Last month, Oscar-winning director Peter Jackson of Lord of the Rings fame started shooting the film adaption of The Hobbit, another JRR Tolkien work. This early the film has been getting much attention and is anticipated to be another box office hit, but from a technology standpoint, what goes on behind the cameras are proving equally interesting.

Jackson has eschewed film for digital sensors in shooting ('filming' sounds a bit over-taxed here) his latest epic. But before anyone has images of a slew of DSLRs firing at 24 frames per second in 1080p resolution, it must be said that the hardware in use is as much like a DSLR as a nuclear reactor is to a portable Honda genset.

Jackson is using true industrial strength digital video cameras supplied by Red Cameras. Analogies seem to be a convenient tool here, and Red video cams are essentially the digital equivalent of Panavision motion picture cameras. And in truth they are. The Hobbit will be filmed on Red's second generation Epic camera system. Epic cameras have a 14 megapixel sensor good enough to shoot 5 thousand line resolution video (4k lines is considered film-quality) at a speed of up to 120 frames per second. Epic cameras create images over five thousand pixels across, the processed image is still measured at over 4K, significantly more than 35mm motion picture film. RED's recent developments in extending dynamic range with HDRxTM, which expands the camera's dynamic range (it ability to capture continuous shades of each colour) to as much as 18 stops. By comparison, the film has a dynamic range of 12 to 14 exposure stops, and consumer digital cameras work at less than 10 stops. Each exposure stop constitutes a doubling or halving of light intensity depending on what direction the exposure scale is going. Just like the first generation Red One camera, the Epic cameras can use a wide variety of lenses. From the über expensive master primes from Zeiss or Arri to the versatile pro and prosumer DSLR lenses from Canon.

Despite the steady encroachment of digital technology into motion pictures–the last bastion of 35mm film usage, there have been relatively few players in the ultra high resolution digital video space. There is a tech-based limiting factor but it does not reside in hardware as much as it does in software. Specifically in compression technology which in this rarefied space cannot ever be "lossy."

Lossy is the term used to describe JPEG, MPEG and their various iterations where reductions in image sizes are considered fair trade-offs for a 'loss' in image quality. Large file sizes present major problems to videographers because they not only have to ensure adequate space to store footage but also the technology to move images from camera to storage device as fast as it is being exposed, and this can be up to 120 frames per second with each frame up to 14 megabytes in size. In other words, they must figure out a way to move video data at the rate of about 1.3 gigabytes per second. That is a requirement enough to give the best data bus technician a migraine.

To support the storage demands of Epic cameras, Red is using their own proprietary lossless compression algorithm called Redcode, that compresses raw data from the sensor and allows the flood of information to be captured on media as small and convenient as a compact flash card. This is a technological breakthrough, as the unprocessed raw information is compressed with no visible loss, offering a variety of compression choices and allowing the user to choose the best compression for the job.

The Hobbit can very well be among 2011's critical raves much as what the Social Network was in 2010–that was shot on Red digital cameras too.