Katzenberg Endorses 3D at Home

The first wave of advanced 3D at home products, including the first stereoscopic Blu-ray Disc players and titles, are expected to hit retail in 2010, and consumers should be mostly ready for them, insisted participants at Thursday’s 3D Entertainment Summit. DreamWorks Animation CEO Jeffrey Katzenberg gave this potential new business segment a grand endorsement in his keynote.

During his keynote at last year’s conference, Katzenberg said he believed that 3D at home products were a long way off, as manufacturers and studios were still hammering out how they would bow compatible hardware and software. However, there has been a flurry of development across the media industry in the last several months, bringing 3D at home closer to a reality sooner.

The Blu-ray Disc Assn. has said it will release complete universal specifications for stereoscopic 3D high-def discs by the end of this year. With that cemented, Sony and Panasonic have committed to 2010 launches of TVs and Blu-ray players. Also, Disney marketed 3D Blu-ray content at its recent D23 fan conference.

“It will be a number of years before you get to deep penetration, but we still will see a robust market that will begin to emerge in 2010,” Katzenberg said. “All the major manufacturers are aggressively rolling 3D products beginning next year.”

Speaking on a panel at the event, Paul Gagnon, director of North American TV research at DisplaySearch, predicted a strong growth trajectory for 3D-enabled TV sets. Business will likely start modestly next year, with less than 2 million units expected to ship worldwide. But that will explode to more than 6 million in 2012 and about 12 million in 2013, Gagnon said.

There is the question of whether consumers will be willing to pay for the premium likely to be placed on 3D at home products. Theatrical tickets for 3D showings generally cost several more dollars than tickets for 2D screenings, which has been largely credited for boosting the exhibition business to new heights.

Michelle Abraham, principal analyst at In-Stat Digital, noted that there is consumer resistance to paying more for 3D at home. Many people are open to purchasing another TV, with 54% of survey respondents saying they were either very or somewhat intent on buying another set. Yet when asked how much more they were willing to spend on a 3D TV over a non-3D TV, the majority wanted a less-than-$200 premium. Another large chunk, 33%, said they would pay less than $50 more for 3D over 2D.

“There might be some disconnect about what they’ll need to spend” to get that new 3D TV, said Abraham.

In-Stat also asked consumers about premiums for 3D Blu-ray Discs, and the response was similarly negative toward paying too much more than for straight high-definition titles. According to In-Stat, 61% of people would pay nothing to no more than $2 more for 3D titles.

“The consumer is not putting a high value on this over 2D content,” said Abraham. “The perception could change. People seem to want a lot for nothing.”

Some analysts believe that relatively speaking, 3D products won’t seem that pricey, especially for consumers who have already purchased high-def TVs.

“The 3D premium will seem less significant than when consumers went from [standard-definition TV] to HD,” DisplaySearch’s Gagnon said.

The analysts believe that education will be key in motivating consumers that stereoscopic 3D is a valuable investment. To date, they’ve only seen downgraded versions of 3D films in their home, where color is blurring compared to the movie’s theatrical quality.

“They don’t think they can get [theatrical quality] 3D at home, but when it is available, education will need to take place,” said Abraham. “People need to know that this [experience] is replicated from theaters.”

Also, conference participants believe that theatrical and home entertainment are so intertwined, that one can’t exist without the other in 3D.

“About 40% of people who go see a movie in the theater will buy it on DVD or Blu-ray. There is the same co-existence model” with 3D, Eisuke Tsuyuzaki, chief technology officer at Panasonic Corp. of America, said in a separate panel.

Andy Parsons, senior VP of advanced product development at Pioneer, said he thinks 3D will soon become a universal feature on Blu-ray players.

“I think it will be like BD Live, where there is the option to put it in or not, but that everyone ends up putting it in,” he said. “From a manufacturer’s point of view, I think they will think seriously about making this a standard feature.”

By Susanne Ault, VideoBusiness