3D - A New Dimension for Home Entertainment?

The early success of digital 3D in cinemas has encouraged Hollywood to ramp up 3D production, but a lack of standards for bringing 3D to the home means studios are missing out on potential revenue in the video and TV release windows. 3D movies will arrive thick and fast in 2009, with DreamWorks Animation, Pixar and its parent company Disney having committed to releasing all their animated titles in digital 3D. Overall, there are 17 3D movies currently lined up for release in 2009, from 10 studios, compared with just seven from five studios in 2008. But at the moment, the only place you can see these movies is at the cinema.

There are two reasons for this. Firstly, no standards have yet been established for distributing digital 3D content either on TV or on video (DVD or Blu-ray). Secondly, even if they had been, consumers do not have the TV screens needed to display true 3D. Since Screen Digest research shows that video sales generate on average 41% of worldwide studio revenue from a given movie (compared with just 25% from its theatrical release), this means that this new wave of 3D movies is missing out on potential revenue further down the value chain.

As a stop-gap, some studios have released 3D titles on DVD and Blu-ray in traditional anaglyph 3D format, bundling the disc with a few pairs of the red and blue glasses needed to view them. This hardly emulates the digital 3D cinema experience, but it at least allows the studio to capture some of those lucrative video revenues, without which the 3D movie business will not be sustainable in the long term. The added bonus is that this strategy could whet the industry’s appetite for the digital 3D solutions in development by enabling consumers to get used to the concept of 3D in the home.

3D TVs in development
Several major consumer electronics manufacturers — including Philips, LG, Panasonic, Samsung, Mitsubishi and NEC — have made early forays into developing digital 3D displays. However, with price points ranging from €1,250 to €11,000, it seems affordable mass-market solutions remain a little way off.

Plus, the industry seems to be divided about the best approach — while the 3D TVs showcased by Samsung, Mitsubishi and Panasonic require the viewer to wear special glasses (stereoscopic displays), those demonstrated by Philips, LG and NEC do not (autostereoscopic displays).

Although the idea of 3D without glasses sounds exciting, demonstrations of the respective technologies clearly show that autostereoscopic solutions for the home are even further off than the alternative. Such displays require the viewer to be positioned at specific angles to see the 3D image. More importantly, they effectively preclude the viewing of content in 2D meaning that such a TV set would be useless for ‘normal’ broadcasts.

This is not an issue for stereoscopic displays, which are already achieving impressive 3D results. The question is, however, will viewers be willing to wear glasses to watch 3D at home? It doesn’t seem too unreasonable in the short- to mid-term while the market develops. They are doing this in the cinema, after all.

Potential platforms for 3D content
So assuming consumers play ball and upgrade to 3D-capable TVs, how do you go about getting content on their screens? Packaged media — and specifically Blu-ray Disc — seems the most logical vehicle for 3D in the home. The format boasts much greater storage capacity than DVD and has been designed to evolve through firmware upgrades, not to mention the obvious benefits of high-def. And this would allow 3D to slot nicely into the existing supply chain.

BD has already been used to deliver 3D content in early 3D TV demonstrations. At CEATEC in Tokyo in October, Panasonic harnessed the track ordinarily used for picture-in-picture alongside the main video stream to output stereoscopic video in 1080p from a BD50 disc. Content was played back via a customized BD player, a modified plasma screen and active shutter glasses.

The Blu-ray Disc Assn. does not officially support any 3D standard but is one of a number of trade bodies — others include the Consumer Electronics Assn., the DVD Forum and the Society of Motion Picture and Television Engineers — currently attempting to devise a road map for 3D in the home. Clearly, the industry is keen to avoid another potentially damaging format war.

But preliminary battle lines are already being drawn. Several consumer electronics manufacturers have developed proprietary 2D-to-3D conversion tools, and sources indicate some of the studios have picked sides, although none has publicly admitted to a preference. However, with the fallout from the high-def disc conflict still fresh in their minds, most industry insiders will likely be more inclined to work together to find a single 3D solution.

Hurdles and opportunities
Whatever the platform, the industry has an opportunity to generate incremental revenue from 3D. Higher ticket prices are being imposed for 3D movies at the cinema, so there is a potential for a price premium in both the video and pay-TV windows. Consumers are already accustomed to paying more for high-def content, and given that 3D is easier to distinguish, the premium can be justified.

The obstacles facing 3D are almost identical to those initially facing high-def: the requirement for new displays in the home, increased storage capacity or bandwidth requirements and the need for a guaranteed flow of dedicated content.

And although 28 3D movies are already slated for release from 2010, there is not nearly enough content on the horizon to persuade consumers to upgrade en masse to 3D TVs. However, now that the consumer electronics industry is endeavouring to define technical standards for delivery and display, content owners will be more inclined to explore the area. To date, consumer electronics manufacturers have complained there is not enough 3D content to merit the development of capable technology, while content producers have argued that they cannot invest in programming without a viable means of distribution—the announcement of a unified approach would go some way to resolving this chicken-and-egg dilemma.

But even with an explosion in 3D content and the availability of cheaper 3D-capable displays, how many consumers will be ready to throw out the shiny flat-screen HDTV they purchased recently? Especially since they are only beginning to enjoy the benefits of this investment. It is still relatively early days for Blu-ray, and HDTV programming is by no means widespread.

Screen Digest analysis shows that about one-third of TV households in Japan, Western Europe and the U.S. have invested in an HDTV set. Assuming that the average replacement cycle for the main TV in the home is six years, it is possible that a viable installed base of 3D-capable displays could begin to emerge in four to five years’ time.

Ultimately, the future of 3D hinges on the outcomes of the standardization efforts by the BDA, CEA and their fellow trade bodies. Once these industry groups have mapped the route for digital 3D in the home, the picture will be much clearer.

Note: Bringing 3D to the home is one of a range of topics that will be addressed at Screen Digest PEVE Digital Entertainment 2009, the leading conference for the international home entertainment business, which takes place in Paris March 12-13.

By Marie Bloomfield, Screen Digest analyst, VideoBusiness