Home Theater Projectors; The Next Big Thing?

Chris Chinnock

Insight Media

Publishers of Microdisplay Report

10 Winfield Street

Norwalk, CT 06855 USA

203-831-8404

chinnock@mdreport.com

ABSTRACT

The business presentation market has traditionally been the mainstay of the projection business, but as these users find the projectors work well showing movies at home, interest in the home entertainment market is heating up. The idea of creating a theater environment in the home, complete with a big-screen projector and quality audio system, is not new. Wealthy patrons have been doing it for years. But can the concept be extended to ordinary living rooms? Many think so. Already, pioneers like Sony, InFocus, Toshiba and Plus Vision are offering first generation products - and others will follow.

But this market will require projectors that have different performance characteristics than those designed for data projection. In this paper, we will discuss how the requirements for a home theater projector differ from those of a data projector. We will provided updated information on who is doing what in this segment and give some insight into the growth potential.

1. SO WHAT IS A HOME THEATER?

The home theater market today is an ill-defined segment. Some include only front projection systems set up like traditional theaters. Others include big-screen, rear-projection TV sets and/or wide-aspect plasma-display-panel (PDP) as the output display. In addition, a DVD player or set top box is typically included as well as a premium sound system. For this discussion, we will talk only about the front projection home theater set-up.

Figure 1: A Typical Home Theater Configuration with a Front Projector Mounted on the Ceiling (Sharp)

Today's home theater installations are typically custom-built miniature theaters costing tens to hundreds of thousands of dollars. These projectors cost $10K or more, offer high resolution, lots of features and top-level performance. As a result, the market has been limited to high net worth individuals so far.

But for home theater to really catch on, it will have to be affordable in addition to being easy for consumers to understand and set up. So far, most home theaters have been designed around the projector, but in the future, the projector must be designed to fit the room. Texas Instruments calls this new concept: "Living Room Theater." The idea is to offer a projector that can fit in existing spaces, even apartments, and provide a big-screen experience for a few thousand dollars.

2. PROJECTOR OPTIMIZATION

Three-gun CRT projection systems have been the mainstay of the home theater market. They produce very nice quality images but are big, expensive, hard to maintain and often, not very bright.

A couple of years ago, manufacturers of business projectors using pixelated microdisplay technology, decided to offer products for home theater too. To be an official home theater projector however, means it must pass FCC Class B certification for use in the home.

Until about a year ago, most projector manufacturers would modify an existing data projector for better video performance and to pass the FCC testing. These projectors are then marketed through distribution channels that target home theater enthusiasts. That has now changed as projectors are being designed from the ground up to be optimized for home theater.

Challenging CRT projectors for home use are products powered by either high temperature poly-silicon (HTPS) LCD panels or Digital Light Processing (DLP) technology. Later may come units using a third microdisplay technology, liquid crystal on silicon (LCOS).

While these projection systems have found wide acceptance for the display of data, they have generally not performed very well when projecting video. For home use, the video image quality must approach that possible with CRT technology. Therefore, the contrast and colorimetery of business projectors had to improve, the black levels needed to be much darker and the units had to be quieter. On the other hand, brightness did not have to be too high, as the units would typically be used in a darkened room. This gave designers some flexibility, but did require all new designs.

With DLP projectors for example, a number of changes have been made in the standard 1-panel business projector platform. A portable DLP business projector uses a single reflective Digital Micromirror Device (DMD). It is illuminated with a rapid sequence of red, green and blue light to produce a full color image. A color wheel rotating in front of a white light source does this. The eye then fuses these color fields temporally to "see" a full color image.

Figure 2: A Color Wheel Produces Red, green and Blue Light Pulses (Unaxis)

In a business projector, the emphasis is often on achieving the highest brightness possible. This may be accomplished by adding a white (clear) segment to the red, green and blue filters on the color wheel. But this often degrades the color balance and fidelity leading to inferior video performance.

Figure 3: Color Wheels Can Have Different Segment Configurations (Unaxis)

For optimal video performance, the white segment is not used and the color wheel contains six segments of red, green and blue filters. It is also rotated faster. The result is the production of color fields at five times the rate typically used in business projectors. This helps improve the color space and reduced color-break-up problems, which are more apparent with video. The trade-off is often brightness, but that is ok for home projectors.

To get more contrast out of a DLP projector, Texas Instruments has developed "Dark Metal" layers under the mirrors to reduce light scattering and are thought to be working on new processes to planarize the post depression that supports each mirror. In addition, improved drive algorithms help to speed data to the devices and boost overall image quality.

HTPS projectors need to be optimized a bit differently. These platforms use three panels in an optical engine whereby the white light is divided into three parallel color paths. Each light path is modulated by the LCD panel and recombined to project a full color image onto the screen. Improving colorimetery and contrast in these projectors is more a matter of trading off light output for contrast and improving drive algorithms.

Both DLP and HTPS technology approaches benefit from improved up-front video pre-processing that deinterlaces signals, scales images and cleans up a number of artifacts.

Will CRT front projectors fade away? There are mixed opinions on this. Sim2 for example, claims it is one of the largest manufacturers of CRT projection systems for home theater. It thought its CRT business would decline once it introduced DLP products, but the DLP projectors actually brought more attention to the company and CRT sales grew. They have no plans to phase out CRT front projectors now.

Only one LCOS front projector is on the market now, a model sold by JVC. But others may be coming in 2002.

3. WHAT'S NEW

A year ago, there were only a handful of players, but now there are a lot more. The Table shows new home theater projection products introduced since last September and sorted by resolution. As can be seen, there are a wide variety of models offering different brightness levels, resolutions and features.

The heart of the home theater market remains products costing over $7K or $8K. At the high end, are two new products from Runco. The DLC-2000HD is a full-featured model using HTPS technology that outputs 2000 lumens. At 1500 lumens is a DLP model that will ship in January for $3,000 less.

Next are several DLP products outputting 700-800 lumens with a wide-aspect 1280 x 720 DLP chip set. Sharp was first to market with its XV-Z9000U projector that outputs a very impressive 1100:1 contrast. This product has become a big hit with Sharp claiming a 60% market share in Q3'01, moving them back into the number one position for home video projectors.

For the best image quality, top level video processing electronics are needed, such as that offered by Faroudja. Sometimes this is realized in an external electronics box or built into the projector. SIM 2's HT 300 for example, integrates the Faroudja video processing circuits internally and it comes with a lens shifting capability and both vertical and horizontal digital keystone correction - all very nice features to allow the unit to fit almost anywhere within a room. Custom installers who can sell an extra box and charge for connection services often favor the external video processors.

Figure 4: Recent Front Home Theater Projectors (Insight Media)

Toshiba's newest 1280 x 720 resolution HTPS projector, the TLP-MT7, is lower priced than the competitive DLP versions, so it will be interesting to see how it fairs in the market. Some have stated that the HTPS projectors still do not as good of image quality as comparable DLP projectors. The specifications show the HTPS projectors have lower contrast but more brightness. They are also priced a good bit below DLP models, so consumers will have to decide which is preferred.

There are also several new projectors that use 4:3 aspect 1024 x 768 DLP chip sets, such units from SIM 2, Runco and Yamaha. These units are high performing also, but must use image processing or anamorphic lenses to show wide-aspect images.

Figure 5: Marantz's VP12S-1 (left) and Sharp's XV-Z9000U (right)

A notch below these units are SVGA-class projectors - both DLP and HTPS- based. Leading the DLP camp are several dual-mode offerings from InFocus, Toshiba and Plus Vision. These units feature a DMD that can be driven in two native modes: 800 x 600 for 4:3 aspect images and 848 x 480 for 16:9 aspect images. The latter is perfect for wide-aspect DVD source material since no preprocessing of the image is needed, thus reducing the potential for artifacts.

Both the InFocus and Toshiba models are positioned at a price point in between the low-end and higher-end of home theater projectors. InFocus will supply the projector to Toshiba on an OEM basis.

Figure 6: Plus Vision's HE-3100 (left) and Sony's Cineza VPL-HS1 (right)

It is actually the low-end of these home theater products, which could be the most interesting, with two models currently being sold at around $3,000 - a new frontier in Living Room Theater projectors. Plus Vision's HE-3100 "Piano" sacrifices light output (450 lumens) and a zoom lens along with other bells and whistles to reach this price. It is also trying to sell the projector directly over the Internet, thus bypassing some of the margin associated with normal distribution channels.

Sony, on the other hand, is sticking with HTPS technology and is pushing it Cineza VPL-HS1 into a number of marketing channels. Sony has avoided revealing the contrast and brightness levels of the unit, preferring instead to focus on the applications for the projector.

4. THE MARKET OPPORTUNITY

Front projection for home entertainment is a niche market today. InFocus has stated that in 2001, 1.1 million business projectors will be sold worldwide, but only 70K to 90K front home theater projectors will sell in this same period. Almost all of these sales are going into expensive installations.

The graph below, from Home Theater Research Group, shows the penetration of each technology in home front projection. The Q3'01 up-tick in sales for DLP projectors is likely a direct result of Sharp's success with its XV-9000Z projector. Similar models from Sim 2 and Marantz are just being introduced, and in 2002, expect models from Plus Vision, DWIN and Barco. Market share for DLP projectors is expected to increase again in Q4'01, lead primarily by the dual-mode DLP models.

What will open up the home theater, or Living Room Theater market, is the big question that everyone is asking now. After talking with many players in this field, there is consensus for three things:

• The price of projectors needs to be less than $3,000
• Ordinary consumers need to be educated about living room theater and its benefits
• Consumer distribution channels need to be established to move systems into homes

Figure 7: Technology Penetration in U.S. Front Home Theater projectors (Home Theater Research Group)

If this can happen, the prize could be huge. InFocus sees 2002 as an introductory year for lower-price products targeted for a mass market, but by 2003, 500K units could be sold, growing to 1 million units by 2005. If that happens, the home theater market will be as big as today's business projection market. That's why so many companies are scrambling to figure out a strategy to capture market share.

The $3,000 price point is believed to be the point where middle-income consumers begin to look at front projection systems seriously. This price is toward the high end of the sweet spot in big screen rear-projection TVs, so the idea would be to offer an alternative solution.

The benefits of a front projection solution include a much larger screen size and no big TV system taking up valuable floor space. The potential down side is the cabling and set up that can be required and the need for an expensive screen.

Clearly, ceiling mounted systems that require digital video feeds and power are beyond the comfort level of most consumers. A coffee table solution is preferred, but cabling is still an issue. Wireless solutions are being discussed and may come to market. But these will add cost.

Educating consumers about Living Room Theater will be challenging too. Most consumer stores that sell big-screen TVs today are not well suited for displaying and selling front projection systems. In the home, the room is darkened where the projector is used, which is not the case in large electronics stores. So how can it best be demonstrated - in specially built living room showrooms? Perhaps, but this has been the territory of the high-end AV dealers and custom installers.

How to bring home projectors to market is another question. Business projectors are sold through the PRO A/V and PC channels. Home theater products through specialty AV and custom installer channels, and big screen TVs through electronics super stores and other outlets. Direct sale via the Internet is also becoming viable.

If Living Room Theater is to be a mass consumer market, many think it will likely have to be sold the way big-screen TVs are. The problem is that most manufacturers of projection products have little presence in these distribution channels. If companies come to market using some of the specialty AV dealers, it will take a lot of manpower to manage these small-scale outlets. But using distributors quickly stacks up margins. Solving these issues will take time.

Most critical will be evaluating how consumers view the current crop of low-end projectors. Is 480p resolution good enough for the most accessible video source material today - NTSC broadcasts and DVD movies? 1280 x 720 resolution projectors make 480p content look better, but there is still very little high-definition content available. Will consumers want to pay for the higher resolution projectors? Time will tell how this exciting new Living Room Theater market shapes up.

ACKNOWLEDGEMENTS

I would like to thank the many individuals who discussed this market and products with me. This includes representatives from Barco, DWIN Video, InFocus Systems, Sony, Plus Vision, Sharp Electronics, Seleco SIM2, Runco, Marantz, Sanyo Electric and Home Theater Research Group.

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