. The difference between a large, large, large plasma and a normal sized projector is not that different any more. So you can take your pick of those two kinds of mediums but I think the entertainment center in the home is going to become a bigger factor in how people see their movies.

I think people will always want that communal experience. People still go to football games in the middle of the snow and the baseball games even though they can see it at home, because they want to have the group experience. I think movies are like that, too. But when you can get it easily, get it piped into the home, pay for it automatically and you don't have to go some place, it will completely change the nature of free television, the nature of cable television and then this pay-per-view form of television, which is basically now handled by cable.

I think more people are going to be able to make movies, more people are going to be able to distribute movies, and it's going to be easier for the consumer to get the movies. You're going to see a lot of niche markets develop as a result of all this. The entertainment business is, kind of like the record business, going to be much more like a supermarket. Branding is going to be more important. The store will be full of stock. We never had that before really. You get it in the DVD store, but the thing is, it'll be one DVD store, a hundred times bigger than anything that exists right now. I know we have systems come out where you can go through and you can pick a director and you can see anything that director's done, or you can pick a star and see everything that the star's done, or you can pick a genre and see everything that's done in that genre, or you can pick years and see everything that's done in this genre in the last 20 years or for between the thirties and forties. You can really pick your taste. You don't have to wander.

One of the other things we're doing is going into television. We're getting out of the theatrical business because right now piracy makes it too tough for big movies. So instead of making a two-hour movie, we're going to make 150 hours worth of movies for the same amount of money.

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