In 2011, Asia (and in particular China) continues to lead the global market with digital conversions being driven by a boom in new cinema construction as well as the ongoing retrofit of existing cinemas. Currently, the Asia region has approximately 7,000 digital screens. China alone has around 3,000 new screens either planned or under construction. China, India, Thailand and other Southeast Asian countries are the most rapidly expanding cinema markets.
Hong Kong server manufacturer GDC Technology was recently acquired by a consortium led by the Carlyle Group, a global investment fund. GDC, founded by Dr. Man-Nang Chong in Hong Kong 12 years ago, has around 11,000 of its servers installed worldwide and manages the Hollywood-driven VPF (virtual print fee) conversion incentives throughout Asia. In October, the Carlyle-led consortium acquired nearly an 80% stake in GDC. Carlyle’s investment is not only a vote of confidence in GDC, but underscores the potential of further growth across the Asian cinema markets.
Emerging Asian cinema markets such as China are experiencing rapid growth, with the initial adoption of new digital technologies outpacing the rate of digital conversions in established cinema markets. China’s current cinema digitalization is approaching 70%. GDC is China’s largest digital-cinema server provider with more than 4,500 installed servers representing a 54% market share. GDC’s customers include China mainland’s top 10 circuits, including recent major commitments from Stellar International Cineplex, Jinyi Zhujiang, Zhe Jiang Time, and many others.
Also on the move in China is Barco, the Belgium-based DLP Cinema projector manufacturer. As of mid-2011, there were more than 5,000 Barco digital-cinema projectors installed in mainland China out of their global installation base of more than 20,000 projectors. Last year, Barco set up a digital projector research center in Beijing, becoming the first foreign projector manufacturer to establish a research center in China. Barco’s Beijing factory is producing approximately 500 projectors a month.
Barco has recently reorganized its Chinese cinema group by partnering with the government-led China Film Equipment Co. Ltd., a subsidiary of China Film Group. The new company, known as CFG Barco Electronics Co. Ltd., is a joint venture of two Barco subsidiaries—Barco Visual Electronics Company Ltd. and Barco China Holdings Ltd. This venture illustrates Barco's and China Film Group's commitment to develop China's digital-cinema industry by strengthening the development and production of digital-cinema products and services in China.
NEC Display Solutions, Ltd. (NEC), the Tokyo-based DLP Cinema projector manufacturer, is also focusing its Asian strategy on China as the first priority, then Australia, South Korea and the remaining Asian countries. NEC has recently installed their projectors with exhibitors Guangzhou Jinyi, Golden Harvest, Guangdong Dadi in China and Galaxy Resort & Casino in Macau. NEC’s U.S. and Hong Kong-based reseller and systems-integration partner Ballantyne Strong, Inc. was selected to provide 150 NEC projection systems to Beijing Yida Jiuzhou Film, a newly launched exhibition company, and 100 projection systems to The Jinyi Group. Approximately 50 of the systems were shipped in 2010, and the balance completed in 2011.
In mainland China, NEC has appointed Beijing Donview Digital Technology Co., Ltd. as their second distributor in addition to Strong Westrex to enhance their sales and support network. NEC plans to broaden their sales coverage from top-ranking theatres to include mid-sized to small theatres, and targets having more than 2,000 systems installed in Asia by the spring of 2012.
Christie, the California-based projector manufacturer, is working with global real estate company Shimao Group on deployments across China. Operating from their headquarters near Shanghai, Shimao has been forging a leading position in the cinema exhibition sector. Last December, Shimao installed 50 Christie projectors in the circuit’s theatres in China during their phase-one deployment, and plans for the next phase call for another 200 projectors. In addition, Wanda Cinema, the largest exhibitor in China, has signed with Christie for 350 projectors and with Doremi, the world’s leading server provider, for the servers to be used in the next phase of their deployment.
Dolby has also seen progress for its Dolby Digital Cinema solution in mainland China, as well as Hong Kong and Taiwan. As of October 2011, more than 2,600 Dolby Screen Servers have been shipped in the region. Key customers include the China Film Group, Shanghai Film Group, Wanda, Dadi and Shimao in China, MCL in Hong Kong, and Showtime in Taiwan.
In addition, there are currently over 1,200 Dolby 3D systems and approximately 500 Dolby Surround 7.1 screens installed in Asia. Dolby’s key 3D successes have been with Japanese distributors such as Paramount and Disney, and with Gaga, one of the leading exhibitor chains. Dolby Surround 7.1 continues to see momentum in China and India with additional titles being released. In China, Legend of the Fist: the Return of Chenzhen, The Lost Bladesman and Lee’s Adventure have been released in Dolby Surround 7.1. In India, three titles, Dum Maro Dum, Bodyguard and RA One, have been released in Dolby Surround 7.1.
MasterImage 3D, a provider of 3D solutions, announced in June that Tokyo’s Toho Cinemas, the largest multiplex operator in Japan, with 58 cinemas with over 520 screens, selected them for their 3D systems across Japan. MasterImage 3D’s reseller, Xebex, is responsible for the installation and maintenance services. Over the past year, MasterImage 3D has experienced significant Asian market growth with systems installed in over 70 countries worldwide and partnerships with prominent Asian market exhibitors such as Korea’s CJ CGV, India’s BIG Cinemas, Australia’s Golden Village and Japan’s 109 Cinemas plus Toho.
In Korea, Digital Cinema Korea (DCK), a consortium created by major exhibitors CJ CG and Lotte Cinema, continues its country-wide deployments with over 1,000 digital screens already installed. While the majority of mainstream multiplexes have been converted to digital, at issue—as in so many other markets—is the large number of independents who have yet to change over. DCK expects to install another 100 screens before the end of 2011.
In Thailand, the SF Cinema Group (SF) recently joined forces with Sony to launch the country’s first 4K projection systems. SF has been showing digital features in Thailand since 2003, and has adopted ever-new technology starting with 2K digital and 3D and now continues with the addition of Sony’s 4K technology. The implementation of Sony’s 4K solutions at SF Cinema adds to the 10,000 units of Sony 4K systems installed worldwide. In addition, Sony’s PCL division is working with SF in providing streaming alternative-content events such as “AKB48 The 24th Single Janken Tournament,” which was streamed live from Japan to SF’s flagship World Cinema as well as to cinemas in four other Asian countries.
Also in Thailand, NEC recently completed installations with Major Cineplex and appointed the Goldenduck Group a distributor for Thailand, Malaysia and the Philippines. For those emerging markets, NEC plans to install several hundred projectors in 2012.
In the Philippines, the Dcinema Alliance Corp (DAC) awarded Doremi a contract to supply a minimum of 300 of their servers. DAC represents the key exhibitors in the Philippines as well as Hollywood VPF agreements for the country.
Qube Cinema, originating from Chennai, India, has their servers installed in about 5,000 screens across 33 countries around the globe. In India, their Qube Cinema Network serves over 2,500 screens across the country and encodes around 20 features per week, in all Indian languages from three mastering facilities in India.
Typically, over 7,500 KDMs are distributed and managed by Qube’s central network on a weekly basis. During the recent Diwali festival, Bollywood blockbuster RA One was distributed on the Qube network to 6,500 licenses in both 3D and 2D. Of these, 1,450 were mastered in just 72 hours in 28 versions, in Hindi, Telugu and Tamil dubs with subtitles in English, Dutch, Malay, Arabic and Bahasa in India, without any compromise in quality or security. Qube Cinema was the only one to make it successfully to the first-day first show, Oct. 26 at 8 a.m., in 3D and 2D, in DCI and E-cinema, in India and across the globe.
UFO Moviez, known primarily as a provider of e-cinema systems with an installed base of over 2,500 screens, recently took a majority stake in Scrabble Entertainment, the only DCI-level aggregator in India. Scrabble has been deploying DCI-grade equipment and managing Hollywood VPF incentives in India and the Middle East. Scrabble plans to install up to 2,000 DCI screens throughout India, the Middle East and Latin America in the next two years. Doremi will deploy 200 servers in the Middle East before the end of 2011 as the primary supplier of servers and Integrated Media Blocks for the Scrabble deployment.