Imax's Status in 2D/3D Conversion Challenged by Competitors

While Imax Corp. remains a leader in showing 3D movies, its place in converting films to 3D is being challenged by cheaper competitors eager to satisfy Hollywood's thirst for stereoscopic product. The success of James Cameron's Avatar, which was filmed with 3D cameras, is spurring studios to get more 3D content out the door quickly, making conversion a logical alternative.

Take Time Warner Inc.'s Warner Bros. Pictures, which recently announced that Clash of the Titans would be released in 3D. It pushed back the release date one week to allow for conversion time. Dan Fellman, president of domestic distribution at Warner Bros., which is finalizing a multi-film release deal with Imax, said the cost of conversion can be as low as $5 million today - depending on length and complexity - down from $25-$30 million previously.

He said Warner Bros. plans to release about five 3D films this year and nine in 2011. While he praised Imax's conversion process, which was used in films like Superman Returns, and said the studio is talking to Imax about other conversion projects, the Titans contract went to Prime Focus Ltd., an India-based company that worked on Avatar.

Richard Gelfond, chief executive of Imax, said the company is deciding what role it should play in 2D-to-3D conversion, for which it filed a patent suit against privately held In-Three Inc. some years ago.

"We're trying to figure out ways to lower our cost and keep our high level of quality and we're in the middle of several discussions about that," he said, adding it could take the work offshore. If it can't do the "right job at the right price," it may outsource the work, he added.

For its own films, such as the upcoming Hubble 3D documentary, one-third of which was converted, Imax will continue using its own process. That said, Gelfond sees more films being shot in 3D in the future as more 3D cameras - including a new digital product from Imax - become available.

Walt Disney Co.'s Alice In Wonderland opens Friday in Imax and conventional theaters. Most of the 3D film is computer-animated, except for live-action scenes at the beginning and end, which were converted by In-Three and Sassoon Film Design, both of California. The pair also worked on Disney's G-Force.

In-Three is already moving offshore through an outsourcing partnership with Reliance MediaWorks to establish a 2D-to-3D facility in India. Neil Feldman, In-Three's chief executive, said the best way to keep the quality high and costs down is with a large-scale operation, and the facility is expected to have capacity to handle 10 films within a year and perhaps 20 in two years.

He believes studios will embrace conversions because of the potential cost savings and artistic flexibility versus dual-camera recording. Quality is the reason 3D is successful, he said, "and you have to be careful where you compromise."

By Andy Georgiades, The Wall Street Journal