Part I: The hype over 3D hides the very real challenges of making it a household must-have.
Part II Tomorrow: Holograms in the Home.
It’s no wonder the 3D hype machine is out in full force. With the success of James Cameron’s “Avatar,” it's been a very good year for the format.
And starting Thursday, gadget makers, TV networks and movie studios at Las Vegas’ annual Consumer Electronics Show will ramp up the biggest home-entertainment technology push since high-def was foisted upon the populace a decade ago.
The message is clear: the next wave of entertainment lies in 3D television.
But what if the industry throws a 3D party and no one shows up? Though there could be product in the home by spring of this year, the hurdles in programming and infrastructure mean the format has a long way to go before it sees any kind of widespread use in the home.
In the month leading up to CES, a number of key 3D TV announcements were made:
* The Blu-ray Disc Association adapted unified standards to avoid a Beta/VHS-type format war.
* ESPN announced a dedicated 3D channel to kick off June 11 with World Cup Soccer.
* Discovery Communications, Sony and Imax announced plans for a dedicated 3D channel full of nature and science shows.
* DirecTV also will be trumpeting an all-3D channel.
Meanwhile, 3D-ready TVs already have started flooding the market – even if there’s nothing yet to show on them. So far, the only announced 3D Blu-rays are DreamWorks’ "Monsters vs. Aliens," which will be bundled with select Samsung 3D-ready sets, and Sony's plan to release "Cloudy With a Chance of Meatballs" this summer, along with its Blu-ray player.
Indeed, if the slow, cumbersome adoption of Blu-ray has taught us anything, it’s that mass uptake of expensive home entertainment systems is hardly a given, especially amid the worst Consumer Confidence Index since the Great Depression.
Consumers who just plunked down dough for nifty hi-def flat-panel TVs might not be willing to upgrade again so soon to the new 3D-ready monitors. The same for those early adopters, who in the last year purchased new Blu-ray players but will still need a newer, shinier one if they want to experience 3D.
(The Blu-ray Disc Association is set to announce at CES just how its new 3D standards will affect legacy 3D equipment.)
Just as challenging are the myriad technical issues involving such fun words as bandwidth and standards.
It’s one thing for ESPN to announce it’s going to put together a 3D channel, but quite another for the various satellite and cable carriers to step up and create the infrastructure needed to import the content into the home.
In fact, cable carriers are still struggling to accommodate the girth of HD within their pipes.
“Cablevision offers 834 channels, and only 120 of them are in HD,” said consumer electronics analyst Richard Doherty. “They had to really push recently just to add 20 (HD) channels.”
With 3D consuming twice the bandwidth of the typically robust HD channel, you do the math — the wires are only so thick.
“We are still getting over the hurt of paying for HD equipment,” Fox Sports chairman David Hill warned at a recent 3D Entertainment Summit. “There is no way the broadcast industry is going to step up and pay for the 3D infrastructure without a good fairy coming into the office to write us a check.”
Certainly, there’s impetus to make this all work – especially from the studios’ point of view.
Half of the highest grossing movies in North America last year were released in 3D. As studios release more and more of their product in the format, having 3D in their primary profit center is essential.
And, despite DVD’s recent downturn, that profit center is still the home.
“North of 50 percent of the revenue on a major film comes from home entertainment,” Greg Foster, president of filmed entertainment at Imax, said during a recent Digital Hollywood panel. “If that is not available on 3D, your primary revenue source becomes something that is not quite as strong as it was.”
Added Technicolor chief marketing officer Ahmed Ouri: “Studios are looking to amortize their 3D. Blu-ray is an immediate solution.”
It's also an immediate solution for the hardware manufacturers.
TV makers have watched the margins on flat-panel HDTV sets shrink to almost nil, with price points falling well below $1,000. With the entry-level price point for 3D-ready flat panels set at around $2,000, margins will once again be thick — especially if you can offer "Avatar" in the home as a selling point.
And for cable networks and carriers eager to maintain their distribution system from the erosive forces of the internet, 3D TV represents a kind of last chance.
Sure, young, early-adopting consumers can shut down their cable and satellite services and still watch “Mad Men” and “True Blood” on their computers. But they can’t watch Portugal play Spain in the World Cup in 3D on the internet.
“Two years ago, people were still saying 3D TV probably won’t work,” Sony CEO Howard Stringer said in a conference call Tuesday, in support of the company’s joint initiative with Discovery and Imax. “The momentum of 3D in the last six months alone has been quite striking. And even though there are not hundreds of movies (in 3D), there’s a kind of rolling rhythm to this.”
(Part II Tomorrow: "Holograms in the Home")