Do We Need 3-D?

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I'm Matt Holzman with The Business Brief, a guide to what's happening in and around the business this week.

Earlier this month, people from the movie-theater business descended on Las Vegas for the annual confab known as ShoWest. Theater owners get together to talk about the challenges facing their business, the studios show up touting their upcoming films and companies that supply everything from projectors to popcorn set up shop on the trade show floor hoping to land that big contract. Industry trade papers tend to make a big deal about what's said in the break-out sessions and in the keynote speeches, but you'll find the big stories at ShoWest on the trade show floor.

I can describe this year's big story in two words – three and dee. Yes, like the monsters in the stereoscopic films of yesteryear, 3-D is back with a vengeance.

To give you an idea of how much 3-D stuff was going on at ShoWest, at one point walking the trade show floor, a man grabbed me, opened a curtain and shoved me inside a tent like a carnival hawker. They were showing the recent hit Beowulf in 3-D.

This man who grabbed me was a representative of the Korean company masterImage, one of maybe a dozen companies hawking 3-D films or technology at this year's ShoWest. Dolby Labs is another one.

Jeff McNall is cinema product manager at Dolby.

"We're looking at an escalation, a phenomenal escalation of 3-D releases. Last year we saw a few, this year we're seeing maybe half a dozen, 2009 you'll have probably 3-D features every other month. In fact, you'll have 3-D collision weekends."

In fact, DreamWorks Animation announced all their movies would be 3-D starting in 2009. But with only 1,000 screens currently capable of showing 3-D, that's going to be a problem. DreamWorks has already delayed the release of How to Train Your Dragon from 2009 to 2010 because it's opening would have been caught between two other 3-D releases, A Christmas Carol with Jim Carrey and James Cameron's Avatar. But why all this multi-dimensional craziness now?

Well, for one, because they can. Digital projection is slowly becoming the norm in American theaters , and digital does 3-D great. But more to the point, although movie revenues are up, movie admissions are down, and the theaters and the studios are trying to get people back to the Cineplex.

"Naysayers on Wall Street believe the movie industry is dying, but 3-D stands to re-establish the experience premium of movie-going," one analyst said recently in the LA Times. And so far, 3-D has proved a pretty good bet.

Meet The Robinsons came out last year in both 2- and 3-D, and averaged three times more per screen in 3-D. And The Polar Express and the latest Harry Potter made good money in 3-D re-releases.

Of course, big numbers at the box office don't take into account the higher cost of making 3-D movies and the maybe $100,000 per screen it costs to convert theaters. Exhibitors believe they can charge more for tickets to 3-D films – maybe as much as $5 more a pop – to recoup that cost. Start-up costs would be irrelevant if 3-D was here to stay.

The problem of course, is that the novelty of 3-D will wear off sooner than later. People get used to new technology. Nobody goes to the theater any more because they're in color, right? I'm also concerned that, like all those computer generated effects that were supposed to save the business a decade a go, this will be another technical distraction from the real problems with modern movie-making. After all, 3-D can't make characters and stories that are one dimensional any more interesting.

For KCRW, I'm Matt Holzman and that's The Business Brief.



Matt Holzman