[by David Hancock, www.filmjournal.com]
The clamor of cinemas for digital conversion during 2010 was such that, in a complete reversal of the situation experienced by manufacturers during the previous decade, demand outstripped supply during the latter part of the year, leading to a temporary projector shortage and one-third of the world’s screens being digitized by the end of the year. According to IHS Screen Digest figures, there were 36,479 ISO standard d-screens in the world at the end of 2010, jumping 123% from 16,348 a year earlier.
The number of American digital screens more than doubled during 2010 and really took off in the second half of the year (adding 5,757 new screens out of 8,358 net installations during the year), once the major exhibitor grouping of Digital Cinema Implementation Partners began its rollout in earnest. U.S. third-party facilitator Cinedigm is also experiencing a more rapid take-up of its second phase than in 2009/10, with over 2,000 screens now signed. There were 7,837 3D screens in the U.S. in December 2010, which is only 49.7% of all digital screens, low by international standards and indicative that the U.S. market began a full rollout before 3D took hold of global growth. Contrastingly, in Canada, 3D screens accounted for 87.7% of the 318 digital screens in place at the end of 2009, although this dropped to 77.4% at the end of last year, also suggesting that a 2D rollout has begun.
In Europe, there were 10,085 d-cinema screens at the end of 2010, of which 8,388 were in Western Europe and 1,697 were in Central and Eastern Europe. The wider 2D rollout has started amongst the larger European circuits, driving the d-screen total upwards. In the U.K., Odeon and Cineworld are both 50% digitized, French circuit CGR is almost fully digitized, and fellow circuit Europalaces has reached 60% conversion. In Spain, Yelmo is 55% of the way through and German circuit Kinopolis is 50% done. The third-party facilitators (Arts Alliance Media, Sony, XDC and Ymagis) are all growing their signed screens, with public funds now available to the industry in several countries, such as France, Germany, Denmark, Sweden, Finland and Ireland, and being prepared in others. In Eastern Europe, 94% of d-screens are equipped with 3D, underlining that so far digital means 3D and very little else. However, the Czech Republic has established a publicly funded digitization program and other countries in the region are exploring their options.
In Latin America, a similar 3D-driven situation applies, with 3D accounting for 90.6% of all digital screens.
In Asia, digital screens are primarily being driven by growth in three countries: China, Korea and Japan.
Leading Japanese circuits Shochiku Multiplex and Warner Mycal have signed up with a joint rollout program from Asian server manufacturer GDC and Japanese lighting conglomerate Ushio (accounting for 20% of the total screen base between them), while fellow major circuit Toho has signed a full deployment with Sony (16% of screen base). Japan was 28% digitized at the end of 2010, but these new deals ensure the momentum is fully maintained into 2011.
China’s digitization program grew very rapidly during 2010, ending the year with 4,200 d-screens in place (a growth rate of 91% in the second half of the year), of which 2,200 are equipped for 3D. This also highlights that, while 3D is very popular in China, the rollout is a wider one at its core.
Likewise in Korea, D-Cinema Korea (a joint venture between leading exhibitors Lotte Cinema and CJ-CGV) is moving ahead with its full digital rollout, pushing the territory to over 1,600 d-screens by the end of 2010 (80% of all screens), of which just less than a third are 3D-equipped. Hong Kong is also digitizing rapidly, with 155 d-screens in place out of a total of 209 cinema screens, or a 74.2% penetration.
The 3D phenomenon also continued apace in 2010, ending the year with 22,060 in place worldwide, 60.5% of the global d-screen number. Our graph highlights how important 3D was in 2009, following the immediate impact of the global financial crisis, accounting for 85% of all new digital screens installed. In contrast, during 2010, even if there were 13,016 new 3D screens installed, this accounted for a lesser proportion (68.7%) of all new installations, which backs up the fact that the wider 2D rollout began taking hold during the second half of the year, certainly amongst larger circuits. There were 25 major 3D releases in 2010, up from 16 in 2009 and compared to 44 planned for release in 2011, a significant ramping up from previous years. There is also a noticeable increase in 3D production at the independent level and this will feed through into the theatrical environment during 2011.
The funding group is making its presence known around the world. Such a grouping can work for large and small exhibitors, and for public, private and hybrid schemes. Such flexibility means that it will continue to develop as a tool for digitization in 2011. For larger exhibitors, we have seen DCIP in the USA, DCK in Korea and DCIP-A in Australia, all of which are up and running and driving digital development forward in those countries. For smaller cinemas, the funding group has been explored by ICAA in Australia and DFP in the U.K., bringing together a large number of smaller exhibitors into a group with larger market power and enabling an aggregation of turn rates across the whole group. It does rely to some extent on mutualization. In the public sector, both Norway’s single-sector model and the Dutch Cinema Digitaal used a contribution from the public sector and their organizing capability to enable a solution that helps all or a section of the market. In the past, we have also seen private funding groups operating in Denmark and the Netherlands. The common theme is that for all these groups, whatever type they are, they have the Virtual Print Fee at the core, underlining how a creative and positive approach to digitization overcomes preconceptions about whether the VPF is an exportable model.
The outlook for 2011 is continued growth of the digital screen base, pushed as in 2010 by 3D, but increasingly the wider 2D rollout will become the principal driver of digitization. IHS Screen Digest expects there to be more digital screens than 35mm screens in the world by the end of this year, signifying the beginning of the end for a global format that has served us well for over 100 years and outlasted nearly all of its analog counterparts in other mass media.
David Hancock is head of film and cinema at IHS Screen Digest, the pre-eminent firm of industry analysts covering global media markets including film, television, broadband media, mobile media, cinema, home entertainment, gaming and advertising. Screen Digest was recently acquired by iSuppli Corporation and together iSuppli and Screen Digest offer the most complete and insightful analysis of the global technology, media and telecommunications (TMT) sector. Hancock will moderate a digital-cinema panel on March 28 at CinemaCon in Las Vegas.
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