Interview with RealD CEO Michael Lewis

Last year, you were among the handful of people pushing 3D, saying how much more can be done with it. This year, it's almost like preaching to the converted. If people aren't sold on 3D at this point, I'm not sure what more you can do.
I think we've gotten past the "if" and we've gotten to the "of course." That's where we are now. We've gotten past the gimmick stage, too. It's really important that filmmakers are using it as a storytelling tool and not a joke with spears coming at your head and those kinds of things, which cheapened 3D the first couple go-rounds.

Seeing how many movies are being made in 3D, it almost seems like it's a given at this point, and it might almost be a disappointment if some movies aren't in 3D.
I think that's a very good point. I think the analog to that, probably on an even bigger scale, is what happened in animation a few years ago when pencil-drawing cell animation that Disney released, couldn't compete with Toy Story and computer graphics because it didn't stack up. Now the technology has gotten to a place where you see a movie in RealD and it's much different than seeing that same movie in 2D. Competitively, you just can't compete, and we're seeing that also on the exhibition side. If exhibitors don't have 3D, they're getting beat by 3D.

I didn't do the math on the per-screen average for Monsters vs. Aliens but it was really an impressive percentage of business from 3D screens this past weekend.
It was huge. What's been consistent from the 14 films we've released is the ratios have remained constant whether we were at 88 screens with Chicken Little or thousands now. I think that's been encouraging the power of 3D. Our ratios have always averaged to about 3X and in some cases, have gone almost to 7 or 7+ with My Bloody Valentine and some of those movies. People want to see it in 3D and they're willing to pay more for it, so those two things provide a much higher ratio than the same movie shown in 2D.

You talked about the pencil animation, and seeing Beauty and the Beast realized in 3D was very impressive, so what was involved with doing something like that?
What's happening is that when we started this a few years ago, the post-production processes, both in animation and also with live action, where you take an image and you're digitizing it and you're able to play with elements and provide depth to those elements was a very cumbersome and costly tool. Now what's happened is people are getting smart very fast and so the price has dropped, the quality has gone up a lot. I think most people would say that it's better to shoot a film from the very start and that's what all the hype is about now. Natively, you can design the shots from the very start. You're still sort of working to some extent within a 2D box if you're doing your conversion after the fact, but the tech has really gotten good very quickly. I don't think that every title warrants going back and making it 3D, but certainly the classics like Beauty and the Beast or Star Wars or Lord of the Rings lend themselves to giving this a go and bringing it back, because it's a very different experience.

"Star Wars 3D" is something in the works, so is that using this process you guys have developed?
Remember that RealD is on the delivery side, but as you saw, we worked with LAIKA and Henry Selick and those guys. We know a lot about 3D so we kinda help them, and we supply technology so they can visualize it. That's not our business, but we help them, because we want them to make great movies, so it looks good on our systems. Our technology is all about the delivery of 3D so from the point that there's a left and a right eye image, that's when we take over. Our system is a hotrod to a digital cinema projector - hardware, software, the eyewear, that's what RealD is so we focus on the delivery of the perfect image in 3D.

That's one of the new things we're seeing here this year, where everyone who attends ShoWest is handed their own personal set of RealD glasses.
Yeah, we're trying to be smart about it. Where we're going to lead on this is that people are going to have their own 3D eyewear. I see a time in the very near future where you're going to go and order your own pair and you can style them any way you want.

Has anyone jumped on that yet?
Oh, yeah. We're working on that. I expect it to happen soon.

When I spoke to Henry Selick earlier this year, he told me that he was on board with 3D very early on while making Coraline, which I'm not sure many people realized.
When he started, I know we had done Chicken Little and he had started thinking about it. I don't think Monster House had been released yet, so that was a pretty big bet on a lot of levels. "Let's do stop-motion in 3D, in stereo and gee, there's 88 screens out there so where is it going to play?" That's really been one of our biggest challenges is to figure out how do you convince content producers that the platform is going to be there for them, and I think if we've done anything, we've tried to give certainty to the distributors that we would build the platform if they showed up, so we've worked very closely with everybody to try to build this eco-system. Because it is a chicken and the egg problem. You gotta have theaters in order to have content and vice versa.

From what we've heard today, there almost seems like there's too MUCH content for the theaters to actually handle it all. "Coraline" was a great example, because it had to leave theaters to make room for the Jonas Brothers movie, but then was able to get them back again until "Monsters vs. Aliens" came around. Do you see a point where people just won't be able to release their 3D movies because there aren't enough screens to go around?
8,000 screens under contract is what we have. We only have -- well "only," it's still "we've come a long way, baby" -- but 2600 screens in 33 countries in 3 years, but those will get built out in the next year and a half or so.

People have talked here about the economy slowing things down in terms of upgrading the theaters to do RealD and there's the constant question whether it's the exhibitors or the studios who should be making this happen. Have you had any more luck finding middle ground on that debate?
Well, what happened was that when this all started, it was about converting to digital because of the print cost savings, and from the time those discussions happened -- they've literally gone on from almost the past seven or eight years -- it's been "Who is going to pay for that conversion?" because the studios do benefit. What happened in the last few years is that everybody is like, "Well, that's all fine and good but God, I've gotta have 3D" so digital became the necessity in order to have 3D and 3D was driving it for us, not the other way around. We had a world economic crisis and the ability to finance digital, even after they'd agreed on the deal... it's kind of ironic. They finally agreed on the deal and then Lehman Brothers blows up and the world economy goes to hell, and it was hard to finance, but what is happening now is that the sides are all coming together and you'll see some announcements and big movement in the next month or two.

Jeffrey Katzenberg definitely seemed very optimistic about it. What about on the filmmaker side? After we talked last year, I went to the set of "Final Destination" and I spent 20 minutes talking to the DP about the learning process of filming in 3D. How have the filmmakers been taking to the process? I know that Tim Burton didn't want to film in 3D but do it in post-production for instance.
Look, I love bringing filmmakers into our theater because you can just see their brain going, "Okay, this is how I'd redo this." It's a new art and everybody's moving towards the definitive Citizen Kane. What is going to be the definitive piece that people say "Okay, we've gotten to a place where people are really using the 3D." I think we're getting there but certainly the best is yet to come and when I see some of the things that are coming in the next couple of years. I've had the privilege of seeing some footage that was pretty extraordinary.

I've seen so many 3D movies in the last year that it's become very normal and comfortable.
It's the way you see and why when you see your movies, it's the way we see, but I think the most amazing thing is we're going to see an expansion of the type of genres that use it. It's been primarily an animation medium but now we're moving into live action. We just saw our first horror genre. We've done concert movies, but you're going to see things like dramedies. There's actually a romantic comedy that's been in discussion now. Comedy. What 3D is great about is maximizing emotion and making things bigger with more impact so action-adventure works well but comedy can work as well, and there's actually a well-known group of filmmakers that have a project I'm hoping is going to go 3D. We've certainly spent a lot of time with them. (Note: Lewis told me off the record what this project is and if it happens, it will totally blow up everyone's excitement for this project.)

The way all of these studios are behind doing movies in 3D, we haven't really seen a big tentpole franchise movie be announced in 3D. "Christmas Carol" and "Alice in Wonderland" are classics, but someone saying "We're going to get Sam Raimi to do 'Spider-Man' in 3D" would be huge. How's that coming along? It doesn't seem like the additional cost would be a problem at all for movies with that kind of budget.
Yeah, relative to what the returns are, it's pretty straight forward. Your returns are going to be higher in 3D, that's the bottom line. Katzenberg spent $15 million (on Monsters vs. Aliens), he got that back. I think we're going to see a lot of filmmakers. We have all the A guys right now, but the real interesting thing is going to happen when some kid out of USC is going to say "What rules?" I mean, these guys are doing great work but I'm interested in seeing the guy we haven't heard of who is going to come out of nowhere. Who is the Soderbergh of this medium that comes out of nowhere and does a film that is very unique.

It wouldn't be unheard of since Sundance already has done 3D screenings. What about the cost of the technology to make 3D films, is that at a point where someone can use it while making a film independently?
Oh, yeah. You can do it. It's just like anything else. The cost of that technology is coming down. It's getting a lot easier. As we've benefited from digital, production has also benefited. I actually produced a couple 3D movies in IMAX and that was on cameras this big that sounded like washing machines, so now the footprint has come down and you have a left camera and a right camera and they're much easier to use. I think you're going to see "prosumer" gear that's going to be available so that people can shoot this stuff.

Are they getting closer to being able to project digital 3D films in home theater settings as well?
Yeah, we've been working on it. We supply NASA military and we've been in that area for a long time. We have it now, but it's all about business issues. Just like hi-def took a long time to sort out, it's going to take us a while to work with a lot of people to get a standard set. It's just time.

The Head of Production at Fox even stated that those who have home theaters are still going out to see movies in the theater more than those that don't. Before we wrap up, I wanted to ask about "Battle for Terra" which I saw at Toronto in 2D and was curious how that became a 3D movie. Was that just a decision by the distributors when they picked it up?
It was Roadside, but yeah, they just had filmmakers who were really committed to it, and I think those are the types of films that come out of nowhere, that are not out of the traditional system, but that was an independently done film and I hope it does well. It's a very creative and different story, and I think the 3D has done extraordinarily well, so we wish them luck. The 3D kind of makes the film.

Congratulations on having a 3D movie opening Cannes, too, because that's really big.
Thanks. All these things keep piling on and adds legitimacy to what is a new artform, and it just gets us out of the red and green zone, which is what we've been fighting since we started this whole thing.

Well, it's definitely becoming the norm and I think the next challenge will be to do a 3D presentation at Comic-Con.
We did it for Beowulf.

Right, but that was at a separate theater. You didn't do it in Hall H for 6,000 people.
Correct. We can do that now. Technology-wise, we couldn't get enough light on the screen, but we can do it now. Yeah, that would be a good visual.

By Edward Douglas, ComingSoon