Research indicates international markets, homevid will drive revenue from format

The conventional wisdom may be that 3D is struggling mightily at the B.O., but research presented at Tuesday’s 3D Entertainment Summit suggests that pics in the format are simply performing with the same sort of varying results as 2D releases.

“We’re seeing a larger difference in the box office 3D ratio,” Charlotte Jones, senior analyst, cinema, for IHS Screen Digest told Variety. “We’re seeing some impressive results and some not-so-impressive results. It really is depending on how individual titles perform, and how well those titles are marketed in 3D, how well those titles are produced in 3D, and

how well audiences respond to them in 3D. The end result is that 3D has reached a maturity. It no longer has its novelty value, and each title therefore needs to be judged on its own merits.”

Jones showed a graph of 3D box office over two years showing a similar pattern for both years: Peaks in winter and summer and a deep trough in late summer and autumn.

“I think there are seasonal trends, not just in 3D but in movies in general,” Jones said. “You have the big box office hitters coming out over the summer season. They perform better in 2D and 3D. Following that you have the niche titles that have a greater affinity with 3D and therefore have a higher 3D box office ratio, but that’s not to say their total box office is performing as strongly as some of those mainstream titles. So we’re seeing a difference in how the niche and mainstream titles are being adopted.”

During her onstage presentation at the Hollywood and Highland Center, Jones predicted the format will be an important part of a fast-changing entertainment landscape over the next few years.

With the number of digital cinema screens world set to reach 46,500 by year’s end, up by about a third from the end of 2010, “We are now approaching the tipping point for digital cinema,” Jones said. “Over the next month or two, the majority of the world’s installations will be digital.”

“By end of 2015 the vast majority of world’s screens will be digital, and all could be 3D,” she added.

Digital deployment outside the U.S. got off to a slow start due to the lack of a virtual print fee model, so 3D has been the key driver in d-cinema adoption in international markets.

The post-“Avatar” gold rush appears to be over, Jones said, as the 3D split per title has come down from 67% in 2010 to 54% in 2011. However, international markets are providing a fast-growing source of 3D revenue; 54% of 3D revenue came from international in 2009, 64% this year, and up to 70% next year.

Jones pegged the need to increase brightness in theaters as a key tech challenge facing 3D, and said that while laser light sources projectors are promising, they’re not a short-term solution and they’ll represent a bigger capital investment for exhibs. Higher frame rates would bring clearer 3D pictures, but not all existing D-cinema systems can handle the higher frame rates.

Jones and IHS Screen Digest head of video Helen Davis Jayalath also discussed the fast-growing 3D TV space. There are some 30 dedicated 3D TV channels worldwide, five in France alone. Gallic 3D channels are on the IPTV platform and all include adult content. Jones said next year’s Olympics coverage “could be a watershed for live 3D broadcast, on the order of ‘Avatar.'”

Jayalath, looking at the question of whether anyone is watching that 3D content, said that while total homevideo revenue is likely to decline by 20% through 2015, Blu-ray in general and 3D Blu-ray will make up a bigger and bigger part of the homevideo stream.

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