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The State of Cinema

Inavate Asia Pacific
March 2015

Catching a movie at the cinema is one of Asia Pacific’s favourite pastimes. Hurrairah bin Sohail takes a look at how the audio and visual technology, as well as the market, is developing.

Movies are big business in Asia Pacific. Increased demand for films from countries like China has made the APAC region an important market globally. Asia Pacific also has its own thriving film industries in countries like India, Hong Kong, South Korea and Japan just to name a few. This makes the cinema sector an extremely interesting and attractive sector for the AV industry.

Goldenduck Group is a cinema integrator in the APAC region. Partnered with NEC it provides sales and system integration services to cinemas in Thailand, Vietnam, the Philippines and Malaysia. Ian Riches, director for Goldenduck International Malaysia, says regarding South-East Asia’s fondness for cinema: “The cinema sector continues to grow in all the South-East Asian territories Goldenduck operates in. In Malaysia for example the cinema box office has tripled over the last eight years and continues to increase as cinema exhibitors add more screens. It’s a similar story in Vietnam and the Philippines, whilst Myanmar and Cambodia are just getting started.”

Other integrators and end-users in Asia Pacific also report growth. Clara Cheo, CEO of Golden Village Multiplex, states that Golden Village (GV) has recently increased its screen count from 89 to 92 to meet the increasing number of cinema-goers in Singapore.

Danson Foo, managing director for Euegentek Corporation in Malaysia, says: “Currently, Malaysia has 800 screens and most of these screens are located in prime sites in major cities. The next phase for cinemas will be to expand to smaller towns. I foresee at least 500 more screens coming up in the next five years for the population of Malaysia, which stands at over 30 million in 2014.”

Ben Wilson, business development and operations manager for Edge Digital Technology, talks about the Australian market: “Cinema numbers in Australia have remained relatively constant for the last eight years. But there are several new multiplex cinemas currently in construction in developing residential areas outside major capital cities.”

Raja Enok, chief marketing officer for Real Image, explains the cinema market in India: “There is both growth and consolidation in the cinema sector. Several of the larger groups in the region have been taking over smaller groups to consolidate their position and get strategic cover across the region. New screens are coming up in malls across tier B and C towns across the country.”

However, growth is starting to stagnate in developed and mature markets. Min Khoo, sales director for Barco in South Korea, also relates a similar situation: “The Korean multiplex cinema started from 1998 and there are too many cinemas in every town now. Hence major multiplex cinemas face strong competition from each other in Korea. But audience numbers are still growing because of the success of the local film industry.”

In Asia Pacific, urban markets for cinemas are saturated. But the numbers of cinema-goers is increasing and to cope with this new cinemas are being constructed away from city centres to increase the range of coverage provided. This surge has been made possible by the digitisation of cinema.

Going digital

Riches says: “It is worth mentioning that digital projection equipment makes it possible to build cinemas more efficiently and in spaces where 35mm couldn’t be accommodated. You can have a cinema without a projection room, and this is going to be increasingly important for smaller locations in provincial cities.”

Integrators from Australia, Singapore and Malaysia report that digitisation for cinema is 100% complete in their markets. The conversion process was not always easy but has been effectively implemented, leaving South America as the only region that lags behind. Enok narrates some troubles faced by the APAC markets: “The high cost of digital systems and customs duty rates made it difficult for cinemas to upgrade to digital systems. Deployment agencies, like us, work to make this process smoother by consolidating VPF and other revenue streams.”

From a systems integrator and technology perspective digitisation has streamlined the programming and exhibition of movies - Ben Wilson, Edge Digital Technology

Wilson talks about the way forward for the cinema sector after the completion of digitisation: “From a technology perspective the conversion to digital cinema hardware was an unprecedented expense the industry needed to undertake. Now that digitisation is complete and studio subsidy deals are underway as a generalised sentiment the industry needs to concentrate on the business of showing movies and recouping the investment made to convert.”

He continues: “From a systems integrator and technology perspective digitisation has streamlined the programming and exhibition of movies reducing the labour input with the projection space whilst enhancing the movie going experience offering a significant improvement in picture and sound quality.”

Riches from Goldenduck also agrees that digitisation has been beneficial for system integrators: “The switch to digital is complete in all our territories and the relative complexity of setting up and maintaining digital systems means that system integrators will have a key role to play.”

However this means that system integrators working in the cinema sector must be prepared for the new landscape. Wilson says: “The industry has undergone a huge technology change where the way movies are exhibited has required a complete change in hardware and workflow processes. We are now seeing rapid development of digital cinema hardware as well as the advent of new audio technologies. Remaining up to date with industry developments and new hardware releases requires significant time and research.”

Jason Leong, business development manager at Electronics & Engineering, says for Singapore: “The general trend in terms of AV equipment for the cinema sector seems to be geared to improve and enhance the experience of the movie-goer and future options for cinema might be moving towards boothless projections.”

In Malaysia, Foo says: “Current trends for cinema are digital signage advertising in the lobby and new dimension of cinematic experience such as IMAX, D-Box and Dolby Atmos (multidimensional sound). Soon 4D and theme park motion effects technology will be the next bandwagon to drive traffic into the theatre.”

Cheo from Golden Village sheds more light on the technology requirements of cinemas: “As a cinema operator, the standard equipment required is usually a high-end digital projector, a digital audio processor and a digital server. We will also need to beef up the cinema capabilities with broadcast grade equipment i.e. satellite receivers, decoders, matrix switchers, de- embedders and much more to support alternate content and live content brought in locally and globally.”

When it comes to digital cinema, the DCI standard is the preferred format for mature markets. Foo from Eugenetek states: “Projector and servers are required to be DCI compliant. DCI is a joint venture of major motion picture studios, formed to establish a standard architecture for digital cinema systems.”

This however means that the field of products suitable for use in digital cinema applications is narrowed.

While mature markets may prefer DCI, the emerging markets do have an alternative option to choose. Enok from Real Image, talks about the level of digitisation in India: “Most key screens in India now use digital technology. About 2,000 screens are equipped with DCI compliant systems and about 7,000 screens have E-Cinema Systems. Since a very high percentage of exhibited content is local, most screens use E-Cinema Systems which are cost effective given the average ticket price point.” E-Cinema System was developed in China and is widely used in the country as well.

Brighter future

With regards to technology, the way forward is supposed to be led by the advent of higher brightness, laser projectors. Henry Noel, regional sales manager (South- East Asia) for entertainment solutions at Christie, explains the allure of laser projectors: “Certainly wider colour gamut, high contrast ratio and high lumens output such as 60,000 lumens with scalable options, 14fL light levels for stereoscopic presentations as opposed to conventional 3D light levels greater than 5.5fL are the key drivers.”

Foo also sees similar benefits for the cinema sector from laser projection: “It is set to rejuvenate the 3D cinema experience with extraordinary brightness, image uniformity and low cost of operation.”

Cheo from Golden Village says: “Laser will be the next big thing that will replace the current Xenon lamps and it delivers fairly constant brightness. Furthermore unlike Xenon lamp’s lifetime, which can range from a few hundred hours to a few thousand depending on the wattage required, laser can deliver much more and has an approximate lifetime rated at 50,000 hours.”

Enok gives a snapshot of the level of usage for laser projection in India: “Laser is making its entry at two levels. At the giant screen level it has a lot of play since budgets are larger for such venues. Again, at the entry level segment, Real Image has introduced laser projectors for smaller screens that are well priced and allow the screen to save on lamp costs over the years.”

But while integrators and end-users remain bullish regarding the prospects of laser projection, they also believe that there is still some way to go before the technology becomes adopted on a larger scale. Wilson from Edge Digital Technology says: “No high brightness products have been deployed within our market yet. With studios advocating higher light levels for 3D playback, high brightness laser could have an application in the large screen sector of the business particularly. Cost of ownership and image quality will be the two major factors that determine the success of laser.”

Cheo also identifies cost as the primary factor holding back the adoption of laser projectors: “As of now, most cinema operators are holding back the laser upgrade due to the high cost. Having said that, laser is the future of the digital cinema light source and once it its ready for mass market distribution I believe everyone will switch to it and seize the advantage and the mileage that it can deliver.”

Terence Heng, vice president of Shaw Organisation (a cinema operator), also says: “Laser projection is still in its infancy and while there are some available in the market, they are too expensive to be deployed on a mass scale. And since most exhibitors have only recently (less than five years) just spent a lot of money changing from 35mm to 2K and 4K, it will take a little long for laser to become mainstream. That being said, laser is a great step forward with a better colour dynamic range and promised cost savings for the operators.”

However, when it comes to audio the technology landscape is comparitively more stable. Dolby 7.1 channel and 5.1 channel systems are standardly employed while Dolby Atmos is being adopted by forward thinking cinema exhibitors. Cheo says: “The current audio standard was to playback movies in Dolby 7.1 format. Cinemas have also adopted 3D sound that is multi-dimensional. Currently the biggest player for audio is Dolby with its Dolby Atmos as well as Barco with its Auro-3D.”

Other cinema operators give similar views. Heng says: “With digital cinema, 5.1 is the minimum standard with uncompressed audio. Dolby has created 7.1 and Atmos to keep themselves ahead of the curve. Barco has their Auro 11.1 and IMAX will introduce its new sound systems really soon too. Which format will become the next standard, depends on a lot on the content and if the audience can really ‘hear’ the difference and is willing to pay for it.”

Riches adds: “Dolby 7.1 audio is the most popular standard by far. Of the new so-called ‘object based’ systems, Dolby Atmos is the market leader with over 800 installations worldwide. Barco competes with its Auro system and there are a handful of other systems in various territories. We have installed a significant number of Atmos systems throughout South-East Asia. It has been well received by the cinemagoers and with the right sound mix really does add to the movie experience.”

Immersive audio is the next step and Wilson states: “The Dolby 5.1 standard is the most widely adopted standard in the territory. Dolby 7.1 is also deployed. The next great leap forward within exhibition is immersive audio. To date we have seen a relatively conservative take-up of immersive audio.”

Better audio and better visuals driven by improvements in technology are a given. Riches says: “Now that the sector is freed from the constraints of 35mm film you can expect to see continuous technical improvements. Things like 4K resolution, brighter 3D and laser will be adopted by the better financed exhibition companies. Film makers will be pushing for higher frame rates and soon you’ll be hearing about high dynamic range relating to cinema.”

Wilson believes that adopting the technology of the future, when it becomes available, is vital for cinema operators: “It’s absolutely essential that the cinema space continues to offer the moviegoer the best in sound and the best in picture with an offering of quality and scale that is not available anywhere else. The industry needs to continue to develop and deploy new technologies that enhance the movie going or story telling experience.”

Better quality and improved experiences at the cinema are required to compete with modern forms of content delivery. When services like Netflix allow users to view their favourite movies from the comfort of their own homes, cinemas need to step up their game. In Enok’s opinion, cinema will rise to the challenge: “Cinema has always survived various challenges, be it from television or personal devices. Giant screens and other value adds like immersive audio solutions will keep cinema ahead and keep bringing customers back to the theatres.”