3-D is Motivating the Replacement of Film in Theaters with Digital

Implications: 1.3-D is compelling the exhibitors such as Regal Entertainment Group, AMC Entertainment Inc. and Cinemark to replace their film projectors with the higher priced digital projectors2.Due to Digital Cinema Initiatives, LLC (DCI) initial domestic focus, U2 3D may have one big liability Internationally--Not many non-US theaters are equipped with 3-D technology.3.3ality and Real D are making the 3-D viewing experience much more comfortable and enjoyable for the consumer3.3ality and Real D are making the 3-D viewing experience much more comfortable and enjoyable for the consumer2.Due to Digital Cinema Initiatives, LLC (DCI) initial domestic focus, U2 3D may have one big liability Internationally--Not many non-US theaters are equipped with 3-D technology.3.3ality and Real D are making the 3-D viewing experience much more comfortable and enjoyable for the consumer3.3ality and Real D are making the 3-D viewing experience much more comfortable and enjoyable for the consumer

Analysis:  

With the cost of digital projectors so much higher than that of the film projectors they're replacing, exhibitors need a compelling reason to make the change.

At this year’s ShoWest, the main get together for theater owners, 3-D was named the killer application. Warner Bros. Intl. Cinemas prexy Millard Ochs was quoted as saying "From a distributor's point of view, the whole reason for purchasing a digital system is that I saw what (3-D provider) Real D was capable of doing for the future."

Real D announced in March new agreements with Regal Entertainment Group, AMC Entertainment Inc., Cinemark and other exhibitors to license additional locations with Real D Cinema technology. The deals brought the installed total to more than 680 screens worldwide, more than 600 of those domestic, for the March 30 release of "Meet the Robinsons." Now as of May 2007, it is expected that the current 705 screens will expand to 1,000 by November's release of "Beowulf," and 2,000 by the end of 2008.

However, Digital Cinema Initiatives, LLC (DCI), a joint venture of Disney, Fox, Paramount, Sony Pictures Entertainment, Universal and Warner Bros. Studios, has been mostly focused domestically. Thus, the majority of the 3-D cinemas are US based. In Asia where many digital cinemas exist the DCI standards are ignored. Thus, U2 3D will be mostly viewed in the US shunning a big portion of U2’s fan base (no 2-D verion of movie will be released).

With 3-D driving adoption of digital projection and more 3-D content on the way, demand for a 3-D pipeline is inevitable, especially in post-production. It creates a different kind of work, forcing filmmakers to rethink everything, from shooting and editing techniques to color timing and sync issues. Almost every 3-D film the audience sees gets tiring on a cut-to-cut basis because the audience’s eyes are constantly adjusting to the depth of each shot. It is vital to get the two images perfectly aligned. Even tiny misadjustments give viewers headaches, and today's digital cameras weren't made with that in mind. 3ality manages depth and convergence through software that begins a few frames before the edit point and merges the depth to meet the next shot.

Where live-action films like "U2 3D" have to cope with the limitations of digital cameras, computer-animated films have the luxury of simply rendering a second image of each frame. However, on animated projects like "Meet the Robinsons," the filmmakers do their work on computer monitors, using red-blue glasses. They make adjustments, then screen their work, refining as they go. The process can be time consuming, and therefore very expensive. Creating the 3-D version for “Meet the Robinsons” was more than twice the work in post production.