Recession Blurs Outlook for 3-D Movie Expansion
Hollywood is turning to 3-D movies more than at any time since the 1950s to boost ticket sales, but the recession has created a distribution logjam that has blurred the current box office outlook for 3-D. This Friday, Walt Disney will release its new Jonas Brothers: The 3D Concert Experience in theaters equipped for 3-D. But that means Focus Features' Coraline, which has been a 3-D hit, must cut its 3-D presence to some 300 screens, probably before it has played to all potential fans.
"It's a statement about how the industry is just so behind an opportunity to make more money, at a time that we've been told constantly the economy is bad. It's ridiculous," said Jack Foley, president of distribution for Focus, a division of General Electric's NBC Universal media wing.
The roll-out of expensive digital equipment needed to show 3-D movies began early this decade and picked up steam after Disney's 3-D version of 2005's Chicken Little became a hit. Hollywood sees 3-D movies as a way to lure audiences out of their home entertainment "cocoons," and the major studios will release more than a dozen movies in 3-D before the year is out, about twice as many as in 2007 and 2008 combined.
No movie studio has turned to 3-D as aggressively as DreamWorks Animation SKG, whose Chief Executive Officer Jeffrey Katzenberg has pledged to release all the company's movies in 3-D. But even Katzenberg has acknowledged the dampening effect of the recession on his push for 3-D.
"There's the practical world that you can't ignore, which is we've just had a complete and total meltdown of our financial markets, which has made the financing of this much more challenging and has slowed it down," Katzenberg said.
DreamWorks hopes its animated movie Monsters vs. Aliens can play on 2,200 3-D screens in the U.S. and Canada when it opens March 27, but right now that appears unlikely. The National Association of Theater Owners says only 1,700 3-D screens exist, up from less than 1,000 six months ago, said Patrick Corcoran, director of media and research for NATO. Converting the vast majority of the 38,900 screens in the U.S. will cost $2 billion, he said.
"It's a large capital investment and large capital investors are just not out there right now, so it's going to have to happen screen-by-screen, fairly piecemeal," he said.
The recession, however, has not seemed to dampen consumer interest in 3-D, which can cost from $2 to $5 more per ticket. Coraline opened No. 3 at U.S. and Canadian box offices earlier this month with $16.3 million, and nearly 75 percent of that total came from 3-D screens.
"No matter how you look at it, people are willing to pay more money to go see 3-D," Foley said.
Chuck Viane, president of domestic film distribution for Disney movies also acknowledged the credit crunch's squeeze on the 3-D conversion, but was hopeful it might soon pick up.
"Everybody anticipates that somewhere in the next few months that logjam may open up a bit," he said.
Major 3-D releases for 2009 include Up on May 29 from Disney-Pixar, Ice Age: Dawn of the Dinosaurs on July 1 from News Corp's 20th Century Fox, and director James Cameron's Avatar, also from Fox and in theaters on Dec. 18.
With 40 3-D movies set for the next three years, 3-D seems here to stay. "I'm the guy whose crazy enough to think that in a handful of years most movies will be 3-D," Katzenberg said.
By Alex Dobuzinskis, Reuters
