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3D Here and Now… Entertainment & Media 3D Here and Now… a goose that lays a golden egg? s we continue to analyze the 3D Entertainment markets, we interview players around the world in A the different industries, including film studios, video game companies, broadcasters, pay-TV operators, network operators, theater exhibitors, technical equipment providers, start-ups and consumer equipment manufacturers, in the main video entertainment formats (films, live TV, home entertainment, games, user generated content) and main entertainment screens (movie theaters, TV, PC, mobile phones). Summary A Year of Progress 2 3D Movies 3 3D Television 12 3D Video Games 18 Overview of 3D R&D Programs 23 So What Lies Ahead? 24 3D Movies 26 3D Television 28 3D PC 30 3D Mobile Phones 32 Key Questions 34 A Year of Progress A Year of Progress A year ago we reported on the uncertainties about the future of the 3D entertainment market. Two tipping points for 3D that we identified then have since been resolved: standardization and the commercial success of high-profile projects, specifically Avatar. Standardization has made significant step forward with the definition of a 3D Bluray standard and the progress on HDMI1.4a specification. At the box office, Avatar ’s record-breaking success created a mass awareness of 3D movies and had a broad halo effect on 3D. So we can say unequivocally that substantial progress has been made. Many people were skeptical about 3D. Now, many people are over-excited by it. The danger is that industry players risk killing a golden goose by overselling and, in some cases, overpricing the 3D experience – and by providing too much mediocre content that doesn’t do justice to the technology. 3D Movies On the positive side, eight of the top 20 grossing films in the first eight months of 2010 were 3D, compared with three in 2009 and one in 2008. Yet it is clear that weaker films are diluting and will continue to dilute the audience’s excitement about 3D. 2007 2008 2009 Sept 2010 1 Spiderman 3 Dark Knight Transformers 2 ToyStory 3 2 Shrekthe Third Iron Man Avatar Avatar 3 Transformers Indiana Jones Harry Potter Alice in Wonderland 4 Pirates of the Caribbeans Hancock Up Iron Man 2 5 Harry Potter Wall-E Twilight- New Moon Twilight Saga: Eclipse 6 Bourne Ultimatum Kung-fu Panda Hangover Inception 7 300 Madagascar Star Trek Despicable me 8 Ratatouille Twilight Blind side Shrek forever after 9 I am Legend Quantum ofs olace Monster vs. Aliens How to train your dragon 10 The Simpsons Horton Hears a who IceAge - Dawn ofD inosaurs Karate Kid 11 Wild Hogs Sex & the City X-Men Origins Clash of Titans 12 Alvin & the Chipmunks Mamma Mia! Nighta t the Museum Grown ups 13 Knocked up Juno Proposal Last Airbender 14 The book of secrets Chronicles of Narnia 2012 ShutterIsland 15 Rush hours 3 Incredible Hulk Alvin & the chipmunks Salt 16 Live free or die hard Wanted Fast & furious Valentine's Day 17 Fantastic four Get smart GI Joe The Other guys 18 American gangster Four christmases Mall Cop Robin Hood 19 Bee movie Tropic thunder Taken Date Night 20 Night at the museum Bolt Sherlock Holmes Sex and the City 2 3D Here and Now… a goose that lays a golden egg? | 3 Opening week end -3D Office Box revenues despite adeclining number ticketssold. of 3D andby that 3D has helped the entire industry increase to its revenues office box of itmovie industry, remains revenues 70% are thatgenerated 50 to Despite the traditional rhythms successes of and failures that characterize the A 4 | 3D Here andNow… 3D Here in US$ millions Y 1 2 3 4 5 6 7 8 9 0 0 0 0 0 0 0 0 0 0 ear of N o 2 v , - 1 0 Chicken Little 5 J u 2 l - , 0 Monster House 4 6 P M rogress 7 a a goose thatlaysagolden egg? r , - 0 0 Meet the Robinsons 7 J 1 u 2 l - , 0 Journey to the Center of the Earth 0 8 J 2 a n 0 - , 0 My Bloody Valentine 0 9 F 1 e 1 b , - 5 0 Coraline 9 M 3 a 2 r - , 0 Monsters vs Aliens 6 9 M 3 a 6 y , - Up 0 0 9 J 1 u 8 l , - 0 0 G-Force 9 A 2 u 0 g , - Final Destination: Death Trip 0 0 9 S 1 e 8 p , - 0 0 Cloudy with a Chance of Meatballs 9 D 6 e 1 c , - Avatar 6 0 9 M 8 a 0 r , - 0 1 Alice in Wonderland 0 M 2 a 9 r , - 7 1 How to Train Your Dragon 0 A 3 p 3 r , - 6 1 Clash of the Titans 0 M 4 a 3 y , - Shrek Forever After 1 1 0 J 6 u 6 n , - 1 1 Toy Story 3 0 J 2 u 1 l - , 1 The Last Airbender 7 0 J 2 u 5 l - , 1 Despicable Me 3 0 J 6 u l , - 9 1 Cats & Dogs 2 0 A 1 u 3 g , - Step Up 3 1 0 Opening week end -3D share of Office Box revenues 1 1 2 3 4 5 6 7 8 9 0 0 0 0 0 0 0 0 0 0 0 0 % % % % % % % % % % % N o 5 v % - Chicken Little 0 5 J 1 u 1 l - % 0 Monster House 6 M 2 a 8 r - % 0 Meet the Robinsons 7 5 J u 7 l - % 0 Journey to the Center of the Earth 8 J 7 a 1 n - % 0 My Bloody Valentine 9 F e 6 b 8 - % 0 Coraline 9 M 5 a 5 r - % 0 Monsters vs Aliens 9 M 5 a 3 y - Up % 0 9 J 5 u 7 l - % 0 G-Force 9 A 7 u g 3 - Final Destination: Death Trip % 0 9 S 5 e 9 p % - Cloudy with a Chance of Meatballs 0 9 D 8 e 0 c % - Avatar 0 9 M 7 a 0 r - % 3D Here andNow… 3D Here 1 Alice in Wonderland 0 M 6 a 8 r - % 1 How to Train Your Dragon 0 A 5 p 2 r - % 1 Clash of the Titans 0 M 6 a 1 A y % - Shrek Forever After 1 0 a goose thatlaysagolden egg? Y J 6 u 0 n ear of % - 1 Toy Story 3 0 5 J u 6 l - % 1 The Last Airbender 0 J 4 u 5 l P - % 1 Despicable Me 0 rogress J 5 u 5 l - % 1 Cats & Dogs 2 0 A 8 u 4 g % - Step Up 1 0 | 5 A Year of Progress We also note that 3D has established Consider, for example, the popularity a global popularity and is not just a of Avatar in various nations. US/Western Europe phenomenon. Share of Avatar 3D Box Office revenues as January 17th, 2010 90% 85% 82% 79% 79% 80% 75% 73% 70% 70% 65% 61% 60% 50% 44% 40% 30% 20% 10% 0% UK Australia USA Japan France Germany Russia China Spain South Korea Source: Screen Daily (Jan 2010) 6 | 3D Here and Now… a goose that lays a golden egg? A Year of Progress 3D films generate two to three times has proved critical in the rapid digital the revenue per theater of 2D, giving roll-out which has been observed theater operators a powerful incentive this year in the US and throughout to convert to the new technology. the world. As an example, we project to have over 3,300 screens in the US A big expense for theatres is in alone by end of this year. converting from traditional prints to digital – a transition the film industry From the studio and, perhaps, the regards as essential, as it can then shed audience perspective, more 3D theaters the cost of copying and distribution. are needed, because a bottleneck occurs when too many 3D films are Once a theater employs digital released in a short time period. Industry technology, the transition to 3D is experts say a typical multiplex needs a relatively easily and inexpensively minimum of three screens devoted to done. Studios have therefore a strong 3D; some theater owners are converting incentive to make 3D movie a success the entire multiplex at once. The owners in order to facilitate a particularly have found that if they don’t have interesting and profitable change in enough 3D screens, their share of box- movie distribution. The success of 3D office revenue decreases. Share of "Monsters vs. Aliens" 3D screens and revenues 100% 5,0 90% 4,5 80% 4,0 70% 3,5 3,1 100% 60% 3,0 2,6 t 2,4 2,4 100% i n % 50% 2,5 u n i 2,2 n 2,1 2,1 i 1,8 40% 2,0 30% 56% 58% 1,5 46% 44% 41% 38% 39% 50% 20% 1,0 1,0 28% 27% 28% 10% 15% 16% 18% 16% 18% 0,5 0% 0,0 Mexico Spain International Russia Australia Italy North America UK China % of 3D screens % of 3D BO revenues 3D multiplying ratio (right scale) Source: Screen Daily (Jan 2010) 3D Here and Now… a goose that lays a golden egg? | 7 A Year of Progress A Viable Ecosystem has Emerged Another very positive finding is that when a 3D film is good, there is no negative impact on the film’s DVD sales (Avatar, no surprise, is also top-selling DVD of the year). High DVD sales are critical to the economics of film production, because they have historically had the ability to generate approximately more than half of the revenues of a film.
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