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RealD: A ‘Little’ Luck Led to Massive Market Share

The digital 3D pioneer has amplified the big screen experience and earned billions for exhibitors

When RealD was demonstrating its 3D projection system a decade ago, it got a little bit lucky.

Disney, which had long experience with 3D attractions in its theme parks, happened to be trying to re-establish its animation studio with a CG feature, “Chicken Little.”

“We were looking for something that would differentiate it from all the other movies in the marketplace,” recalls Dick Cook, who was chairman of Walt Disney Studios at the time. “We thought that (RealD 3D) was a great opportunity to do it. And if it could kick off digital 3D around the world, then all the better. And I think it did just that.”

Response to “Chicken Little” was tepid, but RealD 3D got hot, becoming the dominant 3D system in North American’ theaters. In North America, RealD has 91% market share among 3D theaters, with more than 13,700 screens, and 36% of 3D screens worldwide use the RealD system.

Anthony Marcoly, RealD’s president of worldwide cinema for 3D says: “There are some people who will always see a movie in 3D, and some that aren’t interested in it. But the majority of moviegoers are in the middle so we have to make it as appealing and interesting for them as we can. That means releasing the right movies in 3D and making it the best experience we can.”

RealD By the Numbers
The company is entrenched as a key exhibition partner around the world.
13,776 RealD screens in
North America
27,716 RealD screens worldwide
2,633 RealD screens in China
91% RealD market share
in North America
36% RealD market share worldwide

Marcoly notes that moviegoers outside the U.S., specifically in China, choose 3D at even higher rates now than in North America. The format is popular in Russia and is all but a standard in China, where a film released without 3D is considered suspect by many moviegoers. That is a boon for RealD; China’s fast-multiplying cinemas are an important growth area for the company’s bottom line.

In China, 3D has never been a cheesy novelty or a joke. In the U.S., however, bad 3D and bad 3D films have beaten down the format’s reputation, and that has led to dips in 3D box office. With top filmmakers such as Ang Lee, Ridley Scott and Alfonso Cuaron working in 3D, though, its reputation has recovered, and grosses along with it. “Since ‘Gravity’ there has been a steady increase in 3D ticket sales” says Dave Hollis, exec VP of worldwide distribution for Disney, though he adds that the numbers have leveled off.

Mark Zoradi, CEO of Cinemark, also notes that there were complaints that 3D was too dark. “But RealD came forward and worked on those issues,” he says. RealD is used for demonstrations of High Dynamic Range movie content and extra-bright laser projection.

RealD’s strength in North America makes it sensitive to 3D performance among fickle American audiences. So in 2012, RealD returned almost $37 million in net profits, but by 2015, revenues declined by more than a third, even as RealD’s marketshare continued growing.

Now, after 10 years of 3D tentpoles and with 27,700 RealD screens deployed worldwide, the format is here to stay, and RealD seems to be on solid ground. Exhibitors and distributors alike still enjoy the revenue boost 3D provides. “3D continues to be an extraordinary part of our business,” says Zoradi, noting 3D is very important for summer action films and “even bigger in South America” than in North America.
In 2013 RealD launched Luxe, its own Premium Large Format package, which puts in direct competition with Imax. Luxe has 58 screens installed or announced for operations in Russia, Bulgaria and China.

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