Movie’s 4k revolution

Latest figures from Screen Digest reveal that digital screen capacity has reached over 40 per cent in Europe (14,000 of 35,000 screens). France now boasts 3,300 digitised screens and there are over 2,000 in the UK.

German take-up lags due to financing problems. Some of the larger German cinemas are eligible for VPF (Virtual Print Fee) financing scheme but others have to finance themselves or apply for regional help.

Russia is catching up. It has the fourth largest 3D screen base in Europe, with 60 per cent of screens digitised. Norway has become the first, fully-converted D-cinema territory with 450 digital screens. A third of Spain and Italy’s screens are digital, with 60 per cent in the Netherlands.

Since James Cameron’s film Avatar helped blast-off appetite for 3D, the medium’s penetration has tailed off. But it still accounts for over two-thirds of the European digital screen base.

47% of US 3D screen use Sony 4K

One can still argue about the pros and cons of 2k versus 4k, but all the manufacturers now offer 4k systems. And a tasty series of 4k movies are due to be released by studios next year.

With cinema attendance under attack from home downloads, the chains anticipated that digitisation could also help boost revenue with alternative content, from live sports to rock and opera. In practice, alternative live content has yet to boost box office takings significantly. Typically it accounts for five per cent or less, though ticket prices are double those for films.

The big players

The digital cinema projector manufacturers are Sony, Christie, Barco and NEC. All say they have had a great year.  Sony offers its own 4k SXRD technology, with Christie, Barco and NEC basing their systems on Texas Instruments (TI) 2k and increasingly 4k DLP technology. Image quality is roughly similar, though 4k is generally only perceived to boost image quality for large screens above 70ft by reducing stairstep jaggies.

High performance digital cinema equipment is designed to meet the demanding image quality, security, playback and playtime reporting standards of the Digital Cinema Initiatives (DCI) standard, as specified by six major US film studios. It’s referred to as D-cinema. Far less demanding and insecure HD-based projection systems are termed E-cinema, and currently dominate emerging territories like China and India.

The big benefit of digital cinema comes in terms of slashing replication and distribution costs, while boosting opportunities for film distribution and alternative content. Films produced to the DCI standard are typically stored on 300GB hard drives and distributed at a fraction of the cost of traditional prints, which cost up to £1,000 each.

Though satellite distribution is already playing a significant role in the US market, adoption in Europe has been slow to take off because of the variety of languages required.

NEC is negotiating to equip 1,900 European Odeon venues

Sony reckons 47 per cent of all 3D screens in the US use its 4K system. Being rolled-out to the VUE, Showcase, Apollo and Everyman cinema chains,

Sony 4k accounted for around a third of UK screens by September 2012. David McIntosh, director of Sony Europe maintains: “Our digital business has really taken off in the UK, Germany and Nordic territories in the last 12 months. Initial demand was driven by 3D, but the main motive now is to boost management efficiency.”

The cost of conversion does not come cheap. Key suppliers estimate it costs £60,000- £100,000 per screen including digital projection equipment, server, installation, warranty and support, compared to £30,000 for a traditional projector.

The cost hurdle has undoubtedly been lowered by introducing the VPF scheme put together by six main Hollywood studios, distributors in partnership with certain European integrators. VPF is backed by the studios with the benefit of massive savings from digital film distribution. Capital costs are then recovered over seven to 10 years.

Sony has VPF agreements in place with six major studios and 50 distributors across the world. Under the VPF agreement, Sony acts as an integrator, as well as supporting running and maintenance over 10 years from a remote operation centre under the CineWatch scheme.  McIntosh reckons “VPF offers more of a managed service than a conventional equipment purchase. This suits exhibitors better as they don’t have to fork out investment upfront but can manage income and outgoing throughout the life of the service.”

Wim Buyens, senior VP entertainment, Barco

Digital systems also offer vastly improved film security. Film is couriered to the cinema in an encrypted form on a hard drive, then a special security code is sent to the cinema to allow the film to be shown, so content security and registered playback is always under close control.

Sony has also been pioneering the satellite distribution of alternative content. In the summer Sony streamed the Wimbledon Tennis Championships in 3D live to about 200 cinemas in 22 countries worldwide.

NEC has also seen significant growth in sales of digital projectors over the past year. A digital roll-out contract was signed with Odeon in the UK at the end of 2010, and discussions are being finalised with Odeon in Germany, Italy, Austria and Spain. The plan is to convert 1,900 digital cinemas for Odeon UCI across Europe.

Cineworld has converted about 70 per cent to digital in the UK. EuroPalace Pathe is very close to total conversion in France, with 50 per cent of its estate using NEC projectors and the balance using Cinemechanica and Barco equipment. NEC also has a relationship with UGC in France and other territories, and is supplying significant volumes of digital equipment to other countries through integrator partners.

NEC business development manager Mark Kendall claims “VPF is making a significant impact on digital conversion, utilising European-wide integrators like XDC and Arts Alliance as VPF gatekeepers for the major studios.”

NEC recently introduced a DCI DLP 4k resolution projector. Typically, 4k systems are 15-20 per cent more expensive than 2k systems. Kendall insists: “Unless you are operating a very large screen, you can’t tell the difference. However, you can achieve as good a quality as 4k on a small or large screen by increasing the frame rate to 60 frames per second.”

Christie digital cinema projector

Both James Cameron and Peter Jackson are currently shooting films at the higher film rate for release next year.

Christie considers itself number one in terms of global installed base. Says Richard Nye, cinema sales director of Christie EMEA: “We’ve had year on year growth of about forty per cent, with well over 6,000 installed digital screens in EMEA.”

Nye also believes the big trend to watch will be faster frame rate for 3D. Christie has just signed up a five-year deal with James Cameron’s Lightstorm company for a technology exchange on high frame rate developments of 48 and 60 frames/sec. “The higher frame rate will probably be more important than 4k digital cinema, as it allows film makers to improve the quality of images using the available bandwidth,” he says.

Interestingly, 4k still accounts for less than five per cent of digital video projectors worldwide, “and is never expected to be shipped in the same quantities as 2k projectors,” says Nye.

Christie is currently developing integrated media block technology, where the content is held on an external hard drive offering increased bandwidth to support 4k digital projection.

Barco saw its digital business nearly double over the past year, with the expansion of more than 20,000 cinema projects worldwide and a new joint venture in China between Barco and the China Film Group. Barco claims it is the market leader in terms of digital projector sales, with a 60-70 per cent penetration in China, 50 per cent in Europe and 36 per cent in North America. Recent deals have been signed with Cinestar in Germany, Nordisk in Denmark and Cinema City in Eastern Europe.

Barco has digital cinema projection manufacturing plants in Belgium and China and has acquired 3D audio Auro3D technology. The company has introduced a 4K projector in partnership with TI and Cinemark, and is also investing in a remote theatre content management system.

New markets

Looking at some of the emerging markets, Wim Buyens, senior VP Entertainment at Barco reflects: “The Chinese Government has plans to get digital cinema into nearly every corner, including tier two and tier three cities.”

David McIntosh, director, Sony Europe

Around 7,000 digital projectors have been rolled out to date, with a target of 40,000 D-cinemas in China within five years.

India has only 1,000-1,500 D-cinema screens out of 10,000 screens. “There is a big interest in digital cinema, but VPF is rarely available and many cinemas are waiting for cheaper projection technology,” says Buyens.

The Latin American market is still limited but growing. Japan has been rather slow to adopt digital cinema. It doesn’t embrace VPF because there is a lot of local film content.

Digital roll-out looks unstoppable but even the leading suppliers recognise there will be a taste for traditional film among some of the independent chains, particularly in markets which have a high concentration of local content and where big studio-backed VPF won’t make economic sense.

There are few signs that the investment cost will fall dramatically, given the relatively small number of potential digital cinemas worldwide (100,000 in total) compared to consumer digital product sales.

www.christiedigital.eu
www.NEC.com
www.sony.co.uk/biz
www.barco.be