MUMBAI: Last year a total of 1,090 movies were produced in the country, thus making India the largest producer of movies in the world. In a scenario like this, digital cinema is changing the face of the age old cinema business and enabling simultaneous release of movies across centers.

Fuelling the growth of digital cinemas in the country is UFO Moviez, which invested Rs 800 million in 2006 to increase the number of digital cinemas to 585. The company has plans of scaling this to 2000 cinema halls across India with a total investment of Rs 3 billion by 2008.

Technology companies such as DG2L Tech, Panasonic, Hughes Escorts Communication and Famous Studio (Mumbai) are partnering UFO Moviez for the same.

The development on this front got better when digital cinema solution providers were exempted from the 12.5 per cent service tax. Additionally, the custom duty of 38 per cent has now been slashed down to seven per cent.

This clearly indicates that the digital cinema players will now invest in buying more projectors. Speaking to Businessofcinema.com, UFO Moviez vice chairman Raaja Kanwar says, “In 18 months we already have achieved a target of 625 cinemas and have over 200 pending applications. By Diwali 2007 UFO will have 1000 installations and by 2008 we will achieve a target of 2000.”

The Indian film industry loses almost 42 per cent revenue due to piracy each year. This is the money on which the government earns neither entertainment tax nor income tax. An early and widespread release of movies, enabled by digital cinema is likely to act as an effective deterrent to piracy. “The information and broadcasting ministry is really supportive of the digital cinema technology as it helps in curbing the issue of piracy in India,” says Kanwar.

What’s more, besides pan India installations Kanwar has also envisioned installations across the UAE, Europe, Singapore, Malaysia, Indonesia and Mauritius. The company also plans to start operations in Europe too, informs Kanwar.