3D Traffic Jam Snarls the Studios

The 3D format is here to stay but is in danger of becoming a victim of its own success. Presenters at the first day of the 3D Entertainment Summit at the Universal Hilton voiced frustration that the business is growing so fast that 3D pics are cannibalizing each others' release windows and leaving money on the table. The shortage of screens has led to 3D playing times this year that are several weeks shorter per title than last year.

During "The Business Case for 3D" panel, Screen Digest senior analyst Charlotte Jones said 3D remains a strong revenue driver for features, especially for this summer's pics. "Without 3D premium pricing, the summer would not have registered as positive," she said. Moreover, she said, "Where 3D has permeated a genre, titles not available in 3D are at a significant disadvantage."

But while 3D screens continued to overperform 2D screens so far this year by about three to one, on par with historical averages, that figure is inflated by the overperformance of My Bloody Valentine. Without that title, the ratio is down to about 2.5:1.

The major crucial factor behind the decline is 3D screen capacity, Jones said, and "3D movie revenues are being squeezed because we're seeing more 3D releases in the same time frame." Time in 3D theaters per title is down, too, she said, from 8.7 weeks in 2008 to just 3.1 weeks this year. The 2010 schedule, with some 30 3D features slated, could drive the time down to as little as 1.8 weeks. This crush undermines some of the advantages of 3D, she said, "including a stronger run over the duration of a title."

In a separate session, Carmike Cinemas senior VP-chief financial officer Richard Hare supported the strong numbers for 3D, saying that in multiplexes where his chain had both 2D and 3D screens, 3D screens had about four times the attendance. "On Monsters vs. Aliens and Up, we actually had nine times," he said.

Piper Jaffrey senior research analyst James Marsh said 3D "provides some confidence there's something to replace the declining home entertainment business. That's why 3D is so exciting to (the studios)."

Following her presentation, Jones told Daily Variety, "Longer term, we would expect to see more 3D screens in the market, perhaps some 3D titles coming back a couple of weeks after their release, more of a variety of content on the 3D screens."

Attendees at the Hilton heard complaints about the lack of 3D screens starting with the morning keynote, from Henry Selick, writer-director of the hit animated feature Coraline.

"I feel positively about designing the film for 3D and disappointed about how few people got to see it in the ideal way," said Selick.

Opening on Feb. 6, Coraline found itself wedged behind My Bloody Valentine but managed to book approximately two-thirds of the 900 available 3D screens for three weeks. Then Disney's Jonas Brothers: The 3D Concert Experience knocked it out of 3D theaters, though some rebooked Coraline when the Disney pic disappointed.

"In a very small window, we did almost 85% of our business on those screens vs. 2D," Selick said. But he also said he thought the final $75 million total would have been much higher if the pic had had all the 3D screens available at the time.

Coraline was a recurring topic as execs and analysts discussed the need for more screens. Tim League, founder of the small Alamo Drafthouse Cinema, said that when his complex played the pic, "The 3D theater was a smaller venue, but the 3D numbers were 40% higher."

The lack of screens is even slowing the introduction of 3D commercials, which would play in as pre-show content in theaters.

James Stewart of Geneva Film Co. told the gathering: "The agencies love it. The marketers love it. They just don't have the money right now. Commercials in 3D cinema are happening." But, he added, "To produce content for (a small number) of 3D screens is a hard sell."

No one at the summit voiced suspicions that the current 3D wave is a passing fad, however.

Jones said she can't see any way that could happen. "We expect to see 83% of screens in the U.S. digitized by 2013, and probably a quarter of those will be 3D. So we're talking about 8,000 (3D) screens in the U.S. market."

By David S. Cohen and Peter Debruge, Variety