3D Content Business Looks Sustainable
There is growing evidence that the latest interest in 3D video will lead to a sustainable content business, with cinema revenues providing solid evidence that consumers will pay more for 3D content to offset additional costs. The International Union of Cinemas (UNIC) reported “historic” level cinema attendances in almost every European country during 2009 and said box office increases were driven mainly by 3D cinema. UNIC represents exhibitors from 18 countries with more than 28,000 screens and 800 million admissions per year.
The Cinema Exhibitors' Association (CEA), which represents the interests of around 90 per cent of UK cinema operators, says that by the end of 2009, 3D movies were achieving an average of three times the gross revenues of their counterpart 2D versions. Not surprisingly, the movie Avatar is setting the 3D benchmark. “3D screens [for Avatar] are at this moment taking over seven times the box office of their 2D equivalent,” the CEA reported in January 2010.
The National Association of Theatre Owners, which represents more than 30,000 movie screens in the US and other countries, says around 70% of Avatar’s domestic box office came from 3D screenings. The figure is similar when all 3D movies are considered. “Films that were released in 3D grossed approximately $1.7 billion in 2009. The 3D screens probably accounted for anywhere from $1.1 - $1.3 billion of that,” a spokesman reveals.
The CEA is confident the 3D revenue boost is not explained by the curiosity of first-time 3D viewers. The organisation told us: “Given the investment studios and cinemas have made this is not going to be a ‘flash in the pan’. Everyone expects the technology to stay. For the foreseeable future we think that three times revenue is sustainable – we don’t see any reason for that to drop off.”
Futuresource Consulting expects the number of 3D movie titles will double during the next 12-18 months and notes that major titles in the US, like Bolt and Ice Age, have generated more than half of their theatrical revenues from the 3D version. “Consumers on both sides of the Atlantic are demonstrating that they are prepared to pay a premium for 3D content,” the company states.
Market intelligence company Quixel Research surveyed 1,000 HD TV owners online and found that people are willing to pay more for a 3D movie channel on television. Three-quarters of the respondents said they would prefer to receive 3D content via their cable or satellite provider, leaving Blu-ray/DVD as the second choice for delivery media. Almost one-third of the sample said they would be interested in changing their content provider in order to receive 3D content.
The Quixel Research survey reveals that 78% of respondents have had a 3D experience, while half of those surveyed are interested in watching 3D at home. Those who have watched a 3D movie recently are more interested in purchasing a 3D TV than the overall sample. Another 3D survey by research company In-Stat shows that 64% of consumers are at least somewhat interested in 3D in the home, while for those who have seen a 3D movie in the last 12 months, the percentage increases to 76%.
In-Stat says the popularity of Avatar and other 3D movies will put 3DTV on the map for consumers. The company forecasts that worldwide 3D TV shipments will reach 41 million in 2014 and says 3D Blu-ray player shipments will track their sales closely.
“Pricing is a major barrier,” the company warns. “Survey respondents are not willing to pay much of a premium for 3D TV sets and Blu-ray players.”
Michelle Abraham, Principal Analyst at In-Stat told us last week: “Most people said they would be willing to pay in the range of a few hundred dollars more for a TV set with 3D, and they don’t want to pay too much more for Blu-ray players.” Meanwhile, Quixel Research found that consumers are willing to pay for 3D glasses but do not expect to pay twice as much for two pairs.
Announcing a new 3D report in December 2009, and predicting a major push for 3D-ready TVs early this year, Mike Fisher, Convergence & New Technologies Consultant at Futuresource, noted: “These TVs are a prerequisite to consumer adoption in much the same way as HD-Ready sets were used to seed the high-definition market five years ago.
“3D chipsets can be embedded into next generation hardware at relatively low cost. Combine this with an integrated consumer awareness programme and a coherent ‘3D-Ready’ branding strategy, and there will be few obstacles to consumer adoption. Further, the determination of a number of leading hardware brands to carve an early position in the 3D TV and BD (Blu-ray disc) market will inevitably result in some attractive 3D bundling deals.”
The Quixel survey also revealed that almost two-thirds of people see 3D content as a group experience, a theme echoed by the Cinema Exhibitors' Association, which is not concerned by the availability of 3D movies at home. “We don’t see 3DTV as a threat to cinema,” says the organisation. “What cinema offers is the latest films in a group environment on the big screen, as the director intended, and that will always be the case.”
It is very early days for the 3D advertising market but subscription TV provider BSkyB and confectioner Cadbury showcased their adverts in 3D at the cinema alongside Avatar in the UK. Digital Cinema Media (DCM), which describes itself as the leader in UK cinema advertising, says that at the cinema, 3D can ensure deeper engagement with adverts and deeper message out-take, “which will ultimately increase appeal and motivation to purchase.”
DCM claims 3D will definitely increase the ‘talkability’ factor of an advert and allows more creative advertising opportunities than any other medium. “We expect that this year the number of advertisers showcasing their brands in 3D will grow due to the increase in 3D films being released,” the company adds.
By John Moulding, Videonet
