Over cinema’s first century, 3D films were like 17-year cicadas. They’d burst on the scene, make a lot of noise, then disappear for years at a time.
Director James Cameron sums up the company’s impact in strong terms. “RealD was to the 3D movement in cinema what Kodak was to film,” he says. “Honestly. I don’t think you can state it any less than that. They were the pioneers.”
|“RealD was to the 3D movement in cinema what Kodak was to film.”|
DreamWorks Animation CEO Jeffrey Katzenberg concurs. “They were, they are, and they continue to be essential,” says Katzenberg. “They were there at the very beginning, investing in and perfecting the technology, constantly innovating to deliver what at the time was an unprecedented, quality experience.”
RealD is the dominant 3D system in North America and a major 3D player worldwide, and its history is intertwined with the format itself. But the company is reinventing itself in ways that could free it from the vicissitudes of theatrical box office. Having recently taken itself private with a new investor, it’s moving beyond improving 3D in theaters to upgrading images on all screens.
“Our overall goal is to make the visual experience better on every device that you come in contact with,” says RealD CEO Michael Lewis (pictured). He says RealD has developed backlight technology for consumer devices and has a consumer electronics partner, though the deal has yet to be announced. RealD is also putting “a lot of investment” into glasses-free 3D television, says Lewis, who hopes to bring it to market in the long term. “We’ve always felt (3D TV) needed to be glasses-free,” he says. He predicts another wave of 3D TV tech will arrive in about five years.
|“Avatar,” from Fox and James Cameron, and “How to Train Your Dragon,” from Jeffrey Katzenberg’s DreamWorks Animation, thrived in 3D in theaters.|
“The time that I enjoy the most is when we’re showing new technology and people are really blown away. We were able to do that early in our company’s history. We think it’s really important to continue that, because what we did five or 10 years ago is not what we want to be doing today or tomorrow.”
Lewis started RealD in 2003 with Joshua Greer and in 2005 acquired 3D pioneer Lenny Lipton’s company, StereoGraphics, which had developed an improved method for projecting 3D. That became the RealD system. RealD built its success on both projection tech and an unusual business model. It didn’t ask exhibitors to buy RealD gear; instead, it asked them to install RealD and split the up-charge on 3D tickets.
The downside of that model has been that RealD’s financials rise and fall along with 3D box office receipts. That dependence on grosses proved problematic after the company went public in 2010. Wall Street, says Lewis, didn’t understand the technologies RealD was investing in and investors weren’t comfortable with its fluctuating numbers.
Even as the company faced hostile takeover bids, summer 2015 provided a hopeful sign for 3D in the U.S. market, says Lewis. “All eight of the releases that got released in 3D and RealD did north of 40%. So that’s the first time that ever happened.” Meanwhile, 3D has been a smash in China, providing eye-popping growth in that nation’s booming film market.
Still, in late 2015, RealD took itself private again, making a $551 million deal with Rizvi Traverse Management. Lewis expects the new structure to buy time for RealD to “do the things we think are important.” That means new inventions. The company’s R&D facility in Boulder, Colo., continues to push the outfit into new territory, spanning production, theatrical exhibiton and consumer electronics. (RealD has nearly 1,000 patents, Lewis says.) Its TrueImage process is improving digital images for filmmakers working in 2D and 3D alike.
In 2013, the company launched Luxe, a Premium Large Format system that puts it in competition with Imax, and theatrical 3D remains the company’s core, says Lewis.
“We have 28,000 screens,” he says. “We see a continued opportunity in places like China, so we’ll expand in that market. We will continue to improve the overall platform. We’ll work with filmmakers to improve the experience on their side. The combination of those things, we think, will provide growth to our core business.”