PVR cinemas and INOX, the two leading multiplex circuits in India, have both agreed to install the potentially disruptive Cinema LED display technology branded as ONYX from Samsung later in 2018.

PVR cinemas and INOX, the two leading multiplex circuits in India, have both agreed to install the potentially disruptive Cinema LED display technology branded as ONYX from Samsung later in 2018.  The deals form part of Samsung India’s goal to reach 10 Onyx Cinema LED screens in India by end 2018 and forming part of a wider and more ambitious target to reach around 2,000 total screens in the territory by 2020.  As a result, India joins select territories of Thailand, China, Switzerland, South Korea and USA to adopt LED cinema technology and to date the largest base of proposed LED screens.

PVR will initially launch the ONYX Cinema LED screens in two of its sites in PVR Icon, New Delhi and PVR Phoenix, Mumbai, based on a reported cost range of Rs 85-95 million per screen. In a bid to recoup costs as well as benchmark the premium experience, PVR plans to increase ticket pricing at these screens in the region of Rs100-150 above regularly priced tickets. It will also reportedly look at sponsorship as another option, in a similar vain to its existing sponsorship of IMAX screens. PVR will install a total of five ONYX LED screens over the next 15-18 months, marking one of the first bulk deals of the technology within a circuit.  PVR is the largest circuit in India with 625 screens across 134 sites. While Inox is second ranked with a total of 496 screens, it has ambitious plans to add 700 incremental screens over the next five years. There are fewer details about the deal with INOX such as the number of screens to be installed. Nonetheless, the commitment by PVR is the largest of a single operator to date after test sites (albeit in commercial cinemas) in China with Wanda Cinemas, South Korea with Lotte Cinemas (2), Thailand with Paragorn Cineplex and Switzerland with Arena Cinemas. The most recent installation was in California with Pacific Theatres in the USA in April 2018.

The recently branded ONYX Cinema LED screen from Samsung comprises three main technology elements in ONYX View (4K, HDR), ONYX 3D and ONYX sound. The ONYX surround sound is configured with technology from JBL by Harman International and Samsung’s own Audio Lab. The technology is also reportedly compatible with Dolby Atmos. The total life span of the LED screen is earmarked at 17 years plus forgoing the lamp replacement cycle required by standard d-cinema projectors. The ONYX screen also has full DCI certification and will come in a variety of screen sizes.  Samsung is currently focused on screens of 34ft (10.36m) but will launch a 46ft (14.0m) model later in 2018 and is also reportedly looking to expand its range of sizing.

Our analysis

In a direct focus on the Indian exhibition market, Samsung has stated an ambitious goal to reach 20% of the roughly 10,000 screens in the territory over the next two years (end 2020). Although the company has signed multiple screens with the two leading exhibitors, to achieve this, would require PVR, INOX and any other operators to substantially up their targets for installs from 2019 onwards. Samsung had previously stated that it intended to install 30 Cinema LED screens worldwide by end 2018 although IHS Markit understands this target has since risen, with the change in scale likely linked to recent progress in India as well as other feedback.

The Indian theatrical market is an interesting prospect for Samsung in that the territory has traditionally adopted its own standards in e-cinema which still accounts for the majority of screens (60%) and has yet to upgrade to d-cinema. However, India is also primed for rapid expansion with multiplex operators targeting huge incremental screen growth and a desire to adopt as well as set premium technology standards.  PVR’s proposed strategy to adopt incremental pricing around LED and look at sponsorship, if successful, could open up the market further, although such initiatives may be more focused on short term scenarios.

The disruptive influence of being a projection-less technology coupled with the high costs in the region of $500,000 to $800,000 per screen could ward off potential exhibition partners (at least initially) and in India certainly exclude smaller and more geographically diverse e-cinema type venues. More generally, the sound element has also been under scrutiny but this has been newly configured by Harman International for the most recent installation in Pacific Theatres; positioned directly above the screen and incorporating filtering technology to make the sound appear as if it was coming from behind the screen plus an additional speaker in front that also bounces sound of the screen and into the audience.

One of the primary attributes of Cinema LED screens is their ability to dramatically increase brightness and maintain uniformity with a peak rate of around 300 nits or 88ft lamberts compared with a standard d-cinema projector at 14ft lamberts. Samsung’s screen does require a different version of the content to display at HDR quality (although can also project at standard rates), which does add to the complexity at the distribution level. However, the brighter screen could also be used in environments which would benefit from ambient light including dine in or VIP cinemas. In India, PVR has a range of gold class cinemas with dining options which could be suitable candidates for upgrade.  

Nonetheless, the advent of Cinema LED comes at a pivotal time for the exhibition industry as the market for replacement of first generation projectors is gaining traction and the investment in premium cinema exhibition, including PLF and RGB laser ,proliferating. On the 3D side, Arena Cinemas was the first to install an 3D ONYX screen and for 3D content - LED is just one of the options for projecting (or displaying) brighter 3D images.

Ultimately, aiming to capture 20% of the Indian market by 2020 seems optimistic solely based on benchmarking the historic growth of d-cinema in the territory.  But if the technology proves to be a game-changer a faster transition period could be observed in a similar pattern to 3D driving the initial digital conversion. It may be too early to be able to project the longer-term adoption rate of LED Cinema but the next 12 months (LED cinema launched in August 2017) will provide a clearer indication of its position in a more complex market for advanced displays in cinemas.