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Business Report: 3D Effect Is Positive for Movies, Unclear for TV

With the commercial success of Avatar in 2009, 3D technology firmly established itself as a key component of the entertainment industry. Box-office returns in 2010 and 2011 demonstrate that 3D technology is having a positive financial impact on the movie industry, while the standardization of Blu-ray players and the HDMI 1.4A format in the consumer space ensures that films produced in 3D can continue to be viewed in 3D. However, the future for the 3D landscape, particularly for television, remains unclear as the technology develops and expands.

Gordon Castle, director of the Media & Communications advisory practice at PricewaterhouseCoopers Entertainment, discussed the “Avatar Effect” in his Report on 3D Business Landscape, presented at the Society of Motion Picture and Television Engineers’ 2nd Annual International Conference on Stereoscopic 3D for Media & Entertainment.

Avatar Effect” refers not only to the commercial success of a high-profile 3D endeavor but also to the resulting public awareness that the 3D experience can be brought into the home. Following the movie’s release, interest in purchasing a 3D television increased 5% while awareness that 3D can be viewed on a television increased 21%.

“The 2012 Olympics in London and 2014 FIFA World Cup in Brazil could have an ‘Avatar Effect’ on 3D home adoption,” said Castle, referring to two marquee sports events that will be produced in 3D. Although the 2010 FIFA World Cup was produced in 3D, the diffusion of 3D TV sets was too low at the time for the economic impact to be truly measured. The Olympics and the World Cup have the potential to both raise awareness in the availability of 3D television and, at the same time, take advantage of the greater number of 3D sets already in homes.

In the two years since Avatar’s release, 3D has generated 50%-70% of box-office revenues, but, Castle stressed, “we also need to pay attention to the amount of live content produced and the big marquee events” on television.

He discussed four factors integral to the success of 3D television: affordable TV sets, availability of content, sound business models, and viability of production and distribution. Creating a thematic channel requires approximately 3,000 hours of programming content.

Price premiums are decreasing on 3D television sets as interest in 3D programming is increasing; 32% of those interviewed for Castle’s report said they would switch providers to get access to 3D television.

According to Castle, demand for 3D content in television certainly exists. “The people who will get the largest percentage of the growth in the future will strike the right balance between data, creativity, and engagement in digital distribution” of their content.

Ultimately, the future of 3D relies on the quality of content produced. Although moviegoers may not want to pay price premiums on a 3D ticket (averaging an additional $3.50 per ticket but expected to decrease), most will spend the extra money if they believe the content is worth seeing. Despite the saturation of free digital content, consumers have continually proved that they will pay for content that offers a unique experience, convenience, and quality.

The success of 3D television hinges on the balance between the medium’s creative and technical elements: creating content that consumers want to see while enabling the consumer to experience that content satisfactorily and economically.

“It’s quality of the content from both a technical standpoint and a creative standpoint,” Castle said. “[Consumers] have to want to see something in the best way you can possibly see it.”

 

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