Turning 3-D into a Business

"A call for industry standards for stereoscopic 3-D, both for theatrical release and in the home, was hammered home during a 3-D presentation Wednesday at the Hollywood Post Alliance's annual Technology Retreat.

"It's simply the lack of standards that is preventing the studios from taking content that they have in 3-D and formatting it onto a piece of plastic and having it play back in a player to a television that is 3-D capable," said Alan Bell, executive vp and chief technology officer at Paramount. "Clearly, home video in 3-D is essential to the converging business models."

Wednesday's 3-D session explored how the format is "moving from a science project to a business." During the session, the often-cited advantages of 3-D were applauded, but speakers also identified problems and issues that must be addressed.

Disney's "Hannah Montana and Miley Cyrus: Best of Both Worlds Concert Tour", which grossed $31.5 million in its opening weekend, was deemed an overwhelming success, and Disney president of distribution Chuck Viane encouraged the retreat audience to proceed with 3-D.

But he emphasized the need for deployment of more 3-D systems, saying: "That we could only have 683 theaters to play 'Hannah Montana' is backward movement in our business. In order for this to succeed, we must be in the thousand-plus range."

But Millard Ochs, president of Warner Bros. International Cinemas, warned 3-D enthusiasts, "We are not motivated to put in more 3-D (systems) until there is more product."

Similarly, Mann Theatres CEO Peter Dobson said: "Does the business model work? So far, no. There aren't enough movies." He suggested that at least 10 titles per year are needed. So far, six have been announced for a 2008 release.

Viane said that roughly 18 3-D films have been announced, with such leading directors as James Cameron and Robert Zemeckis on board. He also reported that "G-Force," a live-action/CG feature from Disney and Jerry Bruckheimer Films, will be a 3-D stereoscopic film.

"All the major studios are producing or considering 3-D projects," he said. "As a result, it will become easier to market these films."

Buzz Hayes, Sony Pictures Imageworks' 3-D producer of stereoscopic 3-D films, explained that for an exhibitor to install a 3-D ready digital system, a digital cinema setup is needed (virtual print fee models are helping theaters owners with these costs). Then the 3-D system is needed, which would run $50,000-$100,000. Additionally, there are the costs of glasses; if they are not the disposable models, cleaning and care of the eyewear is an added expense.

Hayes also presented an analysis of the costs of producing 3-D features. He reported that the incremental costs of producing a 3-D version of a computer-animated film is typically 8%-15% of the below-the-line costs of the film, while the incremental costs for a live-action 3-D feature would be closer to 15%-25%. Converting a 2-D film to 3-D, he added, is estimated to cost $75,000-$125,000 per minute, depending on the complexity of the material.

Disney's Viane estimated the markup for a 3-D movie ticket averages 20%.

Howard Lukk, vp production technology at Disney, emphasized that when planning a 3-D production, every aspect from dailies to previews to encoding needs to be examined.

Jim Mainard, head of production development at DreamWorks Animation, cited immediate production challenges. For one, he said that rendering for 3-D can add roughly 30% to that expense. "$2 million-$3 million more on a film like ours," he said.

Paul Chapman, senior vp technology at Fotokem, the facility that posted the "Hannah Montana" film, walked attendees through the post process. He emphasized the need for technical standards.

On that subject, standards-setting body the Society of Motion Picture and Television Engineers has published 3-D file format standards and is working on additional 3-D theatrical standards. Some theatrical 3-D recommendations have been presented to the community by studio consortium Digital Cinema Initiatives. No group has started to address standards for home entertainment.

Home entertainment was, however, a big part of the discussion. "I think it is very possible that we will have a 3-D home release this year," said Texas Instruments' Doug Darrow, pointing out that 3-D-ready TV sets have entered the market.

"The real issue is going to be (identifying) the distribution format," he added."

By Carolyn Giardina, The Hollywood Reporter