Digital deadline: As North nears capacity, Southern Europe struggles
In mid-2013, we find digital conversions in the Europe, Africa and the Middle East (EMEA) slowing as the major cinema-going markets near saturation, with Northern and Western Europe virtually done with either 100% conversion or few remaining independents to go. In the past few years, virtually all major European circuits have been fully digitized and most high-profile independents in key markets have fully embraced digital and have long since converted.
Norway was the first to change over completely in 2011, followed by the Netherlands, and other Northern countries in 2012. Currently, the U.K., France, and Scandinavia are estimated to be over 95%, with Germany gaining rapidly. Parts of Southern Europe, particularly Spain, Portugal and Italy, along with much of Eastern Europe, are moving along, with most countries reporting well over 50% completion.
On the other hand, many territories in Southern Europe, particularly those with both difficult economic situations and a large percentage of local independent exhibitors, are lagging behind. Making their situation more challenging, distributors and exhibitors in these markets now have to support both the new digital systems already in place as well as continue with their existing 35mm infrastructure.
As with the rest of the world, in Europe the rapidly completing picture has digital-cinema equipment vendors searching for new markets. For new sales, vendors are looking toward the expanding markets of Eastern Europe and the developing countries in the Middle East and Africa. Beyond traditional cinema, equipment vendors are turning their attention to cinema-related markets such as special venues, public arenas, and even high-end home installations.
Fortunately for most in the cinema industry, the full digitization of cinemas does not mean the end of their business prospects, but instead the beginning of a new era. Most of the existing digital-cinema providers—companies who have been instrumental in connecting exhibitors with the studio’s VPF incentives—are now expanding with alternative-content divisions, content preparation, and digital distribution services. Digital technology brings new companies with new skill sets into the market, such as high-end alternative-content providers, satellite distribution specialists, and a range of companies now providing the software that monitors performance and integrates former standalone cinemas into full digital entertainment networks.
An excellent example of this diversity can be found in France, where five years since its inception, digital-cinema provider Ymagis, with a staff of 120, operates across Western Europe from its headquarters in Paris with offices in Barcelona, Berlin, and Dusseldorf. As well as managing the VPF contracts for 180 exhibitors covering 2,800 screens (2,300 are already deployed in France, Germany and Spain where Ymagis has the lead position), Ymagis provides equipment sales, rental, and installation services. In addition, Ymagis also is managing DCP (Digital Cinema Package) duplication and deliveries with more than 25,000 feature DCPs last year, and over 30,000 deliveries expected in 2013. Ymagis has digital laboratory service centers operating in France and Barcelona, with a new facility to open in Berlin this summer, all including restoration services and 4K/3D workflows. Ymagis also provides a range of software tools for exhibitors, distributors and producers, including a TMS (Theatre Management System), QuickDCP (a web-based DCP generator), along with back-office software to manage data flows, DCP/KDM (Key Delivery Message) delivery and ingest monitoring tools.
Another approach to addressing the needs of the maturing market can be found with Unique Digital, based in Bergen, Norway, and Dublin, Ireland. Unique has found that cinema operators are looking for ways to maximize their investment and optimize their operations, particularly in the areas of IT and network operations. To address these, Unique has focused on enhancing its proprietary Rosettabrige™ TMS, and its integration with external systems and pre-show advertising. In effect, Unique has diversified from a software company to a consulting systems integrator –looking at each cinema’s needs individually and finding the best solution. Since no two projects are alike, digital is offering more choices in how exhibitors run their business.
Unique has also signed all major and local distributors to its digital distribution service which covers 100% of the Norwegian cinemas. Unique believes Norway is the first country in the world to have an entire terrestrial network dedicated to cinema distribution. On average, Unique distributes seven feature-length DCPs per week plus advertisements and trailers to each Norwegian cinema. Of particular interest to distributors is the ability to book deliveries without any minimum site requirement and they can add new bookings as often as they wish. Both cinemas and distributors have access to a web portal and smart-phone app so they can see at a glance how the delivery of each individual DCP is progressing.
Unique has also developed a digital version of their Advertising Accord sales and management system, now being used to manage pre-show content in Norway, Sweden, Denmark, Finland and 100% of the U.K. and Irish market. A recent addition to Unique’s tool set is an end-to-end delivery platform that automatically schedules pre-show content and delivers it direct to each cinema. This solution provides an operational savings to the cinemas as it reduces the amount of time required to build a weekly schedule. In addition, Unique has implemented its proprietary BaseKey KDM delivery solution eliminating the need to move keys by e-mail or USB by using a secure web portal. Unique will also be releasing their RosettaNet software this June, which will allow cinema owners to manage their entire chain through a secure web-based interface.
Also related to Norway and software, London’s Arts Alliance Media (AAM) has rebranded Nordic Digital Alliance (NDA) that it acquired in 2011. Originally, NDA was formed as a joint venture between AAM and a consortium of Norwegian businesses to roll out digital in Norway and to develop advertising solutions. In addition, AAM announced a partnership with Norwegian cinema equipment provider Videvox to be the exclusive distributor of AAM digital-cinema software in Norway, and a non-exclusive reseller in Sweden and will also be responsible for cinema support throughout Norway. Since AAM’s acquisition of the company, the NDA-developed advertising management software is undergoing further development and now forms part of AAM’s comprehensive cinema software suite.
Christie, the U.S.-based projector manufacturer, also had a good year in the EMEA markets, with numerous exhibitor installations and support of multiple film festivals—including Cannes—with projection equipment. In combination with AAM, Christie continues to deploy digital projectors for Ster Kinekor in South Africa. In Turkey, with partner Astel, more than 500 screens have gone with Christie at Mars Entertainment Group. In Bulgaria, the Arena Group Bulgaria has seen Christie deployments with their partner dcinex. In both Bulgaria and Romania, Cinema City has installed several hundred Christie projectors. And, according to Neva Research, Christie continues to hold a strong position in the Russian market with over 43% market share.
The British Film Institute is continuing its longstanding association with Christie with the up-to-the-minute installation of new 4K DLP® technology. With its high frame rate, the acquisition of the new CP4230 will enhance the BFI Southbank’s cinema experience—particularly its 3D exhibits—delivering more than 34,000 lumens. Of special interest to smaller exhibitors, the Christie Solaria One had its technology preview at the June 2012 CineEurope, prior to being officially launched at ShowEast in November. The Solaria One brings the advantages of digital projection to smaller screens in the independent and community markets.
Christie projectors lit up the screen last summer as numerous German drive-in locations converted from film projectors to Christie’s DLP Cinema projectors, hosted by Checkinevent GmbH based in Mülheim an der Ruhr when—in cooperation with moviescreens GmbH—they converted various German locations into drive-in cinemas. Using a Christie CP2230, together with a Doremi server and the equipment to send sound to the car radios, they provided cinema flair at the Schalke arena, the Münster/Osnabrück airport, the Borussia-Park in Mönchengladbach, the stadium in Dortmund and at the Essen/Mülheim airport.
Christie also demonstrated its first prototype laser projector with a screening of Hugo at the IBC Big Screen event in Amsterdam, showing how it can deliver unprecedented light levels and, in the process, addressing one of the cinema industry’s most pressing problems—low light levels for 3D. XPAND provided their active Infinity 3D glasses for the demonstration. And last fall, Christie opened a new, expanded Paris office to serve its growing European customer base.
Digital distribution (i.e., satellite or fiber as opposed to physical discs) is a hot topic across all the mature markets, with a number of vendor announcements already in 2013. Last fall, dcinex, the Belgium-based d-cinema provider, and satellite services provider Eutelsat Communications signed an agreement to create DSAT Cinema, a joint venture to deliver content throughout Europe. Eutelsat and dcinex have been working in the market for the last three years. More than 700 sites in 20 European countries are already equipped by Eutelsat for reception of live and pre-recorded content. DSAT Cinema will offer a single point of contact for a full range of services, radically simplifying the process of operating in a fully digital environment for content owners and distributors. DSAT Cinema assisted the French fashion giant Etam in its catwalk show, which was transmitted live to 20 cinemas in 3D in France. DSAT was the technical partner organizing the transmission on behalf of Pathé Live.
Technicolor also expanded its digital-cinema satellite distribution service in Europe, entering into a partnership with leading electronic delivery provider, SmartJog. The partnership enables Technicolor to offer a complete distribution service using the SmartJog satellite network, which has access to more than 1,000 sites in nine European markets. In addition, last fall Technicolor announced its distribution partnership with Unique Digital to provide drive replication and electronic distribution capabilities in Norway.
GDC Technology, who opened its European office in Barcelona in 2012, announced that “Foresti Party Bercy” was performed and distributed live last September via satellite on over 120 screens using GDC d-cinema servers in Belgium, France, and Switzerland.
Spain certainly took the spotlight in the past year. Arts Alliance Media signed with Spain's Cines ABC chain to upgrade 55 of Cines ABC's screens in five sites across the Valencia region. The deal is being done under the AAM/Barco leasing program, whereby the digital-cinema equipment is financed by AAM and Barco. In addition, AAM and Grupo Sade signed a VPF agreement for their 20 screens in San Sebastian. Every cinema will install AAM's TMS software and in addition AAM will install Doremi servers along with Arqiva equipment for the receipt of content via satellite. These installations will be carried out in conjunction with AAM's Spanish integration partner Suministros Kelonik, Spain’s leading cinema integrator. Ongoing maintenance and support will be provided by Kelonik's Network Operations Center (NOC), alongside AAM's London-based NOC.
Ymagis, working closely with NEC and Doremi, also announced several key deals in Spain. CineSur Circuito Sánchez-Ramade, a family-owned circuit based in Andalucia, concluded an agreement for the installation of digital in its 125 screens. Proyecson, the Valencia-based installation company, will be responsible for the installation of digital systems consisting of NEC projectors with Doremi’s Integrated Media Blocks (IMB). Also, Cines Renoir, run by Spain’s well-known Grupo Alta Films, a production, distribution and exhibition company, converted the screens of seven of their cinemas.
Also in Spain, Odeon & UCI Cinemas Group selected Unique Digital’s RosettaBridge TMS for deployment in Spain being carried out by dcinex. In Spain, Odeon & UCI Cinemas Group trade under the Cinesa brand and operate 510 screens at 43 sites. The new installation in Spain bringing the total number of European Odeon screens managed by Unique Digital’s Rosettabridge to 1,427 across 162 sites.
Doremi, the USA-based server manufacturer, claims the leading spot with 66% of all European installations using projectors with DLP Cinema technology (Barco, Christie, and NEC). In the United Kingdom, where 95% of the cinemas are equipped, NEC reports a healthy 48% market share of d-cinema projectors. Their new small projector, the NC900C, has been popular throughout Europe with independents with limited booth space. NEC has also recently been focusing on emerging markets such as Russia, Turkey, and Kazakhstan.
Barco, the Belgium-based projector manufacturer, continued its 10-year partnership with the Berlin International Film Festival (Berlinale). The Berlinale, held last February, saw the premiere of Barco’s new DP2K-10Sx projector. Specifically designed for smaller screens, the new projector proved to be a perfect fit for the Berlinale’s small screening rooms.
The new cinema sound formats have also been a topic of high interest with European exhibitors. Dolby has already equipped a worldwide total of 180 screens with its new Atmos format with 39 cinemas in 22 European, Middle Eastern and African countries, and has already released several local-language titles in Atmos. Dolby has also equipped a number of key post-production facilities across Europe to accommodate upcoming projects. Barco has installed its Auro system in a total of 70 installations worldwide and has over 17 films in the pipeline including three European titles and installations in Germany, France, Spain, Demark, Belgium, Croatia, Lebanon and Israel.
Qube Cinema reports that their servers are installed in 500 cinemas across Europe, particularly located in Italy, the Czech Republic, Russia and Portugal. Qube’s latest European screens are using their recently introduced quad 3G IMB that allows 4K uncompressed and DCP ingest via Ethernet without switching or changing boards. Qube also has a large number of post-production facilities using their Qubemaster Pro and related Qube products for mastering.
Last fall, dcinex announced that “35mm,” an independent cinema in Moscow, has converted their second screen into digital as the first in Russia to be financed by the Eurimages Exhibition Support Program. The fund is aimed at giving financial support to exhibitors in Eastern Europe. Eurimages grants a sum of up to 30,000 euros per screen and/or 50% of the purchase and installation costs of the equipment.
AAM and Neva Film, Russia’s leading cinema technology and services company, announced a partnership to sell AAM’s cinema software to exhibitors across Russia. AAM’s software includes their Screenwriter (TMS) currently deployed on over 12,000 screens worldwide, along with Producer, an enterprise TMS designed to monitor and direct an entire cinema circuit from a single application in one location, and AdFuser, software providing cinema-advertising management.
In Estonia, the Tallinn University Baltic Film and Media School became the first Estonian customer for Sony’s new SRX-R515 projector. They upgraded to 4K during the recent refit of their 105-seat SuperNova cinema hall that now gives students a state-of-the-art facility to present their own work.
With the bulk of the world’s cinemas already converted, equipment vendors are now introducing new projectors and servers that are capable of going well beyond the original DCI-developed specifications and at a lower cost. Developments such as higher resolution with 4K, laser illumination, high-frame rates (HFR), better screens for 3D, and a host of new sound formats will always find a willing proving ground in the top-tier flagship screens, where their patrons will pay the premium to show movies in the best way possible.
What remains to be seen, however, is just how large the premium digital upgrade market will become, and if these new presentation technologies will make a meaningful impact on the moviegoing public. With Europe struggling in general and most European exhibitors just now regaining their balance after changing over to digital with various VPF deals, it is simply too soon to talk about large scale upgrades until there is clear box-office justification. While all of these new “beyond-DCI” technologies are worthwhile from the filmmaker’s or industry insider’s point of view, none are yet seen as breakthrough market-movers in the way that 3D changed the industry several years ago. Yet to emerge is the unification and cross-vendor marketing of these technologies in a way that the general public can understand, appreciate and seek out.
It appears that in the major European markets, we are now at the point where the last remaining unconverted exhibitors will have to decide if they will continue with their existing business, or possibly come up with an innovative way to change their model to fit the future. With the world’s cinemas fully converted, counter-trends will likely develop. For example, art houses may be able to survive in the digital world by developing a “film-only” niche by exclusively showing existing 35mm repertoire content.
Although much progress has been made in the past year, Southern Europe is still in a critical position. The lack of readily available financing means that there are still a significant number of screens to convert and there is concern that the expected end of 35mm film distribution will either result in sudden over-demand for equipment or that many exhibitors will simply be forced to close. Either way, the technological gulf between Northern and Southern Europe will likely expand, before we can declare Europe as being done.