Nine major 3-D releases are scheduled for '09

So certain is Jeffrey Katzenberg about the re-emergence of 3-D movies that he recently traveled to Italy to talk with sunglass company Luxottica about making movie eyewear as fashion accessories.

In fact, with all DreamWorks Animation releases slated to be offered in the format, Katzenberg is a veritable 3-D ambassador, seeing its modern incarnation to be as big as the advent of color.

“I’ve been at this for 35 years, and when I saw it for the first time, I couldn’t believe it,” he says. “At the same time, 3-D won’t take a bad story and make it good.”

Digital 3-D was the talk of ShoWest in Las Vegas last week, not just because of the DreamWorks commitment to the format but a wealth of other big budget pics, including New Line and Walden Media’s “Journey to the Center of the Earth” this summer, James Cameron’s live-action/3-D hybrid “Avatar” next year and the Summit kiddie toon “Fly Me to the Moon.” There are no fewer than nine major 3-D releases skedded for 2009, including DreamWorks’ “Monsters vs. Aliens” in late March.

But for all the hype, the format still faces a host of hurdles, not the least of which is its image as a 1950s gimmick. Efforts through the years to re-introduce audiences to the format — remember “Jaws 3-D”? — have been about as lasting as Sensurround.

The high hopes this time around lie in the fact that it comes in a much more elaborate digital 3-D format, as much about depth as it is objects popping out of the screen.

As such, some of Hollywood’s best directors are pursuing 3-D projects. After “Titanic,” Cameron knew he wanted to make his next movie in 3-D, and was willing to wait nearly a decade for the technology.

Disney has been at the forefront of the digital 3-D movement, although it is Katzenberg’s DreamWorks Animation that’s gone the farthest in saying it will make all its movies in both 3-D and 2-D, beginning with “Monsters vs. Aliens.”

Even Universal, which has been the quietest on the 3-D front, is looking for projects.

U prexy of worldwide marketing and distribution Adam Fogelson told exhibs at ShoWest that the studio is aggressively looking for 3-D projects.

What remains to be seen, however, is the extent to which exhibitors are taking to the format.

Only about 4,600 of the country’s 39,000 screens are digital, and fewer than 1,000 can play 3-D movies.

Exhibs have resisted forking over the $75,000 it takes on average to convert a screen to digital, arguing that they’re made to bear the cost alone, with little help from the studios.

But the allure of being able to charge an additional $4 to $5 per ticket for a 3-D title is becoming hard to ignore. In a static business like movie theaters, there are few opportunities to generate additional revenues. That’s where the beauty of 3-D comes in. A 3-D movie also takes care of two other thorny problems facing studios and exhibitors: It provides an experience moviegoers can’t get at home, and it is harder to pirate.

Disney’s “Hannah Montana/Miley Cyrus: Best of Both Worlds Concert Tour” stunned exhibs earlier this year when it grossed more than $31 million in its opening weekend. Even though it showed on only 684 screens, tween girls were more than happy to shell out as much as $17-$20 for a ticket to the concert film.

Deborah Belisle, operations manager for a small New England theater chain, had to tell customers that BCG Theater’s 20 locations weren’t offering “Hannah Montana,” since the circuit hasn’t converted to digital.

“To be competitive, we keep our ticket prices lower than the big theater chains. In this case, we had to refer business elsewhere,” Belisle said. “We were flooded with calls.”

An unintended consequence of the 3-D movement is that it might finally be the thing that hurries along the rollout of digital screens, something Hollywood studios have long been calling for, since it will dramatically reduce print costs, as well as provide a more pristine image.

The country’s three largest circuits — Regal Entertainment, Cinemark and AMC Entertainment — had adopted a wait-and-see attitude. But that’s fast changing.

A group formed by the three circuits is in the final stages of securing a $1.1 billion financing deal that will help theaters make the transition to digital. The loan would be secured by a guarantee from studios to pay a “virtual” print fee.

If AMC, Cinemark and Regal start to make major movements, it could prompt other theaters to take action as well, if they are to stay competitive. Together, the three circuits control 14,000 screens.

“The next 24 months really the tipping point. We could see in excess of 20,000 digital screens by the end of 2010. Of those, 4,000 to 5,000 could be 3-D,” Walt Disney prexy Mark Zoradi said at ShoWest.

Issuing his perennial call for more digital screens, National Assn. of Theater Owners prexy John Fithian told exhibs at ShoWest that the promise of 3-D exhibition is substantial.

“Folks, we got to get on with it,” Fithian said. “Timing is essential.”

But are they looking at 3-D through rose colored glasses? Even if the format takes off among exhibs, the rollout faces barriers overseas, where exhibs have been even slower to adapt.

Without the international box office, studios producing 3-D movies face a significant roadblock, since many event films make more overseas than they do domestically.

“It is a big handicap,” Paramount vice chair Rob Moore said at ShoWest luncheon panel. “The international piece of the equation isn’t there.”

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