In February, I snagged an invitation to Burberry’s latest fashion show, broadcast to five sites around the world in 3D. Christopher Bailey, who is the creative director at Burberry wanted to create an “event”, in his words a global community experience, bringing his London cat-walk alive in Paris, Tokyo, Dubai, New York and LA. I went to LA and experienced a different kind of 3D – not the full on theatrical release kind with its dizzying (for me at least) effects, but something a little more subtle, and immersive. You couldn’t escape the need to wear glasses, and even Burberry couldn’t make them chicer, but the packaging was lovely and LA’s cultural mavens donned them without too much complaint. That Burberry chose to have its latest runway broadcast in 3D is just the latest signal that this technology is making a bigger mark than ever before. So, this week I’ve invited Tawny Schlieski, Research Analyst in the User Experience Group, to share some of our ideas on 3D TV.
Before the doors opened at CES, 2010 was already the year of 3D. Is it over-hyped? Of course. Is it going to stick around in spite of that hype? Count on it.
People are in love with 3D. The big crush, do stupid things you told yourself you’d never do again kind of love. If you hang out in Best Buy or Sony Style for a while, and watch people, you’ll see it. 3D is so cool and so demanding, so inconvenient and so absolutely transfixing. We’ll do whatever 3D wants. Busy crazy people in a horrible hurry to get somewhere terribly important just stop. They sit and they don’t move. They go into a freakin’ trance. They don’t care about glasses (wearing or paying for them). They don’t care that the setup costs more than a decent used car. What they care about is that suddenly TV is huge and important again. Suddenly, they have to sit down and stop all the madness of their lives and just watch.
We’ve been in love with TV for a long time, we watch more today than we ever have. We watch it in more places, we watch it in more ways. But in so many ways, we’ve gotten comfortable with TV, and TV in turn, has learned to accommodate us. When’s the last time everyone you know rushed home for something? Roots? TV just doesn’t demand that kind of effort any longer. If we miss something, the DVR will catch it, or we’ll see it on Hulu, or buy it from Amazon, or catch it next year on Netflix.
3D isn’t like that. If we want it, we have to play by its rules. It’s special, and it knows it. We have to pay more to see it, we have to wear those dorky glasses, and we have to be patient, and wait for the content we want to slowly trickle onto the Blu-ray shelves.
This isn’t the first time we’ve rekindled our affair with TV. We loved our first DVR too: season passes, pause, rewind, fast forward, all so easy. We were so happy to say good-bye to that big stack of VHS tapes, full of episodes we forgot were there, and accidentally recorded over. But the difference was the whole entertainment industry was (okay still is) more than a little nervous about the DVR. They knew we were using that fast forward button to skip their commercials. They knew their Nielsen ratings suffered when we didn’t tune in on their published schedule, so they tolerated our love, but never really supported us.
Why am I so sure this isn’t just an Avatardriven flash in the pan? First, consumer enthusiasm extends convincingly beyond the planet Pandora. About one third of Americans have seen a 3D movie in the theater, and among those viewers, more than 60% want to watch 3D movies in their home. (CEA) Second, in the 3D world everybody gets paid:
Studios: Avatar has raked in over $2 billion dollars in worldwide box office, and even quirky directors like Tim Burton are feeling the 3D love. Fans worldwide paid $436 million to see Alice in Wonderland in its first 10 days. Tim’s last film? $28 million in the same time frame (www.boxofficemojo.com). And it’s not just box office that studios and producers are feeling optimistic about. Optical media sales (DVDs and Blu-rays for you non-geeks out there) have been anemic for some time. The worldwide Blu-ray disc market in 2009 was around 125 million units, so with Avatar attendance well over 200 million worldwide, and Alicebringing in another 50 million fans so far, it isn’t a stretch to imagine a few marquee3D titles that can’t be streamed over Netflix making a measurable difference in the 2010 results.
Theater owners: It costs at least $50,000 to take a screen 3D, and a seat in front of that screen will run you ~$5 extra/ticket. If we go back to Tim Burton’s films for an example, at its peak Alice in Wonderland produced almost $12,000/day in average theater revenue. Charlie and the Chocolate Factoryearned less than half that. Even after the theaters send the studios their share of the ticket revenue, they’re often making $3,000 more per day for a 3D screen. So the upgrade could pay for itself in less than three weeks.
OEMs: Panasonic sold out its 3D TVs in the US in their first week on the shelf (businessweek.com). Consumers are buying, and they are paying price premiums when they do. In addition, the OEMs are creating a robust accessories market for glasses, where margins tend to be dramatically better than in the very lean TV space.
TV service providers: Today, your cable/satellite company charges you ~$8/month for HD content, and they are twitching in their sleep at the idea that they can get another $10 added to your monthly bill for 3D.
So where does this tornado land us? Is Good Morning Americagoing to be broadcast in 3D before summer hits? No. 3D isn’t HD, it isn’t ready to overrun the full 8 hours of TV you watch every day.
Here’s the thing. 3D is appealing for consumers, it’s immersive, it’s cool. But the reality of the technology today doesn’t map to a lot of the ways people watch TV. Glasses work fine for Family Movie Night, and the cricket and soccer world cups, when the popcorn’s popped, and you’re sitting on the couch, focused on the TV. But for the TV you watch while you’re making dinner, playing Farmville, or paying your bills, the current 3D experience isn’t going to work.
3D isn’t coming, it’s here. And everybody is in love with it. Our great passion to see it is fueling big profits for studios, theaters, OEMs, and (soon) the service providers bringing us the Masters, the Final Four, and the World Cup. We’ve never stopped loving TV, we are all just happy to have a compelling reason to say “Honey, we’re getting a new TV.”