3-D: IT'S BACK! Page 2

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Breaking the Logjam

The movie industry has been mired in a chicken-and-egg quagmire about what should come first: more 3-D movies or more 3-D-equipped theaters. As of this past summer, only about 4,600 of the 37,000 U.S. screens were digital, and just 1,000 could show digital 3-D. That's because theater owners have been reluctant to cover the $75,000-per-screen cost of converting analog theaters to digital plus the $25,000 it takes to outfit each theater for 3-D.

But new incentives are starting to break the stalemate. For one, ticket prices for 3-D films are usually $2 to $5 higher than for a 2-D showing, resulting in box-office receipts two to three times higher for 3-D screenings. (Hannah Montana raked in $45,000 per screen, a Hollywood record.) Also, 3-D movies provide a thrilling in-theater experience -- and they can't be pirated by someone sitting in a theater with a camcorder.

The number of digital and 3-D screens is expected to rise significantly over the next 2 years. The three top theater chains -- Regal Cinemas, Cinemark, and AMC -- recently formed a consortium to raise $1 billion to convert theaters. To help offset some of that cost, several studios -- including 20th Century Fox, Disney, Paramount, Universal, and Lionsgate -- have agreed to pay "virtual print fees" to theater owners.

The studios' motives aren't altruistic. Along with charginghigher ticket prices for 3-D movies, they can send prints to digital theaters electronically, saving them the $1,000- to $1,500-per-print cost of making and physically distributing films. And once their theaters are digitally equipped, owners can generate new sourcesof revenue by beaming in live sporting events and concerts.

3-D Comes Home

While there are almost a million rear-projection DLP sets in people's homes that can display 3-D content, that content has largely been limited to PC software, and the TVs require 3-D shutter glasses and software and driver downloads. Also, the viewing angle for 3-D on these sets tends to be narrow. That has made the proposition less compelling for most viewers, who'd rather get a similar (but less convincing) effect using a 3-D-capable DVD player. (Mitsubishi is working on a Blu-ray Disc player that can convert 2-D images to 3-D on the fly.) Over the past few months, a number of 3-D movies -- including Hannah Montana, The Polar Express, and Journey to the Center of the Earth -- have been released on DVD and Blu-ray with cheap anaglyphic glasses included. Compared with their theatrical presentations, these 3-D effects are fun but ultimately underwhelming.

According to off-the-record conversations with some major studios, one roadblock to more advanced home 3-D technology is the lack of stereoscopic standards. To help move this along, the Society of Motion Picture and Television Engineers (SMPTE) is creating standards so that studios won't have to format their 3-D material for all the different systems. The standards will address cable, satellite, and Internet delivery; DVD and Blu-ray packaged media; and even display devices like TVs and computer monitors. The Blu-ray Disc Association is also working on standards, and a 3-D@Home Consortium of studios, consumer-electronics manufacturers, and chip makers has been formed to educate and promote 3-D to consumers.

So for now, 3-D -- at least in the home -- remains what it's always been: a promising new technology waiting for its moment to shine. But with the studios and theater owners now strongly promoting the technology, that moment looks closer than ever.

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