Exhibs hit back at Sony

Group responds after studio says no to future 3D glasses subsidies

The spat between distribs and exhibs over who pays for 3D glasses has become, aptly, multifaceted.

The National Assn. of Theater Owners responded Wednesday to news that Sony will stop footing the bill for providing 3D eyewear to moviegoers, calling the news “insensitive to our patrons, particularly in the midst of continuing economic distress.”

Sony, in turn, released a statement later in the day saying, “There are constructive ways to deal with the cost of 3D glasses that will not adversely impact consumers and can also help the environment.”

The back-and-forth began Tuesday, when word broke that Sony would cease to subsidize 3D eyewear, which can cost millions per stereoscopic pic. And while Sony is the only studio to take that stance publicly this week (20th Century Fox tentatively staked out a similar position in 2009 but ultimately caved after exhibitor opposition), the other majors told Variety that they’realso weighing their options concerning 3D eyewear. No decisions have been made, however.

Sony said it will stop subsidizing 3D glasses in May beginning with “Men in Black III” and “The Amazing Spider-Man.” That bucks the trend that Disney started in 2005 when it provided 3D specs outright for “Chicken Little” as the studios looked to build an audience for the nascent 3D revival.

“Sony’s actions raise serious concerns for our members who believe that provision of 3D glasses to patrons is well established as part of the 3D experience,” NATO said in the statement. “Since the onset of the digital 3D revolution in 2005, it has been understood that exhibitors would bear the weight of technological and facility modification costs related to 3D, while distribution took on the cost of 3D glasses. Any changes to that understanding must be undertaken through the mutual agreement of both sides of the business.”

Sony, meanwhile, denied that studios have any ongoing responsibility to fund 3D glasses. “We have been speaking with people in the industry for a long time about the need to move to a new model, so this certainly comes as a surprise to no one in the business,” the studio said.

Regal Entertainment CEO Amy Miles pointed to the success of 3D but also to potential fallout should the distribs’ subsidies of 3D glasses be halted: “This could result in fewer screens exhibiting 3D films,” she said.

“Under the current model, 3D has generated more entertainment options for our customers and helped exhibitors and studios generate incremental box office revenue,” Miles said in a statement. “To the extent that Sony seeks to change the current model in a manner that shifts costs to exhibitors, we would be forced to evaluate this new economic model and program our screens accordingly.”

Through it all, the debate has been limited mostly to studios and exhibitors. Providers of 3D systems, like RealD, whose shares dropped 15% on Wednesday, have stayed relatively quiet on the subject.

But RealD senior VP of marketing communications Rick Heineman told Variety that the company, whose 3D systems account for some 90% of domestic 3D box office, works within different pricing strategies around the world. While Latin American territories, for instance, use a similar pricing strategy for glasses as in the U.S., China has a rental system in which filmgoers pay a refundable deposit. “We believe there will be a resolution that works for all parties,” Heineman said.

The glasses aren’t the only issue NATO and its constituents are upset about. The org’s press release Wednesday also cited the “failed” premium VOD experiment by Warner Bros., Fox, Sony and Universal as evidence that both sides need to negotiate before making big exhibition decisions.

The two camps say they remain open to discussion. “We are amenable to alternative models for distributing 3D glasses as long as the economics remain the same for exhibitors and our customers,” Miles said.

Sony echoed Miles, saying, “By working together on a business-to-business basis, we are confident a reasonable solution can be reached that brings benefits to consumers, the entertainment industry and the environment.”

The nation’s other largest exhib, AMC Theaters, said the NATO statement reflected its position.