From WeChat Public: ID:EW-Entertainment, the article was honed by the East-West Film Research Group on the basis of foreign media reports and previous studies by: Hedy Cao,Jocelyn Jin.
Streaming media companies, such as Netflix,Amazon, are running out of customer time, causing a huge impact on the traditional cinema industry. As one of the strategies of differentiated management, the screen may become one of the hot spots in the streaming media era. We've already focused on IMAX, the number one player in the Big screen Market. (link: IMAX: not just the Big New Cinema series). This time we chose to focus on "Novice"-(Dolby Cinema). At the Dolby Theater.
Like IMAX, Dolby, which is also a technology stream, has long been reluctant to focus on the vertical vertical field of sound effects, but turned to the cinema's overall solution.
According to Duby's latest Q3 figures, the total number of signed theaters has reached more than 390. That figure, though unmatched by IMAX, has really boosted a certain share of the huge screen market and substantially boosted Dolby's revenue growth to a much larger scale.
Whether it's IMAX or Dolby, the inspiration of these technology-based companies is that they have been settling for nearly half a century before. In an era when business legends are more likely to attract apprentices, " accumulation" is still not an easy way to discard business knowledge.
There are too many myths. Looking back, there are only so many that can cross the century.
First, Dolby history speed reading: from sound to cinema industry
1. The King in the Field of Sound noise reduction and consumption
Dr. Ray Dolby, founder of Dolby, worked at Ampex. There, he was a member of the six-person team that developed the first video tape recorder in 1956.
In 1964, during his tenure at UNESCO, Ray Dolby visited a dojo in India, when Dr. Dolby used a roll of Ampex tape (produced by Ampax, USA) to record the sitta music. He was troubled by the buzz on the tape. Under this opportunity, Dolby developed his eponymous noise reduction process (NR) and returned to London in 1965 to establish the Dolby Laboratories.
In the early days, Dolby accumulated some wealth by collecting a small amount of authorized income from equipment companies. Through continuous technical iteration and extension of technical application fields, Dolby entered the mass consumer goods market. Later, Dolby used Dolby's surround sound system to enter the home video market.
By 1982, the company received a license fee of 6 million US dollars from about 125 audio equipment manufacturers each year. Nearly all pre-recorded tapes will use Dolby's technology, and Dolby has maintained a near monopoly in noise reduction consumption due to the coverage of about 70 million different consumer goods.
2. In-depth film sound field
The film is another important scene in which Dolby takes advantage of technology.
In the early days, Dolby mainly provided recording and noise reduction technology during the filming period. Later, Dolby also participated in the post-production of audio tracks, providing technical and service support to create the best environment for playing these tracks, ensuring that the film can follow the film. The director’s original idea was to show.
Kubrick's Clockwork Orange (1971) is the first film to use Dolby noise reduction technology.
In the 1970s, the digitalization process entered the field of music recording. Faced with the potential threat of Dolby noise reduction technology as an outdated product, Dolby has developed a diverse range of products to expand its business into cinema sound systems.
In 1975, Dolby Stereo was introduced by Dolby Company, but the technology did not immediately become popular at that time, mainly because there were not enough cinemas to install Dolby Stereo. With the advent of Star Wars in 1977, the film's great success and its groundbreaking use of sound helped Dolby's new system become a new standard for cinemas.
In the 1990s, Dolby developed a digital surround sound compression scheme for movies: Dolby digital technology (Dolby Digital). The technology was first used in Batman return (1992).
With the advent of high-definition video formats such as Blu-ray in 2000, new audio standards have emerged. Although Dolby's HD audio format can still be used on Blu-ray media, its main competitor DTS's HD audio format is also available. Was included in the Blu-ray Disc. This means that Dolby no longer enjoys monopoly pricing for its main business (home entertainment industry).
At the same time, due to factors such as digital piracy, video - on - demand, economic slowdown and the introduction of high-definition media, DVD sales have declined as a whole, consumer spending has also declined, Dolby's operation has been challenged, and various external factors have pushed him to think about opportunities in the industry, so the strategy for cinema scenes has become increasingly clear.
3. From the movie sound field to the cinema business
In June 2010, Dolby launched the Dolby 7.1 surround sound (Dolby Surround 7.1) and established a worldwide partnership with cinemas to launch the Dolby Hall with 7.1 surround speakers. In order to speed up the layout of theater business, Dolby in 2011 appointed two Doug Darrow and Sid Ganis executives.
Sid Ganis is a strategic advisor to his cinema business. Ganis has worked in Sony Pictures Entertainment and has served as president of global marketing for Columbia Samsung, vice chairman of Columbia Film Company and president of marketing and distribution for Columbia Film Company. Sid Ganis is the key figure for Dolby to go to the cinema. He advises senior management on creativity, production and cinema business, and introduces relevant talents, thus laying a good foundation for Dolby's cinema launch.
Doug Darrow, senior vice president of the company's cinema business, is responsible for developing and implementing the strategy of Dolby's cinema technology platform. He worked in Texas Instruments for 24 years, mainly responsible for the development and marketing of DLP Cinema, helping to lead the industry's transition to digital distribution by deploying digital film projectors and 3D technology.
In April 2012, under the leadership of Doug Darrow, Dolby launched Dolby Atmos, an immersive audio solution that received numerous awards in the future. This is an improvement and upgrade to Dolby 7.1 surround sound. The sound from the top of the head achieves a full range of sound layouts in the cinema.
According to Dolby official data, the solution has been deployed on more than 4,000 box office screens in more than 60 countries and has been used in more than 1,000 movies. At this time, Dolby was more competitive in the cinema business, paving the way for building its own giant screen brand.
Before officially entering the cinema business, Dolby has tried to penetrate into the field of image technology across the field of sound effects.
Dolby Contrast technology was introduced by Dolby as early as CES in 2008 to enhance the contrast of LCD screen through local dimming.
At the 2009 CES exhibition, Dolby was shown off with a prototype that uses the Dolby Horizon technology and announced that it would be available in the first quarter of 2009. However, it may be that technology and timing are premature, and that these two image enhancement technologies were not on the market on a large scale at the time. Until December 2014, Dolby announced that it was working with (Christie), an expert in the field of projection systems, to develop the Dolby horizon (Dolby Vision) projection system, and announced that it would build a giant screen brand, the Dobby Cinema (Dolby Cinema).
Dolby Cinema is a complete set of elaborate solutions designed for theater scenes, including the Dolby Horizon, Dolby panorama, and a full set of studio designs, as can be seen from Dolby's promotional materials.
The world's first Dolby Cinema officially opened in December 2015.
Second, Dolby Cinema keyword: complete immersion, old customer transformation
Although Dolby is the leading company in the field of film sound, it is only three years into the giant screen, compared with the current screen scale of IMAX 1400, a veteran player. Duby believes that their success in this area depends on their ability to differentiate their products, that is, differentiation.
Unlike the ultimate entertainment experience created by IMAX, Dolby's brand philosophy focuses on the “complete cinema experience”. This complete cinematic experience is reflected in Dolby's day-to-day operational performance, which is a redesign of the cinema from sound effects, visual effects to the overall cinema experience.
The key word for design is "immersion."
In general, the core design of Dolby Cinema consists of three technologies: Dolby Panoramic Sound, Dolby Vision and Full Studio Design.
Among them, the introduction of Dolby Panorama is the earliest, which has been applied in the hospital market and has acquired certain influence sound technology. It guides different levels of sound to different parts of the room through the mixer, thus creating the balance of different tracks and realizing the sound surround in the shadow hall and the immersive experience of the sound.
Developed by Dolby and Christie, Dolby Vision is an important foundation for Dolby to enter the cinema business. The technology is equipped with Christie's laser dual projector. From the perspective of parameters, the Dolby Vision is superior to other image technologies on the market in terms of brightness and contrast.
Dolby also tried to differentiate the seat. To this end, Dolby hired a team of neuroscientists to study how the human brain perceives vision and sound and how it works in the design of the auditorium. Dolby Cinema has a slogan that says “Every seat is a good seat.” According to the introduction, each seat will be designed according to the ergonomics and line of sight analysis. The angle of the seats in different rows will also be Variety.
In the design of the studio, Dolby insisted on hiding the speakers in areas invisible to the audience because they would "make the audience more immersed in the movie world." The walls of the studio were designed in black to minimize the impact of refraction. Listening to the corridors, this series of designs is designed to guide the audience into Dolby's "dream making space".
In addition to the solution, the customer will be the key. For Dolby, developing existing customers is obviously easier than signing new ones.
On the one hand, through years of operation in the field of film sound technology, Dolby has established long-term cooperation with major film companies in North America and has certain content channel advantages for Dolby Cinema. On the other hand, like IMAX's expansion path, Dolby has already opened up the hospital channel through Dolby Panorama Sound ( more than 2,000 contracted hospitals worldwide ).
On the basis of previous cooperation, AMC, Wanda and others have been transformed into a complete Dolby Theater set of customers.
Third, the regional expansion of Dolby Cinema: North America and China are the first priority
As a high-end giant screen brand, the first choice for the expansion of Dolby Cinema is those countries and regions with good infrastructure and suitable for the development of high-end cinemas. North America and China are the focus of Duby's first stage of development.
In North America and China, two of the world's most prominent markets for PLF screens, Dolby Cinema has opened the market by partnering with powerful headline companies.
In April 2015, Dolby teamed up with AMC to complete its goal of building 100 Dolby cinemas by the end of 2024. The ten-year deal was the first important order for the Dolby Theater system.
A few months later, in January 2016, Dolby entered into a partnership with AMC parent company Wanda Group. The same is the completion of 100 theaters, this cooperation will shorten the deadline to five years. Dolby Laboratories CEO Kevin Yeaman said at the time that Dolby's cooperation with Wanda "has taken an important step" in its global market landscape.
( from the network )
Frank Bryant, Dolby's senior vice president, said he valued the growth potential of the Chinese market, which currently has a large number of new cinemas. This is a great opportunity for Dolby, who also plans to use China as his long-term strategic location.
After deploying the strategic market, Dolby began a global scatter expansion, and the European market is another major position for Dolby after North America and China. The theaters that have been collaborating with Dolby in these years include South Korea's CGV, Middle East's Reel Cinema, France's Les Gaumont Pathe, Austria's Cineplex, and the Dutch Vue.
Dolby announced new partners in Q3, especially in Europe. Including cooperation with OBY ON Cinemas, it brought Dolby Cinema to the UK for the first time and plans to build seven screens. Cooperation with Kinopolis will open the first Dolby cinema in Germany; Further cooperation with France's Gau Mont Pathe has opened nine screens since the opening of the first Dolby cinema in France last October.
In August of this year, Dolby announced that it will cooperate with the Kuwait National Film Company to open Kuwait's first Dolby Cinema under the Cinescape brand.
Through the cooperation with the local head theater, the influence of Dolby Cinema has been expanded. At the same time, the speed at which Dolby Cinema is put into operation is also accelerating.
At the beginning of fiscal 2017, only 37 were in operation, up from 112 at the end of fiscal 2017. As the holder of the core technology, Dolby chose to share the box office share with the cinema for long-term income.
Dolby's financial performance: theater business is still small
Dolby Labs reported revenue of $1.082 billion in fiscal 2017, up 5.4 percent from the previous fiscal year, according to the results. Gross profit was $963 million, up 5.1.
New licensing revenues including Dolby Vision, Dolby Theater, Dolby Voice, and Dolby Conference Phones total revenues increased from approximately $30 million in fiscal year 2016 to About 60 million US dollars.
Dolby Laboratories' total revenue for Q3 in 2018 was 317.4 million US dollars, an increase of 3.85 % over the same period last year. The growth of authorized income ( accounting for 90 % ) and product sector income ( accounting for 8 % ) contributed to the good growth of overall income. Gross profit was 283 million US dollars, an increase of 3.43 % over the same period last year.
Broadcasting and mobile devices account for 56 % of authorized revenue, which is an important source of Dolby's total revenue. Dolby Cinema belongs to other businesses, with total revenue of other businesses increasing by 1 % compared with the same period last year.
In terms of regional markets, the share of international revenue rose from 68 percent to 73 in the same period last year, while the share of North American businesses fell from 32 percent to 27.
According to the Q3 earnings report, Dolby has signed 390 Dolby Cinemas worldwide, and has opened more than 160 theaters. More theaters are still under planning and construction. At the same time, Dolby Cinema's content channels continue to grow, with more than 180 films currently signed with Dolby Vision and Dolby Atmos.
According to IHS Markit, the screen is one of the fastest-growing areas in the film industry, and the potential for growth in the next decade is enormous. The total number of giant screens in 2017 was 3162, up 21% from the same period last year, according to the MPPA report, with the Asia-Pacific region having the largest screen (1397), followed by the United States and Canada (1115).
But at the same time, although the giant screen is growing at a rate of 20% every year, these technologies are highly dependent on changes in content production and consumption trends. In 2017, the global box office of 3D movies was only $1.3 billion, a drop of 18% from the same period of the previous year, the lowest since the release of Avatar.
This means that the audience's pursuit of visual blockbusters is decreasing. The lack of content will have a huge impact on the development of the giant screen business, which is also a systematic risk that Dolby must face in entering the giant screen market. It is not good news for newcomers like Dolby.
Because a single theater has limited capacity for the giant screen hall, in general, a theater will only have one or two giant screen theaters, and because of the relatively high construction requirements of Du, the completed theaters will be in the short term. It is unlikely to be the development target of Dolby Cinema, which puts it under a lot of competitive pressure. In the existing market, Dolby is also facing pressure to compete with brands such as IMAX, CGS, and 4DX.
For high-end facilities such as Dolby Cinema, the large amount of equipment costs invested in the early stage will also be a significant expense. The resulting box office increase is still the most reasonable indicator to test its input-output ratio.
In the 18-year Q3 earnings conference call, the analyst raised relevant questions to the CEO. Kevin yeamen did not respond positively, but he said that “the average output of each screen is very strong, both absolute and expected, we are all Very satisfied with its development."
As stated in Dolby's 2017 earnings report, the success of Dolby Cinema depends to a large extent on Dolby's ability to differentiate.
This article comes from WeChat public number: East and West Entertainment (ID: EW-Entertainment)
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