Friday, 3 November 2017

Is cinema losing the war on innovation?

Screen International
p30 November issue

While cinemas initially forged the way new players and exhibitor caution are creating a gap in visual display quality between theatrical and home entertainment.

The cinema industry has consistently managed to innovate the viewing experience ahead of home entertainment but there are signs that this may be stalling. Having introduced projectors capable of playing back content at 4K resolution nearly a decade ahead of TV in 2007, exhibition is on the verge of being leapfrogged by consumer technology.

The number of installed 4K projectors is 27,500, which comprises just 17% of total screens worldwide. Sony took the lead in supporting 4K with its vertically integrated business, which spans content to hardware (projectors, cameras, TVs). Globally, its fleet of roughly 17,000 projectors are 4K compliant. Just 10% of projectors sold by Barco, Christie and NEC are 4K. The highest penetration of such screens are in Thailand (35%), the U.S (40%) and Estonia (52% - of a small total base). In the UK, 32% of screens are 4K [all figs IHS Markit].

“4K has not become the dominant format as many in the industry hoped,” says David Hancock Director, Film and Cinema at IHS Markit.  “There’s been a lack of momentum needed for all productions to go to 4K.”

“Ten years ago, 4K became a buzzword, an added feature– some would say a marketing device – to convince exhibitors to buy 4K instead of 2K projectors but even now, we are seeing only 20% of content released by the studios in 4K,” says Brian Claypool, VP of Product Management for Global Cinema, Christie.

Post production cost

One inhibitor is cost. Production processes can be computationally expensive because of the greater data needing to be transferred, stored and manipulated at every stage.

“This also comes with an increase in artist cost due to the extra detail required,” explains Graham Jack, CTO, Double Negative. “Having the extra resolution available in VFX is often useful, as we may need to zoom in or process the image in some way, but dealing with higher resolutions increases demand on resources.”

Consequently, while more films are being captured using cameras capable of 4K resolution, the majority of films continue to be released in a lower 2K resolution, the equivalent of HD television. Of the 800 titles released in the UK last year only 34 (including Allied, Bad Santa 2) are listed by Sony as being natively produced and delivered with a 4K Digital Cinema Package. Six of those were re-releases of classics remastered to 4K (e.g Kurasawa’s Ran). This year, just nine films are listed (by Sony) with a 4K DCP (including Dunkirk; Kingsman: Golden Circle).

Most other titles screened with a 4K projector are upscaled in postproduction, a process which adds pixels into the picture, although Vue CEO Tim Richards, who has invested heavily in Sony 4K projection, says even movies upscaled in this way “while not 4K will be way better than 2K”Some cinema owners report frustration about having to play 2K movies on 4K screens. “Even most bigger blockbusters are often delivered in 2K,” says Jan Petersen, CTO at Nordisk Film Cinemas. It operates 26 4K screens in Denmark and another 42 in Norway out of a 232 total. “We would like to see more 4K mastered content especially on bigger screens where pixilation can be visible in 2K.”

Owners of independent and boutique screens as much as the mega-chains voice similar concerns, admits Oliver Pasch, Sales Director, Sony Digital Cinema 4K. “We’re at the point now where consumers can pick up a 4K television for a few hundred Euros. And we’ve got fantastic 4K content coming [to the home] from the likes of Netflix and Amazon. As a cinema owner, it’s getting harder to justify charging your customers for anything less than a genuine 4K big-screen experience.”

Although second and third generation 2K projection models can be upgraded to 4K, cinema owners remain unconvinced of the value of the higher resolution alone. Unlike 3D, immersive audio, dynamic or luxury seating exhibitors have not charged consumers a higher ticket price to see films in 4K alone. 4K is more likely to be incorporated into the wider Premium Large Format offer.

“When you blow a 4K picture up you will see a profound difference,” says Richards. “On a bigger screen the 4K image is simply better.”

Better on a large screen

 “We would absolutely like to offer guests more 4K content in our I-Sense auditoriums,” says Mike Bradbury, Odeon Cinemas, Group Head of Sound & Projection. Odeon operates 16 4K projectors in the UK and Ireland that are mostly housed in its I-Sense branded PLF. This will rise to 18 by the end of November out of a total screen base of 942. “The larger the screen, the more 4K is required due to the inevitable pixels enlargement and we would like to ensure definition is maintained.”

The slow adoption of 4K content distribution is compounded by the higher cost of producing 4K DCPs. Furthermore, all 3D screenings are in 2K resolution as there is no 4K 3D standard in digital cinema. This may explain why, in the year to June 2017, of the top 20 films globally (by revenue) 80% were post-produced in 4K, but only two were given a 4K cinema release (source: Futuresource).

However, the minimal perceptual gain offered by the leap in resolution cannot be ignored.

In promoting its projectors, Sony boasts of the “life like detail and rich vivid colour” of 4K which “comes close to the limits of human vision” yet there’s little evidence consumers are aware – or care - if the theatrical content is 2K or 4K.

“There is a visible difference based on viewing distance (the closer to the screen, the better the visual image) but we don’t feel there is room for a price increase based solely on 4K,” says Petersen.

What makes greater visual impact, it is commonly agreed, is higher brightness and greater aesthetic contrast ratios between the dark and light areas of a picture (known as High Dynamic Range).

HDR makes the difference

“Resolution is important but HDR is probably of bigger importance,” Bradbury says.

“4K is a ‘must have’ because movies will eventually shift to 4K but the reality is that moviegoers may not notice how different the image is,” says Jean Mizrahi, president and CEO, Ymagis Group. “The real challenge is not 4K versus 2K, but HDR versus SDR (standard dynamic range). The audience sees the difference when a movie is projected HDR.”

Yet HDR is in a fraction of venues. Market leader Dolby has installed less than 100 HDR-enabled Dolby Cinema screens worldwide – whereas HDR is becoming as defacto in TV displays as 4K.

“Amazon, Netflix, Hulu, HBO are currently making big investments in sourcing HDR content,” says Mizrahi. “This is a key issue for the cinema business.”

While Hancock says there’s no evidence that people are deserting cinema because of a better home experience, “if cinema does stay at 2K then this could yet become an issue,” he warns. “Cinema has been the driver of quality, where breakthrough technology has made the big screen the ultimate viewing experience. We are now seeing these developments happening in other areas.”

“The streaming providers [Netflix, Amazon] have been more aggressive than traditional studios in terms of demand for mastering content at higher than 2K,” says Sherri Potter, svp, Head of Worldwide Post Production Services, Technicolor.

What’s more, the gap between image capture and end display is widening. A new range of cine cameras from Red and Sony are capable of recording 8K pictures (16 times HD). Cinematographers argue that footage shot at this extreme resolution is likely to deliver a richer final picture even when downscaled to 2K for delivery.

According to Futuresource, studios are more likely to acquire at higher resolutions, especially for CGI-heavy titles, for sale as a 4K product to the higher value home market (of last year’s top 20 revenue earners 4 were given a 4K packaged media release, marginally more than for theatrical presentation alone)

The first feature to be largely recorded in 8K, Guardians of the Galaxy Vol 2, was ultimately postproduced and delivered to cinemas in 2K. It’s Disney’s first 4K UHD Blu Ray.

A solution to cinema’s projection bottleneck ironically could emerge from consumer technology. LED screens are being commercialised for theatrical markets by Samsung (with Sony to follow) for theatrical markets. These Direct View or Emissive displays can be configured to any size and promise greater contrast ratios and brightness superior to any projection technology with resolutions up to 16K if desired.

“If ROI [on cinema LED] reaches an affordable level within 3-5 years they are a very good candidate for projector replacement and probably sooner for new builds,” informs Chris Chinnock, founder of analyst Insight Media. “The emissive cinema screen market is so needed to offer image quality with a huge screen format on par or better than the home experience.”

What is 4K?

A 4K Digital Cinema image has a resolution of 4096 x 2160 pixels (4000 horizontal lines) compared to 2K 2048×1080. Since the pixel count increases with the square of the resolution, 4K is four times as computationally expensive as 2K (and 8K is 16 times), according to facility Dneg.

35mm film is considered to have a digital resolution equivalent to 4K. 35mm IMAX film to equate to 6K, while 70mm IMAX is closer to 12K. Regardless of how it is shot, most films will be converted into a digital format for editing, colour grading and vfx (called Digital Intermediate and usually at 2K resolution). While some films are scaled back up to a digital or film print for distribution even IMAX projection systems are not capable of playing back higher than 4K.

Home entertainment 4K Status
The 4K home market emerged with the standardisation of the UHD format in 2012. By the end of 2017 there will be 174 million 4K (UHD) TVs globally, equivalent to 8% penetration (the UK is reckoned to be at 10%). By 2021 that’s expected to reach 32% (figs: Futuresource Consulting) as new displays incorporate 4K as standard.

4K home content (VOD or live sports channels) are sold at a premium through subscription services like Netflix or payTV like Sky Q.

More studio content is mastered in 4K for the home than is projected in cinemas because of the higher value of 4K home content and because Netflix and Amazon are commissioning and distributing 4K TV series. This content is supplemented by 4K live streams (primarily sports). However, there are also bottlenecks in delivery holding back 4K distribution.

“Broadcasters have bandwidth constraints as well as a limited, albeit growing addressable market of 4K TV owners which means that adding a number of UHD channels wouldn’t have a ROI,” says Futuresource analyst Tristan Veale. “Streamed 4K is the most prevalent method, however consumers object to paying extra for UHD content when their slow broadband means they are not receiving a 4K stream for the duration [of the streamed content].”

According to Ampere Analysis, the most effective commercial way of getting studio 4K content into homes is physical media. The 4K Blu-ray Disc (BD) is niche even within the Blu-ray market and likely to remain so for the foreseeable future, it states.

Over 110 70 titles were released in the format in 2016 - its launch year with 90 more expected to have been released by end 2017 (Blu-ray Disc Association). It’s a significant increase but a rate of release that places BD UHD way behind BD at a similar period after the format’s launch, according to Ampere.

It is worth noting that Japan begins broadcasting in 8K domestically from 2018 but few analysts think this extreme resolution will migrate to other countries any time soon.

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