The 3-D format is a boon to both studios and exhibitors, and it’s here to stay — or it will be, as soon as the credit markets thaw.
That was the message from Monday’s speakers at the 3-D Entertainment Summit in Century City.
In a panel discussion on 3-D distribution, National Assn. of Theater Owners prexy John Fithian said that 3-D is “the value add” that theater owners have been looking for to spur their transition to digital projection. “This is the technology of the future, and it’s going to be here for a long time,” Fithian said.
Theater owners are demanding more 3-D product, he said, and credited the studios with holding up their end with a generous slate of 3-D titles in 2009.
But the economic downturn is putting a crimp in plans for the format.
“We have several significant digital cinema models and plans that are very close to completion, about 25,000 screens all in all, but the credit crunch has put a temporary block on those deals rolling out,” Fithian said after the panel.
Imax chairman and prexy of filmed entertainment Greg Foster said it’s clear the majors have made their bet on stereo, but “it’s like a game of ‘Chutes and Ladders.’ The credit crunch is a chute. But we’ll get back up again.”
DreamWorks Animation’s Jeffrey Katzenberg, a consistent evangelist for 3-D, kicked off the event with a morning keynote and conversation with event organizer Bob Dowling. Katzenberg said no innovation in decades has had greater possibilities for enhancing movies.
The format “offers a premium experience and has the consumer paying a premium price,” said Katzenberg, adding that he expects DreamWorks Animation to charge a $5 premium for 3-D on its releases, beginning with “Monsters vs. Aliens” in 2009.
He acknowledged that “just at the moment exhibition and distribution got together” on 3-D, “there’s no money.”
But he said the incremental cost of going stereoscopic on a $150 million DWA feature is about $15 million, and the 2,500 3-D screens he expects to be available when the movie comes out are “more than enough to recover our cost.”
Though all panelists expressed their enthusiasm for stereo, the hardest evidence for the format came in a presentation by Screen Digest analyst Charlotte Jones, who presented the business case for 3-D.
“Premium pricing is the heart of a new incremental revenue stream for movie theaters,” Jones said.
She noted that 3-D screens are generating twice the attendance of 2-D screens and three times the revenue, and that ratio has been holding steady despite the growing number of 3-D screens.
“Journey to the Center of the Earth,” the highest-grossing 3-D film to date, generated more than half its grosses from the 30% of screens that showed the movie in 3-D, said Jones.
Films in the 3-D format also play longer, she said, so overall that means theater owners can recoup their investment in 3-D systems with just three to four releases. But she warned that the shift to 3-D would exacerbate the trend toward fewer studio pics with higher budgets.
Looking at export markets, Jones noted that 3-D films are immune from strict quota regulations, including those in China, making 3-D “a direct route to the Chinese consumer.”
Fithian sounded a somewhat cautionary note on the overperformance of 3-D screens but basically concurred that the format is attracting more moviegoers who are paying higher ticket prices and emerging more satisfied with their experience.
“You’ve got to discount those (per-screen) numbers on account of scarcity,” he said, “but when we get fully integrated, when we have all the screens changed over to 3-D, I still think it’s going to do better (than 2-D).”
Walt Disney Studios Motion Picture Group prexy Mark Zoradi, in previewing Disney’s extensive 3-D slate, said 40% of the gross on “Bolt” to date came from 3-D screens and that on “Bolt,” “Meet The Robinsons” and “Chicken Little” combined, 3-D screens outperformed 2-D 2 1/2 to 1.