Summary
Even though the average box office for 3D movies is 2 – 3 times the 2D version, failure to gain the necessary new digital and 3D theaters could result in fewer 3D movies being made and in turn could cause a continued drop in home entertainment revenues. This must be solved in the next 3 – 6 months in order to have an adequate base of theaters for the numerous projects that ar
Analysis
We have been following the 3D stereoscopic marketplace actively since 2004 when we assisted in the development and writing of a business plan for a company that has broadcast several major events in 3D and has produced a 3D stereoscopic movie.
Since that time, nearly all of the major studios have developed and/or released movies in 3D. Most of the major exhibition chains have equipped a number of their auditoriums in select locations for digital projection and in turn 3D projection.
Unfortunately, there is not yet a sufficient number of screens available to adequately support a series of movies in 3D without unduly “bumping” one movie out of the 3D theater when a new movie arrives.
This occurred recently when Disney released the Jonas Brothers movie, pushing Coralline out of the circuits. When the Jonas Brothers movie did not meet box office expectations, Coralline was brought back. This is an anomaly.
The spectacular box office results in just two weekends for DreamWorks Animations’ Monsters V. Aliens points dramatically to the potential of 3D, even if it only played on slightly more than 2,000 3D screens.
It is continued solid results and an unwinding of the crippling credit crunch that can and will make a difference. As credit restrictions loosen, the market will be able to overcome the impact of the meltdown and can work to accelerate the rollout of 3D and digital theaters.
Of course, the studios have always relied on the home entertainment market for recouping their movie investments. The same is true for the 3D movies. For those attended the Consumer Electronics Show (CES) in January, 3D enabled TVs were on high profile display at companies no less high profile than Sony, Samsung, LG, Panasonic and others.
The viability of the 3D home entertainment market will assist the studios in their decisions to make more 3D movies, knowing that the 3D revenue stream can supplement, if not enhance, the current slow down in the DVD market and perhaps even assist in the slow rollout of Blu Ray players, for it is Blu Ray that would be the preferred platform for 3D movies to the home.
We are going to be exploring The Arrival of 3D - Digital 3D Platform for Feature Films and Television at the forthcoming Spring Digital Hollywood. Panelists include executives from Cinedigm, Imax, Kerner New York, 3Ality Digital, Mitsubishi and Wedbush Morgan Securities.
We think that if the viability of 3D has not been proven to the naysayers yet, their days are numbered. We invite you to attend the Digital Hollywood panel and to bring along your naysayer friends.
