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Economy delaying 3-D hits

- The Washington Times - Friday, April 3, 2009

Looking at the box-office numbers over the past six months, it's no wonder studio heads and television manufacturers are excited about stereoscopic 3-D technology. It has the power to turn even middling movies into hits.

Yet, despite the enthusiasm, the 3-D revolution has been slowed by economic worries and the cost of converting 2-D screens into 3-D screens at the local cineplex.

Dreamworks Animation studio head Jeffrey Katzenberg told this reporter in December that approximately 2,500 screens would be ready to show his "Monsters vs. Aliens." Instead, it was shown on just 2,000 or so when it debuted March 27.

Even with that diminished screen count, "Monsters vs. Aliens" rode a 3-D wave to the third-highest March box-office opening ever. It played on 7,300 screens, 2,000 of which — approximately 28 percent — were 3-D. That 28 percent accounted for 56 percent of the box office, about $33 million.

The success of 3-D has been a consistent theme at the box office in recent weeks.

The stop-motion animated feature "Coraline" pulled in an even higher percentage of its first-weekend gross via 3-D screens than did "Monsters vs. Aliens," almost 75 percent. "My Bloody Valentine 3D" saw 3-D screens outgross standard 2-D screens almost 6-1.

The key to these higher grosses and skewed percentages is the surcharge theaters tack onto any movie playing in 3-D, anywhere from $3 to $5. Is it any wonder the transition to 3-D has the studios salivating?

"They can't raise their ticket prices 50 cents today," Mr. Katzenberg, a 3-D evangelist, said of theater owners in December. "Fifty cents people will balk at. They'll drive to another theater if somebody tries to raise their prices today.

"This, people will pay for."

So why have exhibitors been so slow to convert their screens to 3-D? The ailing economy is largely to blame.

Even though the studios have promised to pay a portion of the almost $100,000 per-screen conversion cost, theaters have been slow to pick up their end of the cost because of funding complications. As Wall Street tanked, venture capital dried up, taking with it the source of the exhibitors' conversion money.

Though the conversions are happening at a slower pace than the studios might like, they still are occurring. According to RealD Vice President Rick Heineman, his company hopes to have about 4,000 3-D screens worldwide up and running by the time James Cameron's "Avatar" hits theaters in December.

"Avatar" could be the game-changer for 3-D at theaters and at home. Mr. Cameron's first dramatic feature since "Titanic" is sure to be a box-office draw. He also is conferring with television manufacturer Panasonic on how to perfect a version of stereoscopic 3-D that will work in the home.

"We get direct input now right from some of the most amazing creative minds in Hollywood," says Robert Perry, a senior vice president at Panasonic.

Mr. Cameron has "been really supportive of our efforts and provided us a great deal of feedback and input to kind of keep us on track and make sure we're sensitized to what their needs are," he says.

Panasonic isn't the only player in the home 3-D market. Though some sets from other manufacturers are available already, the 3-D effect is unreliable, and there's little content to support the hardware. The first stereoscopic 3-D high-definition plasma sets from Panasonic — which debuted to much fanfare earlier this year at the Consumer Electronics Show — are 12 to 18 months from hitting store shelves.

The 3-D system Panasonic is working on mirrors the 3-D system currently racking up box-office dollars in theaters, down to the glasses that must be worn to create the effect. The plasma television Panasonic is prepping for the consumer market works by capturing two separate high-definition images from two different angles and using plasma's ability to switch between them at high speeds to, in effect, blend together when viewed through a special pair of glasses.

The problem Panasonic faces is persuading working on — no easy task because other manufacturers, such as Phillips and Mitsubishi, have developed their own 3-D TVs.

A format war — especially one that takes place during a global economic downswing — will only further delay consumer adoption of the 3-D format, just as the HD-DVD/Blu-ray battle slowed adoption of high-definition home entertainment.

"We want to create the standard because we think it is the next frontier of television," Mr. Perry says. "We think the creative community wants to make more realistic and more lifelike content. So we think this is just a golden opportunity for everybody, and we hope that it doesn't degrade into a ridiculous standards battle where people fight against each other and the consumer loses."