For the first time in 2012, 35mm film became the minority cinema format after nearly 90,000 screens became digital worldwide at the end of last year. As a result, cinema has moved from what once was a technology-free zone to one driven by technology, according to the IHS Screen Digest Cinema Intelligence service from information and analytics provider IHS.
The first foray into digital technology in cinemas came with sound, and then indirectly with online ticketing, moving afterward onto cinema advertising, then digital cinema, digital 3-D and the use of social media. Outside of the films themselves, the industry side of the film business is also dealing with issues such as high and variable frame rates (HFR and VFR), 4K image capture, digital archiving, object-based sound, electronic distribution and a wide range of other issues. Cinemas are now at a meeting point of consumer and industrial technologies, and applications and cinema owners will continue to respond to this trend during the year ahead.
Just a scant six years ago, digital cinema was virtually nonexistent with only 5,158 screens worldwide, compared to 108,082 35mm screens. Starting in 2010, ISO-standard digital screens and 3-D screens began to take hold with 12,743 digital 2-D screens and 22,327 3-D screens. But compared to 84,605 35mm screens, digital were still in the minority.
Nonetheless, digital 2-D screens at the end of 2012 had increased to 44,000, with an additional 45,500 in 3-D-as well as 5,500 lower-end e-cinema systems in India-pushing 35mm screens to the minority with just 35,000 remaining.
Change is afoot
This change in film format also meant that 35mm is no longer needed in volume for release prints and image capture, which indicates that the old film format more than likely will die out within three years. Fuji is already phasing out film for production purposes beginning in March, although some professionals still prefer film for the look it gives. Films now are distributed on hard drives, or by satellite or fiber directly to the cinema. The industry will continue to see some major developments in this space in 2013.
For image capture, about 70 percent of high-end films now are shot digitally, generating a huge amount of data for each production-between 2 terabytes and 10 TB a day, and anywhere between 100TB to 1 petabyte over the whole shoot. This data all needs to be stored, processed, secured and transported, creating an entirely new workflow for post-production, as well as a new infrastructure for supporting film productions.
HFR on the agenda
The issue of the moment has to be high frame rates. For "The Hobbit," IHS Screen Digest estimates that approximately 1,200 screens around the world upgraded their technology to play the HFR version-somewhat less than originally envisioned but still a promising start overall.
The jury is still out on whether higher frame rates have any place in cinema, but director Peter Jackson's move in pushing the technology boundaries forward underlines where the cinema industry is heading and how technology will impact the business in the future.
The second part of the Jackson franchise in 2013, as well as the run-up to "Avatar 2," will ensure that high frame rates stay on the agenda.
Laser illumination is also a live issue, potentially offering a low cost of ownership to exhibitors with a light source that can last 30,000 hours compared to an average 1,000 hours for traditional lamps. The technology has several hurdles to overcome, not least the issue of speckle and safety parameters. But a transition is likely to begin, starting with the largest and most profitable screens as well as giant screen theaters. The cost of this technology is currently prohibitive; further research and coordinated development is needed this year in order to offer an economically viable projector for the next generation of digital cinema.
Premium cinema has been around for some time, but it suffered from focusing solely on comfort and extra snacks. Yet technology, too, is having an impact on this area. Exhibitors now have a palette of options to choose from that give the consumer an enhanced "Cinema Experience." Here, HFR, 3-D, object-based sound, Imax, and 4-D are all possible options on top of the enhancements that can be achieved with better seating, mobile ticketing, in-theater dining and so on.
The home cinema environment is also moving forward-with lower-cost wide-screen TVs, cheaper and better surround sound systems, 3-D TV, online downloads at narrower windows, as well as video on demand (VoD). Even so, cinema-now with the armory to raise the bar-can maintain the gap between the home-viewing experience and a movie-going event.
Wider demographics sought
Digitized cinema delivery and projection also allows the exhibitor to program their cinemas more flexibly, as it means no expensive 35mm print is needed, allowing exhibitors to respond to the needs of a wider local demographic with more films. The emergence of alternative content or non-film programming, such as opera, ballet or theater, is widening cinema -viewing options while bringing older people back to the cinema.
The number of events is growing every year. For instance, there were 121 events offered in U.K. cinemas in 2012, up from 109 in 2011 and only 44 in 2010, and further growth in this sector will occur during the years to come, IHS Screen Digest believes.
Cinema on Demand, often using social networking technology, is also taking its first steps as part of what the cinema exhibitor can do-offering groups of motivated customers the chance to influence directly the cinema program. Exhibitors will begin to experiment with the concept this year.
A shot in the arm
Movies in 3-D have provided a shot in the arm to the movie business for several years now, with "Avatar" at the very heart of this trend. As 3-D matures, audiences are also increasingly seeking out the best 3-D experiences, especially as the premium price needs to be justified in value on monetary terms.
Several new technologies are helping to elevate the 3-D experience in theaters to make it more desirable, notably higher-frame-rate 3-D, seen after the release of "The Hobbit." This year the format will be more widely adopted across the globe as theaters decide to invest in advance of the second "Hobbit" movie and James Cameron's HFR "Avatar" follow-up a year later. The development of laser-illuminated projectors as mentioned above, also enables much brighter 3-D presentation, something that audiences are demanding.
As a mature market, the 3-D business has developed its own seasonality with revenues peaking in the summer blockbuster season. This concentration provides space for different genre movies such as "Life of Pi" to impress during the rest of the year. The appetite for reissues of legacy titles in 3-D appears to be waning, but the most revered titles are still likely to make their mark in 2013 and beyond. Meanwhile, the need for creative and original 3-D content continues to grow, and studios will need to work harder to make their 3-D version more compelling than the next one.
International markets, particularly those in developing economies such as China and Latin America, are becoming increasingly significant in terms of the proportion of both 3-D revenues as well as their total box-office contribution. International markets account for more than 70 percent of global 3-D revenue, a trend that continues to rise. In fact, international markets are driving the film business generally, especially in China, which became the second-largest box office market in the world in 2012, overtaking Japan and highlighting the importance of China in the new world order for cinema. From a $100 million market in 2000, China's box office now exceeds $2.5 billion, and new fully digital screens were installed at a rate of over 10 a day during 2012, of which three-quarters are 3-D-equipped.
Ultimately, cinema is about the films. Movies drive people to the cinema, and successful movies are often the difference between a good year and a poor year in a mature cinema market. In 2009 and 2012, both recent good years at the North American box office, "Avatar" and "The Avengers" both grossed well over $600 million. In comparison, the last "Harry Potter" movie in 2011-a weaker year-led the market with less than $400 million.
Clearly, the overall market needs top-grossing films to thrive. This year's yet-to-unfold biggest offerings, such as "The Hunger Games: Catching Fire," "The Hobbit: Desolation of Smaug," "Man of Steel," "Oblivion" and "Pacific Rim," will all be hoping to catch the public's attention, vying for honors to be "the film" that makes this year a good one for the movies.
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