Digital projection at the cineplex will mean sharper images and may lead to more movies being released in 3-D.

Switching to digital from film will also sharply reduce distribution costs and that could plump the studios' bottom line over time.

A group of movie exhibitors and studios are expected to announce a deal today to raise about $1 billion to help convert 20,000 US screens to digital technology, the Wall Street Journal reports.

The studios are Lions Gate Entertainment (LGF), Viacom's (VIA) Paramount Pictures, News Corporation's (NWS) 20th Century Fox, General Electric's (GE) Universal Pictures and Disney (DIS).

The group of theater owners participating in the conversion to digital technology, know as the Digital Cinema Implementation Partners, includes Regal Entertainment Group (RGC), Cinemark Holdings (CNK) and AMC Entertainment Holdings.

Under the plan, the 3 theater chains will be able to outfit several thousand screens next year and complete most of the conversions in 3 or 4 years. It costs about $70,000 to equip a theater screen with digital projectors.

Digital projection will save the studios the cost of making prints. The new digital format will cost just a few cents per copy. It's also crucial to the rollout of equipment needed for 3-D movies.

Under the deal, the studios will pay their share by contributing the money previously spent on prints -- about $800 to $1,00 per film -- as a "virtual print" fee to help fund the conversion.

Sony (SNE) it pushing its own digital technology, known as the 4K SXRD. It offers 4,000 pixels per horizontal line, or twice the number now offered by digital projectors on the market. Later this week, Sony is expected to announce that it's struck a deal with Sony Pictures, Twentieth Century Fox and Paramount to provide theaters with Sony's projection system.

Digital technology means no more scratchy prints or contemplating your popcorn when the film projector breaks. Some film buffs say digital images lack the "warmth" of film. However, digital technology has replaced most film in still photography and even famed still photographer Ansel Adams would have been pleased with the sharpness.

In any case, those who will miss film are probably the same folks who pine for their typewriters.