Issues around 3D in the entertainment sector need to be addressed in order to ensure stable growth of the technology across different screens: movie, TV, mobile and video games.
This is according to consulting company PricewaterhouseCoopers (PWC) which says the opportunities and possibilities for 3D continue to generate great excitement within the entertainment industry, with many companies predicting increased revenues from 3D.
However, the company says, in businesses' attempts to make money and adopt 3D universally, the industry must ensure that it continues to deliver high-quality content. “If the quality drops, so does consumers' enthusiasm for 3D and their willingness to pay a premium for the experience.”
In line with this, PWC released a report titled '3D Here and Now... A goose that lays a golden egg?' which presents the progress that has been made over the past year in 3D entertainment.
On the big screen
The report says eight of the top 20 grossing films in the first eight months of 2010 were 3D, compared with three in 2009 and one in 2008.
These statistics unequivocally confirm the progress of 3D in the entertainment market, says PWC. “Despite the excitement around 3D entertainment, however, industry players run the risk of killing the golden goose by overselling and, in some cases, overpricing the 3D experience,” it adds.
According to PWC's report, 50% to 70% of box office revenues are generated by 3D, which has helped the entire industry to increase revenues despite a decline in ticket sales.
Commenting on the report, South African entertainment and media industry leader for PWC, Vicki Myburgh, says: “3D films generate two to three times the revenue of 2D theatres, giving theatre operators a powerful incentive to change to the new technology.”
She adds that converting from traditional prints to digital is a big expense but once a theatre employs the digital technology, the transition to 3D is relatively easy and inexpensive.
“From the studio and audience perspective, more 3D theatres are required to cope with the bottleneck, which occurs when too many 3D films are released at once,” she says.
Industry experts agree that a typical cinema requires a minimum of three screens dedicated to 3D, she points out. “However, some cinema owners are converting all their screens at once because failure to do this could result in falling revenues.”
Myburgh says the reality is that a 3D film must be good to generate strong sales. “In the DVD and theatre market, consumers are willing to pay a premium for a superior product and the abundance of less-than-thrilling products can dilute the overall excitement about 3D.”
Quality 3D films are important to protect the ticket premium, otherwise 3D will be limited to animation and horror movies and remain a niche market, continues Myburgh.
In the lounge
According to PWC, while theatres and DVD markets are progressing in the right direction, the market for 3D television is less mature.
“The report reveals that the success of the 3D television market hinges on four factors: the affordability of 3D TV sets; the availability of attractive 3D content; a sound business model for TV channels; and the viability of end-to-end 3D broadcasting.”
Myburgh says despite the fact that the premium consumers pay for a 3D set is not as extreme as the premium paid for HDTV, consumers are not responding to 3D television as quickly.
“Economic conditions and the relatively recent acquisition of flat screens may explain the lack of customer eagerness for 3D television.”
One positive factor for consumers, she says, is that fierce competition among manufacturers is driving down the price.
Games room
Gaming experts believe there is a strong fit between video games and 3D, says the PWC report. “However, gaming studio executives are more sceptical.”
According to the report, the positive view notes the strong fit between 3D immersion capability and the demand for immersive game play; that many gamers are early adopters of new technology; that there are very limited incremental production costs; and that 3D-capable gaming consoles already exist.
“The more cautious view emphasises that hardcore gamers are more interested in the story than the technology that accompanies it and the best-selling games that dominate the market are not available in 3D,” PWC says.
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