Market Insight

Kinepolis selects laser for start of replacement wave with Cinionic/Barco

June 20, 2018

Charlotte Jones Charlotte Jones Associate Director – Research and Analysis, Cinema, IHS Markit

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Kinepolis has earmarked the start of its replacement schedule of first-generation digital projectors to laser technology in a deal with Cinionic/Barco for 300 laser systems over the next three years. The deal includes both new and existing screens in its European territories such as Belgium, France, Netherlands and Spain as well as its more recent acquisition of Landmark Cinemas of Canada.

Kinepolis has long been a pioneer of new technologies and innovations including being one of the first European exhibitors to install laser technology and the first to pioneer an all-laser multiplex in the region in Breda, Netherlands back in 2016. Kinepolis now operates a total of four all-laser multiplexes (harnessing a mixture of both RGB and laser phosphor) with a further two to open later in H1 2018, thereby clocking up substantial experience of the benefits of both RGB laser plus all-laser venue set-ups.

Kinepolis has around 799 screens spread across its screen portfolio in Europe and Canada, and the deal would go some way to ensuring a proportion approaching half of its screens are laser by 2021, considering it already has a number of screens, including entire cinemas as laser.

Our analysis

The deal, in theory, provides a schedule for the start of the replacement of existing first-generation digital projectors that are either coming to the end of their useful life or where a higher spec projector is required by 2021. The deal, however, also incorporates new build screens which could ultimately account for a good proportion of the 300 -screen deal. The deal follows a similar announcement by Cineworld for 600 laser projectors, also with Barco, over the next few years, and again including both new and existing screens (or replacements). The deals show that for replacements, laser provides a strong rationale to upgrade for enhanced performance measures such as brighter projection, higher contrast ratios and HDR.

The replacement wave of existing digital projectors has yet to materialise on a large scale to date in 2018, certainly in Europe, with only select activity taking place or where exhibitors have adopted new technologies such as for PLF screens. Kinepolis, as a pioneer (alongside others who have announced commitment such as Cineworld), could help kickstart a wider transition in the region as well as globally based on these imposed timescales. Although this could still be a few years off. As Kinepolis was one of the early European exhibitors to go digital, the natural replacement cycle of the wider industry, based on number of years installed, could ultimately come to fruition on a more gradual timescale. The deal should be seen as significant in driving benchmarks for European exhibitors higher, and the significance here is the selection of laser (a mixture of RGB and phosphor) to be the default standard for replacement technology. But without a secondary financial support mechanism, as was the VPF for the first wave of digitisation, the economics in the cost/benefit scenario will remain a critical factor in this decision-making process. The advent of LED screens in cinemas provides yet a more complex range of options for upgrades but this may not be suitable, as yet, for all screen types.  Financial models are being looked at by all projector manufacturers, including leasing.

 

Organization
Barco Cineworld Kinepolis
Research by Market
Media & Advertising
Category
Cinema
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