One of the prominent themes this year at CES in Las Vegas was the introduction of 3D video in the home and for the PC, and with LCD TV sales saturating to some degree, the CE industry is trying to look for new ways to get consumers to upgrade their panels looking ahead to 2010. This isn’t the first time that 3D content has been brought to the masses, and since it was first introduced in the early 50s, 3D movies have had several kicks at the can, though failed for a number of reasons each time.
Briefly, looking back at the history of 3D, movies were more successful than I had thought. Aside from genre movies such as sci-fi and horror films, which made use of the 3D capabilities in a gimmicky way to directly engage and interact audiences at the time, major studios experimented with a wide variety of films in 3D – from slapstick (Three Stooges) to Westerns and even musicals (Kiss Me Kate). Yet, by the mid-50s, 3D movies disappeared for a number of reasons. Since 3D movies need to have two separate images projected simultaneously (the left and right channels), viewers could be subjected to headaches if the images were out of sync. Extra cost would be incurred by theatre owners as well for the special display equipment and specialized operators, and the film prints weren’t as durable as non-3D ones (fixing prints was difficult because films initially came on two separate reels, making splicing harder). And finally, the 3D movies at the time didn’t look good (inducing headaches) when seated at the sides of the movie theatre, which reduced the income-earning potential of the theatre owner.
Over the decades, several revivals of 3D movies were attempted, and by the early 80s, the technology was much improved, and with the availability of IMAX 3D, the immersiveness of 3D technology improved because of the sheer size of IMAX screens. While the format has had some limited successes, 3D technology has been a fringe offering for some of the same reasons as before. Enabling 3D projection still required specialized equipment for theatre owners, and on the content side, shooting in 3D required more expensive and heavier cameras and literally twice the amount of film as before. It’s no surprise then that we’ve seen very few feature-length movies over the past couple of decades – the ability to provide on a return on the investment for the content and the theatre owner was a shake proposition to say the least.
Will it be different this time around? This year’s CES was an opportunity for the industry to show how the CE companies are looking to contribute to 3D finally making it into the mainstream. Are the stars aligned for 3D?
1) Bringing 3D content to the mainstream.
“Make no mistake about it, 3D is not a gimmick any longer. 3D is ready for prime-time.” – James Cameron
With any new consumer electronics technology, taking a look at the availability hardware and the content at the same time is an absolute must. One trend that is completely different from 20 years ago is the popularity of computer animation, and this is a very important theme to touch on. Why? One “flaw” in 3D content to date has to do with the nature of 35mm film – its relatively short depth of field. This means that content that is closer is in focus while content that is further away goes blurry. In a 3D context, this can lead to an unnatural effect – when viewing a 3D movie, film definitely have depth but they don’t look the same as in real life. Now with more computer animation around, it suddenly becomes economical for movie studios to produce a 3D version and a regular version of their film – since the computers used to animate the scenes inherently start with a 3D view of the world from the beginning, these 3D movies can fully optimized to produce more realistic 3D than ever before. And for regular non-computer animated features, it’s still more expensive to create a 3D movie (now estimated at around $10-15 million and rising). This may not be a big consideration given the ballooning budgets of blockbusters like the Dark Knight. One more trend that’s helping the content side of the equation is that the industry is working on getting vintage movies properly converted to 3D (Lucas is reportedly looking at converting Star Wars to the format). I wonder how good this will look, as generating a 3D image from a 2D master can only get you so far. Why is the legacy market important? Getting enough content for home systems will be a critical success factor, especially in the early years, in order to convince consumers to buy 3D screens for the living room.
All in all, the studios are looking to make a big push in 2009, with roughly 30 new features on the way and Disney accounting for roughly half of this count. James Cameron’s Avatar, Dreamworks’ Monsters vs. Aliens, and My Bloody Valentine 3D are just a few of the new features lined up to make it a 3D-equipped theatre near you, but how close that nearest theatre will actually be could be an area of concern for the industry.
2) 3D-equipped Movie Theatres – The Weak Link in the Chain?
Equipping theatres with new digital projection equipment is a critical element in the 3D value chain, though it didn’t start out that way. Digital projection has a number of advantages over legacy systems, though saving the cost of a film print is one of the most important considerations – this savings will only be magnified in the case of 3D films. The problem historically has been that this savings was enjoyed by the studio, while the capex hit was incurred by the movie theatre owner. A plan to share the wealth has been in the works for awhile now, and a deal worked out late last year with 4 of the 6 majors to secure $1B in debt financing through J.P. Morgan has been definitely impacted by the credit crunch, which means that digital upgrades will likely be much slower in rolling out. With only about 1,300 (out of 40,000 total) screen in North America supporting 3D projection, moving 3D features into the mainstream could be a slower process than the industry had expected in 2009 and 2010.
On the income side, it does look like 3D could help to bump up consumers’ willingness to pay at the turnstiles, and tests with the animated feature Chicken Little in 3D did reveal that consumers were willing to pay the $2.50-$4 premium for 3D, though some of this way perhaps due to overflow audiences that couldn’t get into the 2D screen of the film. Still, this is good news for the industry, as it seems like some consumers are at least viewing 3D as a viable alternative in addition to something which is providing incremental value.
I still think “headaches” remains an issue with the technology, though some of this might still be related to synchronizing two image streams shot on film. I understand that the technology may be improved, and it seeing a computer-animated 3D film projected on a modern digital projection system will be the most important litmus test.
3) Bring 3D into the home – Are consumers ready?
Back to CES, the response from consumer electronics companies to the 3D trend was to introduce new LCD screens that were “3D” compatible (such as ViewSonic’s FuHzion). What this means is that the refresh rate for these screens is at least 120Hz, and when combined with special (read: expensive) shuttered glasses from Nvidia that alternatively show images to each eye at 60 frames per second, it makes for a perhaps superior experience for the end user (some reviewers note that headaches are reduced with this technology), and for consumers already with a 120Hz monitor, they would only need to then buy an Nvidia graphics card and the shutter glasses. For Nvidia, this enables them to sell more graphics chips, and their intended market (gamers) may already have a cutting-edge 120Hz monitor. For 3D gaming, the advantage is that there is already a lot of content that can be made mostly compatible with 3D displays (some 3D effects can’t be used in this case, but if 3D gaming does make it big, then programmers could improve the gaming content over time) and the long-term trend should be positive in this regard, though the cost of upgrading to a 120Hz monitor (if one already has a perfectly serviceable 60Hz monitor in use) may be a barrier in the near-term.
On the TV side, manufacturers at CES in the near-term need to look at using the same display technique used by Nvidia. LG, Mitsubishi and Samsung are using shuttered glasses synced to the TV to enable 3D watching, and content for this avenue can be provided by a Blu-Ray player and can even be driven by a gaming console like a PS3 or an Xbox 360. Longer-term, the hope is to be able to create 3D without the need for glasses (as Phillips is trying to do), which would help to save on the costs and to need to wear special shutter glasses, but would likely increase the cost of the panels significantly.
Content is going to be the biggest issue with 3D TV systems because there really isn’t a lot of content for 3D available today, and even a raft of new 3D features at the theatres will take take to trickle down to the Blu-Ray market. A viable home market is still an important consideration for the studios to create the features in the first place, and 30 new films is nothing to sneeze at. The biggest challenge in getting a viable home 3D market going will be getting the costs down, and with 120Hz LCD panels already being sold for a few years now, this shutter glasses support may be better off done in an upgraded separate Blu-Ray player or on a PS3/Xbox 360. I don’t think consumers will pay the huge premium to get 3D support in their TVs today (especially if they already have a flat panel) with no assurances that it’ll be in use in the next 5 years, but buying a special shutter glasses + dongle accessory along with the Bolt 3D Blu-Ray disc could be something which might sell. Sony did demonstrate a 3D gaming demo of Gran Turismo at CES, but no product has yet been announced (and there was no hint about 3D support for its embedded Blu-Ray player).
The biggest downside for 3D in the home living room is that it’s not the same thing as in the movie theatre. What I mean is that in the movie theatre, your location is very static, and you can’t really multi-task. At home, people want to get up, move around, and do other things when watching TV. In this context, wearing 3D shutter glasses would be disorienting, as even turning your head with the shutters active would produce eye-strain and headaches, especially if one is accustomed to holding conversations during the movie. Ultimately, will watching 3D in the home be worth the extra constraints in addition to the high initial costs of the special equipment required? With the content picture looking far worse than the availability of HD when HD TVs were first introduced, 3D in the home living room is likely at least two years at the earliest.
In summary, things could be different this time around in 3D especially in movie theaters as the content industry is trying to slip in 3D projection into the work required to upgrade theaters to digital. With improved technology (and less headaches) should come an increased willingness by consumers to spend the extra $5 to see high-quality 3D movies, but the home living room picture could be much slower in adopting 3D given the present unavailability of content. While a Sony announcement for 3D through the PS3’s Blu-Ray player is something which is very possible, I think that the lack of definite 3D home living room product plans from CE makers does suggest that they are taking a cautious approach in 2009 to the latest iteration of 3D, perhaps waiting to see how consumers take to the latest 3D movies at the movie theatre, which will unfold later on in the year (Avatar is scheduled for a December release date). The bottom line here is that this year’s CES seems to have been pretty disappointing for the most part (coupled with little news out of MacWorld from Apple), and I don’t 3D will provide a significant uptick for CE companies in the near-term. On the theater side, I think the commitment from content companies to deliver 3D movies will help drive digital upgrades of theaters, which will benefit companies like Dolby (DLBY) and DTS (DTSI) as they’ll likely want to upgrade audio capabilities. The number of new non-computer generated 3D movies is still small, so the impact as an industry on broadcast production equipment might be minimal for companies like Sony, Harris, and Thomson, but if 3D makes it as a new paradigm, the broadcast equipment industry could benefit as well over the long-run.
