This is an interesting time for both server and projector manufacturers. Some, but not all, projector manufacturers appear set to replace their server comrades with devices of their own. In this report, we discuss the competitive position of the server companies.
The digital cinema media block is perhaps the most expensively engineering component of a digital cinema system. These products must be in compliance to NIST FIPS 140-2 security specifications, making it impossible to repair them in the field. They must pass DCI Compliance Testing, which further stresses the integrity of the design. Given the massive engineering effort required, and that fact that some server companies would benefit by sharing an OEM design, you’ll be surprised to learn that there estimated to be 8 media block companies in the world today. Further, we’re told that not all have announced themselves, but a quick rundown and some educated guesses can fill in the blanks for media block manufacturers:
Keep this little exposé in mind as we slog through the well-known server and projector manufacturers in this and the following report.
Dolby continues to play roulette with its cinema division. No company was in better position to lead the digital cinema server market at the start of the digital rollout, but Dolby blundered along and allowed upstart Doremi to make the score. Today, Dolby is number four in the US digital cinema market, with Doremi, Sony, and GDC leading (in that order).
Dolby makes its own 2K media block for its stand-alone server. When TI announced the availability of 4K projectors, Dolby was again caught short. Management didn’t want to support another media block design, so the company contracted with Mikrom. To give the appearance of leadership, Dolby started the Digital Cinema Open Systems Alliance, of which it is the primary member. It first appeared that Dolby was seeking a common interface with two media block companies, Mikrom and USL. But its advertised preference for Mikrom, and the member loss of the XDC server group (following its sale to Barco), has made DCOSA worth little more than the letters on this page.
In the broadcast and cinema markets, Dolby traditionally is a hardware supplier. But Dolby’s outsourcing of the key hardware component of its server moves it into the software space. To win in software, Dolby would have to build products that reach into the back office and enterprise level for systems management. It’s hard to imagine why Dolby would invest its brand in this way. This may just be another case of management and engineering looking everywhere but at each other. One day, this will change.
If Dolby chooses to continue in cinema, it has its audio presence to focus on. Dolby still has brand power in audio, and it has excellent presence in Hollywood. But as with Barco and Auro3D, there isn’t much room in digital cinema for proprietary formats. However, unlike Barco, Dolby has the brand power to pursue new sound formats for digital cinema and put its name on it. It can associate its audio processing hardware with new formats through its brand, although it will have to first upgrade its audio processor, as the company has allowed it to fall behind in terms of channel count.
This is perhaps the most telling part of Dolby’s story. The repeating pattern is that management doesn’t pay attention, products miss the market or simply fall behind, and a door is opened for competition to enter. It is very possible that Dolby’s BOD will not like the results it sees over the coming year, and that could be the end of Dolby in cinema.
It’s lonely to be on top. Everyone tries to take over your hill. And sometimes one makes mistakes. This could very well describe Doremi today. It has excelled as the market leader around the world. But it is no longer the cheapest server around, and there are signs that others are eating its lunch. Doremi was proud of its 2K/4K patent that allowed it to provide remote 4K processing in the projector using a baseline 2K server. However, sometimes clever patents don’t lead to the cheapest solution, and this is only one example where Doremi may have lost its way.
Doremi can take great pride in being the first TI server company to pass DCI compliance testing, both for its standalone server and its in-projector media block. But the in-projector media block is where the future is, and Doremi’s version appears to be in need of a redesign before barely getting out of its womb. Doremi now has GDC to contend with, who has stepped out in front of Doremi with a killer product. (See the GDC writeup below.)
Doremi has a hodgepodge of stuff to sell. It has a TMS, but it’s not a TMS that’s useful for calculating VPFs. It has an RF-driven closed caption device, although most cinemas prefer IR-driven devices. IR devices automatically get the right signal when entering an auditorium, while RF devices require user setup, else they’ll receive captions from a neighboring auditorium. Its closed caption display system won’t work with other servers as it can’t be driven from the standard output. Its RF-based accessible audio system will have all of the same issues that its closed caption system has.
There is a Mercedes attitude at Doremi. Build it our way, and they will like it. It’s an attitude that only works when you’re on top. It’s also a bit reminiscent of how Dolby was operating when it looked the wrong way and allowed Doremi to take over the market. At that time, the market decided it didn’t want what Dolby was offering. Doremi is not in as extreme position today as Dolby was back then, but the warning signs are there.
At a time when projector companies are planning to disintermediate server companies, this is no time to falter. Doremi is capable of regaining control of its hill, but it’s going to have to work hard to get there.
GDC took the spotlight at CineEurope by showcasing a complete server and alternative content processor that mounts in the IMB (in-projector media block) slot of the projector. The server will 2K, 4K, high frames, and will directly process streaming alternative content. It can also process streaming digital cinema content coming from shared RAID storage. In fact, the only outboard box needed to support the GDC IMB-server/projector combination is off-the-shelf storage. Prices weren’t discussed, but it is expected to be priced below competing server/in-projector media block combinations today.
The impressive part of GDC’s design was the ability to support high frame rate alternative content. When it comes to which is better: 4K or high frame rate?, your author’s answer is high frame rate. High resolution is only visible to the front rows of the auditorium, while high frame rate will present a valued image to every seat. High frame rate reduces or eliminates the blur associated with fast movement, making it ideal for high quality sports events. While resolution caters to the center of our vision, high frame rate also caters to our peripheral vision, which is sensitive to action, allowing the picture to send us the visual cues that make viewing more comfortable. The combination of reduced motion blur and better cues to our peripheral vision will make high frame rate an ideal format for sporting events, offering an obvious improvement over television.
Like Doremi, GDC also offers its own TMS. However, the GDC TMS will calculate VPFs, which makes it a better choice for exhibitors that manage their own virtual print fee deals. Unlike Doremi, GDC doesn’t make its own media block, having combined its IP with that of 3rd party media block maker AJA to produce an exclusive media block design for the company. GDC also doesn’t offer its own closed caption system, opting instead to support only the standardized protocol for 3rd party closed caption systems. This frees up GDC’s engineering to focus on projects such as its new in-projector server, and its software projects.
GDC’s sales partnership with Barco has given it a strong position in the US. And its presence in China gives it a home court advantage in the fast growing cinema market in the world. GDC has used its sales partnership with Barco to bring Barco into China, cementing a strong relationship at a time when most projector companies are planning to disintermediate server companies. GDC may not rise to the number one position in server sales, but it could very well become a strong number two.
Qube has a carefully cultivated line of products that meet the unique needs of the Indian market. It has done well with its e-cinema line of products, borrowing from digital cinema tool sets, but packaging it in a server that is less secure, and thus less costly. It’s an idea that has allowed it to share software components across product lines, reducing the engineering level required to support the full line of products.
Qube’s efficiency in managing its products, however, may now be in the midst of change. It has changed media block suppliers, to German-based Mikrom, from California-based AJA. In the past, Qube’s servers could be compared with those of GDC, due to hardware sharing. Today, Qube’s in-projector media block solution should be compared with that of Dolby, as they now share media block suppliers. Qube operates small marketing and support functions in the US and Europe, which presumably could scale up to meet demand. It was in line to benefit from sales to MGS Group in Australia, before the DCN fiasco blew up. It has a sales partnership with Datasat Entertainment in the US, who markets the server in Latin America and other territories.
Qube is a capable company, but without a strong marketing effort to raise its profile, it will be destined to remain number 5 in cinema server sales, well behind Dolby.
Sony [see next report]