As Hollywood Embraces 3D, Economy Stymies Rollout
Here comes the 3D movie rollout like never before. Studios have announced plans to release a record 25 or more 3D titles over the next two years. Movie theaters, meanwhile, have announced plans to install 3D screens in record numbers. In my Display Daily of October 2, 2008 I reported that a consortium of theater owners, including the AMC, Cinemark and Regal, announced an agreement with Hollywood studios to spend nearly $1B to nearly triple the number of digital theaters in North America with 14,000 new installations. While these installations were planned as 2D installations, it is relatively easy (and cheap) to convert a 2D digital screen into a 3D screen. However, it seems the recent economic upheaval has put a kink in some of those plans.
The reason why Hollywood is so gung-ho for 3D is simple. With large-screen displays, DVDs, high-definition and pay-per-view movies now commonplace, fewer consumers are going to theaters. "This gives (theater owners) the chance to provide something that consumers can’t get at home," said Rich Manzione, vice president of strategic development for the Digital Cinema Implementation Partners consortium.
It also lets them charge a few dollars more for 3D productions than they do for 2D productions. Recent 3D movies have been better attended than their 2D counterparts. Theater showing Journey to the Center of the Earth, billed as the first live-action feature filmed in the latest 3D technology, sold about three times as many tickets for the 3D version of the film as theaters that showed the film in 2D, according to a report from Cox News.
Filmmakers also like 3D because it lets them do more cinematically than they ever could before. "It’s about immersive emotion and giving viewers the sense of being in the best seat in the house in every shot," said Climan, who produced a 3D documentary about the band U2 last year.
Some of the biggest names in the movie business have become big boosters of 3D, especially Walt Disney Studios and Dreamworks. Disney Chairman Dick Cook has said he is planning numerous 3D movies, including Bolt, a much-anticipated animated film scheduled for release in November. DreamWorks Animation CEO Jeffrey Katzenberg thinks all movies will be made in 3D someday.
"This is the deployment the whole industry has been working for the last 10 years," said Nancy Fares, manager of Texas Instruments’ DLP Cinema business. The rise of 3D could be a major boost for Texas Instruments, whose cinema projection systems sell for $40,000 to $60,000 each. That’s as much as double the price of a typical film projector, she said.
However the rollout plan is in jeopardy, according to a report from Knox News.
The nation’s largest movie theater operator, Regal Entertainment Group (Knoxville, TN) has seen profits decline 46% in the fourth quarter. Regal Entertainment Group operates 6,782 screens in 551 locations in 39 states.
And, in what CEO Mike Campbell calls one of the worst credit markets he’s seen in years, he said last week that the $1B digital upgrade could be delayed. "We believe, and JP Morgan believes, that it will get financed once the market returns to something that is reasonably normal," Campbell said. "We’re going to continue to put together the pieces behind the scenes to be in a position to react." But he added, "This is a very difficult market for everybody."
Digital Cinema Implementation Partners, a joint venture of Regal, Cinemark and AMC Entertainment, was to roll out cinema digital technology to theaters nationwide. On Oct. 1, DCIP announced it had signed long-term digital deployment agreements for digital cinema upgrade with 20th Century Fox, Walt Disney Motion Pictures, Paramount Pictures, Universal Studios and Lions Gate Films. DCIP is currently in discussion with the last two major studios, Sony and Warner Brothers.
Campbell said there are a total of 40 3D films announced for release over the next several years, and Regal is installing its first digital IMAX system this month. However, the rollout of subsequent theater installations appears to be delayed by the current financial and economic crisis.
With fewer digital theaters to show the upcoming 3D films we can expect that the studios returns on these digitally mastered movies will be correspondingly reduced. To what degree will moviegoers flock to the fewer-than-expected theaters showing the 3D version of the film? It will be an interim interesting test of how compelling is 3D vs. 2D.
We will keep watching this situation as the numbers roll in.
By John DiLoreto, DisplayDaily
