This is the year Hollywood has finally embraced 3D technology.
One 3D animated film ("Up") premiered at Cannes, another ("Monsters vs. Aliens") got its own pricey Super Bowl commercial spot and two 3D films, from directors James Cameron ("Avatar") and Robert Zemeckis ("A Christmas Carol"), are slated for release during the Christmas season.
But after audiences pay a premium to watch the 3D titles in theaters, what will become of the films if the quality of experience can’t be replicated in the comfort of one’s own living room?
"We think there is an audience for 3D technology now, but it is still a niche market," said Dan Schinasi, Senior Manager of HDTV Product Planning for Samsung Electronics America.
It’s an issue the 3D industry is contemplating, as consumer electronic companies test out new 3D home entertainment systems and studios weigh in on the most practical industry-wide standard for the new technology.
There are already some 3D models in the marketplace. Samsung and Mitsubishi sell rear projection 3D TVs and Hyundai has a 46-inch. LCD TV — but it’s only offered in Japan. Others have plans in the works: in May, LG said it is developing a 23-inch 3D screen.
Two years ago, Samsung introduced 3D capable DLP TVs onto the market, expanding its 3D capabilities to flat-panel Plasma TVs a year later.
To watch 3-D content on those TVs, one has to purchase a separate accessory kit (Samsung’s own runs $129), which includes software to install on a PC, one pair of shutter glasses and an emitter to connect your TV to your computer.
The software does have the capability to convert 2D films into 3D, although the viewing experience isn’t as good as it would be with software or films that are mastered in 3D. Because of this, the TVs are primarily used by gamers who want to play 3D computer games.
Meanwhile, Panasonic — which has been hurt by its Plasma business as LCD screens continue to gain popularity — is planning a major 3-D home entertainment push, including the rolling out of a 103-inch plasma 3D television. In February, Panasonic established its own R&D labratory to help studios develop 3D Blu-ray technology; more recently, the company in April announced it is developing a professional 3D full HD production system, which includes a camera recorder and HD plasma display for filming 3-D films and TV shows.
The moves no doubt have been caused by the success of 3D in theaters: box office tracking has shown that consumers seem willing to pay a premium of up to 50 percent more for tickets to 3D films. This month, Disney/Pixar’s "Up" pulled in $68 million in its opening weekend with 3D theaters outperforming 2D by a 2.2:1 ratio, while Lionsgate’s recent horror flick "My Bloody Valentine" brought in $27 million in its first weekend, with 3D showings accounting for more than 6 times the revenue from 2D screens.
But movie theaters haven’t been as quick to pick up the technology as some studios projected. Jeffrey Katzenberg, CEO of DreamWorks Animation, predicted that 5,000 3D theaters would be ready in time for the March release of "Monsters vs. Aliens," but it opened on less than 2,000 screens.
Still, just a few weeks ago, DWA said it would add an additional film every other year to its existing two picture a year release schedule going forward. All DWA feature films are now being produced in 3D, signaling a further commitment to the technology by the studio — with the 3D process tacking an extra $15 million onto the production of each film.
Yet other studios have been more hesitant about developing 3D content, and this has some in the industry worried.
"You need the content in order for the consumer electronic companies to do a big push around the TVs," said Rick Heineman, a spokesman for RealD, which develops digital cinema equipment for 3D movies and currently owns approximately 90% North American market share and 75% of global market share of 3D enabled multiplex theaters. "It’s similar to what happened in the theater space; theater’s weren’t going to put in 3D until they knew the movies were going to be there."
But the electronic companies say Hollywood will likely only fully commit to 3D once they are sure their films can be viewed in more places than the movie theater.
"The content providers have to make certain that there’s a base there to justify the expense of outputting to the DVD and electronic stores before they put something out on the floor," said Tony Adamson, marketing manager for cinema and TV products at DLP, which has created the chip to make certain Samsung and Mitsibushi televisions 3D capable.
Currently, there are roughly 2 million homes that have the capability of handling 3D content — a number many electronic companies say isn’t big enough to serve as a strong indicator of interest in the market. In fact, Philips recently cut its 3D display division after nearly 3 years of development because it didn’t feel the market looked promising enough.
"Once consumers can enjoy a wealth of high definition content in the living room — without a PC — usage of 3D televisions will dramatically increase," said Schinasi. The technology to bring the experience exists today but formats needs to be agreed upon to enable a wealth of content for consumers to enjoy."
And there are other things holding up the expansion of 3-D, as well: the industry has also yet to set standards to encode content on Blu-ray and other distribution mediums. While the Blu-ray Disc Association has formed a 3D task force to formally integrate advanced 3D technology into the Blu-ray format, they have not settled upon a universal 3D home entertainment specification yet, and the timetable is murky.
"If we don’t resolve on something simple in the next 18 months or so, 3D is just going to be left as a fad and it will disappear," said Phil Lelyveld, the project manager for the Entertainment Technology Center’s consumer 3D experience lab, which showcases the latest products and services targeted at the 3-d home entertainment market.
Because someone owns the intellectual property behind the different types of technologies up for discussion, it’s difficult for everyone to agree on one patent, Lelyveld explained.
"If someone did a really strong marketing campaign, that might determine the shape of the market before we can decide what the best experience is," he said. "The biggest question in my mind is if Hollywood can settle on a solution before the gaming industry drives their own solution into the home."
