Forecasts for the Future: Industry experts on the cinema of tomorrow
As we end our 85-year run, we asked four top experts in cinema technology to ponder the future of motion picture exhibition.
Imagining the Cinema of Tomorrow
By David Hancock, Director, Film and Cinema, IHS Markit
There is a well-known quote from Bill Gates that says: We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. As I have been asked to peer ahead to what cinema will look like in a decade’s time, you can reasonably assume that I will underestimate the differences that ten years will bring.
To understand the future of cinema, I believe we need to look at its past. What has made cinema so enduring is twofold: Firstly, the cinema provides a space for watching a story, and secondly, it is a shared experience. That is the fundamental nature of cinema, and any additions to the cinema will not alter that core but will seek to add to that.
I see several changes happening to the cinema industry now that will change its nature incontrovertibly and irreversibly. The first is the repositioning of cinema. For too long, the phrase “The Cinema Experience” was a hollow one, trotted out but not really understood. It was enough to be in a cinema, whatever it looked or felt like. The marking out of clear territory between the home environment and the cinema has begun in earnest, using tools such as technology, food and drink, comfort, design and service. On the technology side, PLF, immersive audio, HDR, 3D (done right) and immersive seating are examples of innovations that can add to the overall experience and will continue to take root and spread wider. At the high end, cinema is already achieving this clear demarcation with the home, but “standard” cinema also needs to achieve this whilst remaining affordable.
Within the cinema business, the consolidation that the sector is going through now will also have a profound impact on the industry. In a way that cinemas haven’t traditionally been used to, marketing needs to become much more sophisticated and more generally there will be increased specialization of the sector jobs, such as technology, marketing, spatial, experiential…and significantly more integration with other media and leisure sectors. The bigger consolidated companies will drive this, but it will spread across all parts of the sector. While large cinema groups may commoditize the building and experience of cinema, this leaves a clear opportunity for smaller and independent circuits to carve out their niche in the market. Often this has been through film choice, but the points of difference will become much wider and more varied.
One thing that won’t be around in a decade will be Film Journal International, which is merging with Boxoffice magazine, as you will have read. I would like to place on record my pride at being a contributor to this fine magazine over many years and to wish my friends there good luck in the years to come.
The Changing Landscape of the Cinema Business
By Doug Darrow, Senior VP, Cinema Business Group, Dolby Laboratories
Over the past 80+ years, the cinema industry has seen several significant technology shifts: Silent films evolved into sound, surround sound and then immersive audio, black-and-white advanced to color movies, and film transitioned into digital and now into high dynamic range (HDR) solutions. We have also seen tremendous momentum in the premium large format (PLF) market, pushing audio and visual innovations even further. Dolby has been a part of this transformational journey over the years, most recently with the introductions of Dolby Atmos and Dolby Vision.
Today, moviegoers have a lot of choices when deciding where to spend their money. Consumer options for entertainment spending now deliver incredible solutions for home and on-the-go experiences. The importance for exhibition to deliver great experiences has never been more imperative than it is today. The big-screen experience has always been the choice of creatives and remains the premier venue in the minds of most consumers. The emergence of the PLF solutions that include immersive audio and HDR are giving moviegoers a spectacular experience every time they step inside a cinema. Because of these expectations, it is more important than ever for exhibitors to invest in these technologies to counter alternative offerings and provide a premium experience.
As exhibitors outfit their cinemas with new technologies, we will see a further proliferation of immersive audio and HDR. Laser-based projection systems are now available from all projector suppliers, bringing improvements in dynamic range. Initially this has come through better black-level performance demonstrated by Dolby Vision projection systems, which now exceed the dynamic range of film systems. Higher dynamic range delivers higher perceived sharpness and is the most impactful image quality attribute for heightening the immersiveness of the projected image. In the future, laser illumination will also drive brightness improvements and continue to push dynamic range higher and deliver even more amazing big-screen presentations.
These technologies will become more commonplace to meet moviegoer demand as people want to be completely immersed into the story or event on the screen. With these advancements, content creators are also pushing the envelope when telling their stories. They want moviegoers to experience their story as they envisioned it from concept to final expression; to suspend disbelief and fully immerse them in the story with the most spectacular audio and visual experience available each time they step into a theatre. Content creators now have tools that can deliver a more lifelike and realistic presentation than at any time in the history of moviegoing.
The use of these new technologies in imaging and sound will also bring new forms of content and new experiences with existing content. Live events such as sports and music, simulcasted staged events, and gaming events are all forms of content that are possible as the industry drives for more immersive movie presentation. This will create new revenue streams for exhibitors and distributors and will continue to drive this business forward in the future. We see exciting opportunities as creatives embrace these solutions and deliver the most amazing group experiences to theatres around the world.
The Theatrical Experience Must Change in Response to Digital Disruption
By Dr. Man-Nang Chong, Founder, Chairman and CEO, GDC Technology Ltd.
We are living in an era of advanced technology. Yet, cinema exhibition and distribution were one of the last industries to convert to digital technologies for operations. Given the desire to convert the industry in a short timeframe, the initial rollout plan could only take advantage of existing digital technologies.
Fast forward to today, and the industry is facing the challenge of replacing the existing legacy infrastructure to take full advantage of the cost efficiencies and labor savings associated with fully computerized platforms that not only virtually eliminate the need for human intervention, but also offer experiences no one thought of in the pre-digital cinema era.
New technologies bring new business opportunities. Alternative forms of entertainment, including pre-show entertainment, have developed into viable businesses during the last decade. Not long ago, the theatrical pre-show meant projecting from a slide projector cycling its way through 81 images at ten seconds each. Today, the pre-show is polished and professional, a blend of sight, sound and motion designed to inform, promote and entertain. Before 2000, exhibition of alternative content was limited due to the expense of printing, shipping and managing 35mm film. Now, digital screen advertising and the event-cinema providers are generating billions of dollars of ancillary revenue for exhibitors worldwide.
To face the challenge head-on and to stay competitive, the movie industry is using technology to enhance the viewing experience, focusing on cost and convenience on one hand and building new or remodeling theatres to provide a high-end experience on the other. Beyond the power recliners, state-of-the-art projectors and sound systems, and full food and drink services, many theatres are redefining the moviegoing experience by using digital technologies to introduce a premium out-of-home entertainment option similar to going to Broadway shows or the opera.
There are also several other disruptive technologies that theatres can embrace to make the moviegoing experience more convenient in the future. For example, in urban centers where on-demand ride-hailing services are becoming more popular than car ownership, a theatre chain can make it easier to choose their locations over competitors by forming a partnership with Uber or Lyft for discounted rides redeemable with online ticket purchase. Without technological progress, the cinema industry will impact a wide range of industries. Fewer people going out to movies could logically result in fewer people dining out, therefore putting a damper on the business of adjacent restaurants and retailers.
However, there seems to be far more value in controlling demand over controlling supply in the cinema industry. For example, the business model is mostly based on controlling supply, as content providers decide which movies to show and how many screens they will be shown on. Content-streaming platforms, on the other hand, are all about controlling demand by going directly to the customers and owning that customer relationship with a superior user experience.
With an explosion of content competing for viewers’ attention, at-home viewing at a high level of quality and availability, and TV attracting all demographics, it’s becoming increasingly difficult for studios to monetize their investments in theatres beyond opening weekend. And since 2015, on-demand streaming has taken over DVDs as the primary distribution channel for at-home entertainment.
To be clear, it’s vital for the future of the industry to allow full control of the viewer experience. Streaming services enjoy an advantage that theatre owners don’t when it comes to content discovery — simply going directly to viewers and saying, “We know you will like this and that, and we are pretty sure you will enjoy this as well. You only need to trust your own taste (and our algorithms),” especially for the younger generations who eagerly embrace streaming platforms.
In order to compete with streaming services, we formed GoGoCinema™, a new company for theatres to up their game by allowing the consumer to control both supply and demand with its powerful software app. Similar to the direct-to-consumer, data-driven nature of Netflix, GoGoCinema will offer consumers the choice of what to see, when to see it and where to see it, leveraging GDC’s new disruptive technology…Cinema Automation 2.0, or simply CA2.0.
CA2.0 was developed with machine intelligence and the latest software technologies to change the way management performs content ingestion and playback, scheduling and screening quality, while lowering operating costs by reducing one of the most common failure points in digital cinema playback…the hard drives. But the secret sauce behind CA2.0 is its capability to store thousands of movies, allowing consumers using the GoGoCinema App as wide a variety of content as offered at home.
As the movie business continues to morph and evolve alongside shifting audience behavior, it’s time to consider deploying a direct-to-consumer content strategy that piggybacks off an advanced disruptive technology platform to reach customers anytime, anywhere.
Yes, the theatrical experience is changing in response to the disruption of digital technologies. GDC’svision is to produce game-changing business applications by amalgamating cinema automation, cloud computing and prevalent use of smartphones for purchases to attract new consumers and create new lifestyles centering around cinema. Similar to a smartphone with so many useful apps designed for unprecedented growth in business and economy, it is GDC’s dream to turn the cinema of tomorrow into a “smartphone” for new business opportunities for the industry. To GDC, the future of cinema can be summed up in four words: Technology is your friend.
Experiences: Driving Cinema Forward
Wim Buyens, CEO of Cinionic, asks: “What’s next?” After ten years in cinema, and 85,000 projectors installed globally, you could say he is emotionally invested.
The experience economy: Where does cinema fit?
Today’s consumers and the customers of tomorrow seek more than just products—they seek experiences. In the entertainment industry, we have seen a proliferation of experiences for an increasing number of platforms. Technology has evolved to enable new forms and formats for entertainment delivery and experience. The new wave of choice in an experience-driven market puts pressure on all of us in cinema to deliver something unique. That’s why Cinionic’s tagline is “Experiences. Delivered.”
For me, it is about creating entertainment destinations. Places where we can deliver the “Wow” factor to captivate today’s moviegoers and keep them coming back for more. People want to experience something profound. As an industry, we need to provide the solutions that make “Wow” moments possible, accessible and affordable.
A sustainable future in a post-VPF era
In a landscape that keeps evolving, it can be challenging to determine which technologies are truly worth investment. Remember the rapid rise of digital cinema? Ten years ago, nobody expected that it would have the footprint it does today. Soon, we’ll cross the 200,000-screen threshold worldwide. The same thing is happening now with laser projection and HDR.
The post-VPF era is a driving force in the development of alternative business models that make new technologies available to exhibitors. At Cinionic, we are introducing laser-as-a-service to the market to enable our customers to stay ahead: an hourly driven projection model to provide quality, flexibility and peace of mind to theatre owners. Our commitment here is simple: to help the industry shine and grow in today’s new entertainment environment.
The road ahead
Theatre owners who want to be successful need to be aware of these rapid changes in the competitive landscape. We have seen the road ahead before; over the past decade we have seen the transition from analog to digital. The same transition is now taking place with technologies like laser, but also through new services and premium solutions that combine to deliver entertainment destinations.
The choices we have to make are not simple: Is it better to invest in a state-of-the-art projector, powerful surround sound system or the most luxurious reclining loungers first? How do we get new people to the theatres or keep audiences coming back more frequently?
We are invested in the road ahead to address the challenges and opportunities faced by exhibitors across the world. Whether it’s through delivering “Wow,” peace of mind or financial flexibility, we continually ask ourselves: How can we use innovation to enrich the overall cinema experience? After all, it’s not about the equipment. It’s about the experience.