Market Insight

Samsung makes no-projection cinema a reality with LED screen

July 18, 2017

Pablo Carrera Pablo Carrera Principal Research Analyst, Cinema
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South Korean Electronics conglomerate Samsung Electronics has announced the first ever commercial cinema LED screen installed at Lotte’s Cinema World Tower in Seoul, South Korea. Samsung’s LED screen had been presented to the industry at CinemaCon in Las Vegas only in March this year and obtained DCI compliance in May.

The 96 LED cabinets’ screen is 10.3m. (33.8ft.) wide and it has been installed with an audio system from JBL by Harman, of which Samsung completed acquisition in March this year. It can display content at 4K resolution (4,096 x 2,160) at brightness levels of 146 foot-lambert and it has HDR capacity, but does not currently support 3D (Samsung is working on it). The first two films to be screened will be Cars 3 and Spider-Man: Homecoming.

Samsung is targeting US and Korea at this stage. It in talks with a number of exhibitors in the US and plans a pilot screen there by late 3Q17/early 4Q17. And Lotte also intends to install more LED screens. In addition to traditional cinema showing, Samsung will be targeting other uses such as corporate events, concerts and gaming competitions thanks to the screen’s ability to show pictures in ambient lighting conditions. 

Sony also showed its LED screen suited for commercial cinemas (although as an unfinished product) in CinemaCon in March, and later in April HSI Immersive launched an LED screen specifically targeted at 3D in cinema, known as Havavision 3D LED. None of them has yet reported obtaining DCI compliance.


Our analysis

Since Samsung announced that its LED screen had obtained DCI compliance in May it was a matter of time for the first commercial cinema to be equipped with one. LED has become a reality in cinemas. In that regard, it is a commercial breakthrough that a technology untested in cinemas has been selected for the flagship theatre of the second largest circuit in South Korea – which also hosts the largest screen in the world, of 34m.

These news also mean that there is another product available for exhibitors to choose for their next cycle of digital projectors replacement: LED screens are on offer next to Xenon, UHP mercury, laser phosphor and RGB laser solutions. In particular, its 4K capability (or 8k if scaled up) would make it a direct competitor of a handful of models, of which there are around 950 installed every six months according to IHS Markit data (excluding RGB laser). Likewise, its HDR capability makes it a competitor of Dolby Vision and IMAX laser projectors, as well as EclairColour solution.

That is, if a sensible business case underpins the proposition.

This is something Samsung and Lotte have not addressed in their announcement. The cost of the screen and the terms of the deal have not been disclosed so there remains to be seen how the economics work. As a reference, Sony’s LED screen reportedly last up to 85,000 hours at up to 50% brightness, equivalent to around 25 years of use. Although a long time to amortise a product is helpful, it is unlikely a business will get finance for a technology for that long when most business cases are based on 10-15 years (beyond that point the technology risks becoming obsolete).

There are two key factors that will impact cost: size and resolution. Samsung’s LED solution is modular and is reportedly being offered in three versions: Lotte’s 4K screen of 10m. (33.8 ft); 2K screen of around 5m. (~17 ft) for post-production purposes; and a 8K solution of 20m (68 ft) for PLF. GDC’s new PLF solution, JETREEL, has announced it will use Samsung’s LED screen as part of its offer. The larger the screen, the more modules required (in fact, the surface increases exponentially) and thereby the higher the cost.

A similar impact will have the resolution. Although Samsung has not disclosed it in this case, it is in direct relation with the viewing distance and for that reason it is expected to be lower than that of a LED domestic TV. Likewise, it could be even lower in the 20m. screens than in Lotte’s example given that the former are watched from a larger distance in big auditoriums. This could help compensate the larger cost in number of modules due to the exponential increase in the screen’s surface.

Finally, from an experiential point of view eye comfort is a key factor for the adoption of LED screens in cinemas. It is linked to the level of brightness and contrast, which become more prominent in rooms with low ambient brightness such as cinemas. The technology will probably need further iterations to prove its suitability for large adoptions.

Assuming that hurdle is overcome and costs go down as the technology improves, projectors will not be replaced en masse with LED technology from one day to the next. We can use the penetration of Laser as a comparative, as it is the previous new technology that brought significant improvements in image quality as well as savings in maintenance costs. According to IHS Markit data, it has taken RGB Laser projectors 3 full years to reach 384 units worldwide, a mere 0.25% of the total digital screen base. Although the product is targeted mainly for large screens, there are various manufacturers and models in the market which help its penetration. As for laser phosphor, there were an estimated 5,000 or 3% of them at the end of 2016, again a low figure. Being LED a much newer technology that also has an impact in how cinema is perceived, turning it into a projector-less experience, it is expected that the technology will take longer to spread.

There is also no detail in the announcement about how Harman has overcome the limitation of lack of speakers behind the screen -used in traditional cinema screens, with the sound travelling through micro holes. Cinemagoers will be the best ones to judge their solution and we will be looking forward to that feedback.

All in all, and whilst Samsung will have to earn credibility through the quality of its products in the medium term, this historic installation gives it a first mover advantage in a completely new market and it is thereby well positioned to seize the opportunity

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