Digital Revolution

"Digital cinema in the Asia-Pacific region continues to expand on a country-by-country basis, with an interesting mix of distribution infrastructures ranging from locally created e-cinema networks up to full DCI-specified 2K networks. Unlike the U.S.—or even the European markets—progress in Asia varies by country depending much on the status of the domestic cinema industry and the local popularity of Hollywood content.

Missing so far in Asia are the pan-regional third-party providers who provide financing, integration, and distributor-provided conversion incentives. Companies like North America’s AccessIT and Technicolor and Europe’s XDC and Arts Alliance Media have yet to emerge in the Asian market. The driving factors in the Asian rollout tend to be local exhibitors themselves who want to get ahead of the curve, the equipment vendors who are trying to jump-start business, and in the case of China, government incentives.

In China, digital-cinema deployment is being supported by the China Film Group Corporation (CFGC), the Chinese state-owned company which is leading the Chinese film industry. CFGC got off to a roaring start in 2002 with initial purchases of pre-DCI MPEG-based equipment with 1.3K projection technology. China deployed 100 of these systems in major market cinemas that typically play Western content. As Hollywood standards began to evolve, CFGC took a wait-and-see attitude to further investments and remained largely quiet on further large-scale d-cinema deployment. Instead, CFGC moved forward by deploying a large number of e-cinema systems using standard three-chip DLP projectors and GDC servers in theatres that play domestic content, while keeping a close eye on evolving d-cinema standards.

In 2007 China renewed its commitment to install 2K DCI-compliant systems in large numbers. Both Belgium-based projector manufacturer Barco and the Singapore-based server manufacturer GDC Technology (GDC) have been the driving forces in the recent China rollout. In spring of 2007, GDC and Barco jointly announced a deal with Chinese exhibitors for 700 units coordinated through CFGC. Following on this announcement, GDC announced that CFGC, working with Shenzhen-based Institute of Digital Media Technology (Shenzhen IDMT), will install 2,000 of its DCI-2000 integrated systems in Chinese theatres by the end of 2008. The GDC DCI-2000 combines a GDC SA-2100 server and a Barco DP-2000 projector into one easy-to-deploy package. As of December 2007, approximately 300 of these systems have been installed in China.

GDC has also been busy installing its Total Digital Cinema Solution in various Chinese cinemas such as the Golden Harvest Shenzhen. This package includes equipment for d-cinema, onscreen advertising and in-lobby advertising, along with a central management system to control these systems.

Korea is leading the world in installation as a percentage of existing screens, with approximately 185 of its 1,700 screens equipped. Unlike China, the cinemas in South Korea didn’t begin seriously converting until DCI and 2K projection became the norm. Both Barco and Christie have established strong positions with dealer and exhibitor alliances. Initially QuVIS had the dominant server position, followed closely by GDC. Recently, Doremi has focused its sales and support in the Korean market and to date has installed approximately 50 servers. Christie has recently taken the lead in projector sales with approximately 100 installations to date.

The rollout in Korea is largely being driven by competition among the major exhibition groups. Exhibitors CJ Entertainment, The Lotte Group and Megabox, along with numerous independents, are all in competition to provide tech-savvy Korean cinemagoers the best possible experience. The Megabox COEX Cineplex in Seoul was the world’s first all-digital multiplex, with all 16 screens equipped with Barco projectors in the summer of 2005. Digital 3D has also been a huge hit with Korean moviegoers, with 11 of the Lotte screens being equipped with Real D’s stereoscopic system.

NEC, also a manufacturer of DLP Cinema 2K projectors, has recently renewed its focus on the Korean market with the appointment of Hyosung ITX Co. Ltd. as a sales partner. NEC also has a sales relationship in the Hong Kong market with Strong Westrex, a subsidiary of Ballantyne of Omaha and a leading supplier of cinema equipment for the region. NEC is actively expanding its sales and support throughout Asia in anticipation of strong demand for 2008.

The digital rollout in Taiwan is moving slowly ahead, with approximately 10 digital screens in operation. Sales are being driven by individual titles, particularly those in digital 3D. For the November 2007 release of Beowulf 3D, Ambassador Theatres will install one Dolby 3D system at their Xinmen Ding site and add one more Dolby server at its Global Mall site. Over the next year, Ambassador is planning to install three more digital screens. Also for Beowulf 3D, GDC Technology will be installing two of its SA-2100 servers along with Christie projectors in Cinemark’s Core Pacific multiplex.

Much like Taiwan, Thailand has nine d-cinema screens in operation and is adding as needed to play specific titles. Thailand’s leading integrator, Goldenduck Group, has been responsible for overseeing recent installations with SF Cinema, who recently added two additional installations using Barco projectors and Dolby servers with 3D enhancements.

In Japan, T-Joy continues to lead the conversion with approximately 30 of Japan’s 70 equipped screens. Earlier this year, T-Joy installed nine NEC NC2500S projectors at its flagship Shinjuku Wald 9, making it the first fully digital complex in Japan, and later T-Joy installed three more NEC projectors at their Nagaoka multiplex.

Dolby has been particularly active in the Japanese market with the installation of 19 of its servers and is working with T-Joy to install Dolby 3D Digital Cinema systems in a number of their multiplexes across Japan. In addition, Imagica, one of the largest motion picture film laboratories in Japan, has been equipped to generate DCI-specified files and has installed the Dolby SCC2000 mastering system.

Sony is said to have seven Japanese theatres equipped with its 4K SXRD projection technology on a trial basis. Doremi has also established a footprint in the Japanese market with 10 recent server installations in several Shochiku and Tokyu cinemas.

India has been a solid e-cinema market, with many flavors of MPEG-2 and MPEG-4 based systems being deployed around the country. In the north, the UFO Moviez network has installed over 500 e-cinema systems in cinemas playing Indian-produced titles. In the south, Chennai-based Qube System has been actively deploying e-cinema networks for several large Indian exhibitors including E-City, Pyramid Group, Cinemeta, and others. Although starting with e-cinema, Qube is expecting to upgrade many of these to fully compliant DCI systems in 2008. Recently, Sathyam Cinemas installed six Qube XP-D servers with Barco DP-100 projectors in all six of its screens at its flagship multiplex in Chennai and is planning to expand to over 100 screens throughout southern India, all with DCI-level 2K equipment and Qube servers in 2008. Working with Qube, 200 of the top independent Indian exhibitors plan on upgrading their existing e-cinema equipment to d-cinema beginning in early 2008.

With the size and potential of the Indian market, it is no surprise that many other equipment venders are looking at India with eager anticipation. Dolby Laboratories has an agreement in place with a major Indian service provider to install a Dolby SCC2000 Secure Content Creator for local content creation and mastering. In addition, the agreement includes over 250 Dolby Digital Cinema servers to be installed over the next few years to provide a DCI-compliant screen base for Hollywood movies in India.

In Australia and New Zealand, d-cinema literally means 3D, as all of the 21 digital screens in the region are 3D-enabled, most equipped with Barco projectors and Kodak servers.

Kodak Australia is Real D’s exclusive agent for Australia and New Zealand and has been responsible for the large majority of digital systems deployed in the area. Building on their success with the ACOS pre-show delivery system, Kodak has been deploying their JMN3000 server with the Kodak Theatre Management System (TMS). This TMS provides exhibitors with centralized control over the systems while also being watched over by the Kodak service and support team from Kodak’s central network operations locations.

So far, digital conversions down under have been driven by specific titles. Hoyts and Reading Cinemas have added several new installations for the November 2007 release of Beowulf 3D.

Several larger screens, the Cineplex Victoria Point in Queensland and Hoyts’ Sylvia Park in New Zealand, are set up with dual-projector 3D to achieve higher brightness on the wider screens. Australia’s Atlab Image & Sound Technology has been doing much of the system integration working with Kodak, Dolby, Christie and other vendors.

In 2007, both China and South Korea made significant progress with the conversion of their exhibition industries to digital. In China, the growth can be attributed to strong governmental support for programs to modernize their cinema industry. In South Korea, the progress was primarily the result of fierce competition among several vertically integrated—and therefore well-financed—cinema circuits.

In the smaller markets and with the independent exhibitors, however, the economics of the digital deployments remain a challenge. With no clear emerging regional deployment plan providing studio incentives to convert, installations are on a screen-by-screen basis and being driven primarily by a few titles available in 3D.

Regardless of studio incentives and deployment plans, d-cinema installations will certainly heat up in 2008, as there are many more 3D titles in the production pipeline. Whether 3D exhibition is a novelty—or becomes part of mainstream cinema for the foreseeable future—the increased box-office results make the exhibitor’s conversion a more local, immediate and understandable business decision."

By Bill Mead, FilmJournal International