Great Halls of China
"GDC Technology of Singapore has been a driving force behind Asian digital cinema for the past seven years. We recently spoke with GDC’s founder, Dr. Man-Nang Chong, about China’s ongoing 2,000-screen deployment and the Asian digital-cinema business in general.
FJI: With over 1,000 installations worldwide and now with the recent deployments in China, GDC is positioned as the world’s second-largest integrator of digital systems. Can you give us an overview of GDC’s business strategy?
Dr. Chong: First, we continue to allocate our resources on research, technology and manufacturing. I like to believe GDC prevails by taking feedback from our customers and building cost-effective solutions that meet their needs. By listening to the exhibitors and supporting them, GDC continues to grow its market share through trust and respect. In China, we have grown our market size from almost zero to more than 95% today. Our market share in Singapore, Thailand, Taiwan, Hong Kong and Korea is more than 60% combined. Our customers realize that they could count on GDC for the past seven years and they can continue to rely on us for many years to come.
FJI: China has committed to installing 2,000 DCI-capable digital-cinema systems in the next two years. Can you give us an overview of GDC’s role in the deployment and how the partnership came about?
Dr. Chong: In 2006, the Institute of Digital Media Technology Limited [IDMT] entered into a cooperation agreement with China Film Group Corporation [CFGC] for a term of ten years, whereby IDMT and CFGC agreed to jointly promote digital-cinema business in China. GDC is engaged to supply, install, maintain and network-manage the digital-cinema systems at the top 100 cinemas in China.
FJI: What is the status of the deployment today and is it going as expected?
Dr. Chong: We have retrofitted close to 500 cinema theatres with our DCI-2000 Integrated Projection System so far. Recently, Sony Pictures’ Pursuit of Happyness was released in China in digital only with more than 500 digital copies. That said, the number of installations falls short of our year-end goal of 700 installations due to the unavailability of projectors and delivery delays caused by China’s severe winter weather.
FJI: Mr. Cheng Yang, CFGC manager of digital cinemas, gave us an impressive presentation at CineAsia explaining how they have arranged their theatres into several tiers of quality. Can you give us an overview of how China has segmented the digital-cinema market?
Dr. Chong: We believe that almost all commercial cinemas in China cities will eventually install DCI-compliant systems, although some second-run cinemas may choose to install non-compliant systems for showing local content. For non-commercial cinemas in smaller towns and rural areas, China’s SARFT [State Administration of Radio, Film and TV] is promoting low-cost digital systems as an alternative to their existing 16mm projectors.
FJI: I understand that GDC is also managing the distribution of feature content, including pre-show and advertising. Can you give us an overview of the network GDC is building to support distribution to the cinemas?
Dr. Chong: GDC provides the network operations center [NOC] service to customers such as CFGC, Dadi and Golden Harvest cinema chains via modem and ADSL. With the NOC, we can deliver the KDM keys, pre-show content, onscreen advertisements and in-foyer advertisements. Today, some of these cinema multiplexes’ foyers feature LED panels, all connected to a GDC SDM4000 Display Maestro that is capable of delivering multiple HD streams. All the displays in the foyer are connected to our Theater Management System (TMS), which is linked to the cinema’s ticketing system for scheduling. Using our TMS, cinema operators can now display the full array of trailers, advertisements and other pre-show content on both the in-foyer displays and in-theatre screens from a central point of control.
FJI: Security is a large part of the DCI specification. How is security being managed and how are the keys distributed?
Dr. Chong: GDC’s EN2000 encoder has been deployed in China and Hong Kong, where the DCI encoding is performed in faster than real-time. The encoder also provides DCI-compliant KDM key management for the distribution of the content. Depending on the distributors, the KDM keys can be delivered to the cinemas via e-mail, NOC or physical delivery.
FJI: How is the supply of digital titles in China? How much from Hollywood and what is available from Chinese distributors?
Dr. Chong: Since the first installation in May 2002, the digital screens in China never go dark. There has always been a strong supply of content competing for the digital screens, whether it is from Hollywood, China, Hong Kong or other markets. There are reasons for such demand: 1) the digital-cinema theatres are the top-grossing cinemas in China, 2) the huge savings in distribution cost, and 3) the limited number of digital-cinema theatres in China. We observed in quite a few instances that the distributors were competing for the same digital screens in China.
FJI: At the theatres, how have the Chinese exhibitors accepted the transition to digital? Have there been any unexpected obstacles in getting the theatres to accept the technology?
Dr. Chong: Most of the deployment work is being done by CFGC. GDC plays the role of supplying, installing and maintaining the network. Judging from the high number of installations within a few months, I believe the Chinese exhibitors must be comfortable with the digital systems. In fact, one province has almost been completely retrofitted. Since the availability of the installed digital systems is approximately 99.8%, their ease of use certainly prevails over the legacy 35mm projectors.
FJI: What is the status of 3D in the Chinese and Asian markets?
Dr. Chong: 3D digital cinema only recently began to receive attention in Asian markets with the exception of Korean exhibitors, where GDC shares more than 60% of the Korean 3D market. In Hong Kong, three out of four 3D digital-cinema installations use GDC servers. We also have a strong presence in Taiwan and Singapore for 3D digital cinema.
In China, there is no digital 3D yet, but certainly the wave will catch on when the 3D content is available. China is evaluating the 3D technology and the business terms with the current providers. Most exhibitors in these regions would like to avoid trapping themselves with a proprietary technology that depends upon a single supplier of glasses and services. The Asian moviegoers seem to prefer large-screen 3D presentations than the smaller screens required when using existing 3D technologies. The disadvantage of the existing 3D solutions is their low light levels. Whether the 3D is based on polarization or legacy color-separation technology, a single projector can only offer so much light.
We believe a non-proprietary 3D process that drives two digital-cinema projectors is an attractive alternative considering the declining price of projectors. Besides, you will get considerably more light output and more color information by having the server driving two projectors compared with the single-projector 3D presentations.
We invited delegates to view GDC’s True 3D Digital Cinema server at work and they were amazed with the brightness and vivid color presentation. Our server is currently the only one in the market that provides two streams of synchronized 12-bit 4:4:4 images and is agnostic to 3D technologies. It also supports dual-projector as well as various single-projector 3D systems.
FJI: Aside from feature titles, has alternative content been used?
Dr. Chong: In Singapore, the digital-cinema theatres have successfully played opera in the theatres for more than a month and I was told the response was quite good. We are not aware of any alternative content plan for China digital-cinema theatres. I like to think China must build enough digital-cinema theatres to avoid competing for the digital screens before planning for alternative content.
FJI: What has been the audience reaction to digital cinema in China?
Dr. Chong: The majority of moviegoers do not differentiate the traditional 35mm from digital cinema and there is no specific effort to promote digital cinema in China. I believe it is best to leave the moviegoers to enjoy the movies.
FJI: You have been a leader in the Asian digital cinema business since 2000. As a final question, I would like to hear your thoughts on where GDC and the industry are going and what may be in store for the next few years.
Dr. Chong: We constantly face the predicament between innovation and following the rule. Although the DCI specifications have leveled the playing field for server manufacturers, GDC avoids making a commodity server that is no different from others.
The debate on 4K versus 2K is an interesting issue. The 2K projectors have been delivering bright and vibrant images that meet today’s needs. Besides, the wide installed base of 2K systems over a long period of time has proven its technology and reliability. Perhaps super-bright 4K projectors could be used in very large-screen cinemas for special-venue applications.
I still hate to answer the question “when the transition from analog to digital will be complete,” but at least now no one asks the question “when the transition will begin” anymore. I believe the impasse between the distributors and the exhibitors is really about how to share the cost in the transition, and this is slowly being resolved. With regard to China, the transition from 35mm to digital is continuing and it should take approximately three years for all the top-tier cinema multiplexes to convert to digital."
By Bill Mead, Film Journal International