3D: Not dead, but headed for a niche

The New York Times has an article about the back-to-back poor boxoffice performance of 3D versions of "Pirates of the Caribbean: On Stranger Tides" and "Kung Fu Panda 2". "Pirates of the Caribbean" only sold 47% of its tickets in 3D, and "Kung Fu Panda 2" only sold 45%, even though both movies were heavily promoted as 3D titles. In fact, 3D's share of boxoffice revenues has been declining almost since "Avatar" left the theaters. Audiences are getting tired of movies that were originally shot in 2D and then poorly converted to 3D (like "Clash of the Titans" and "Thor"), along with the low brightness, glasses and headache-inducing qualities of 3D as shown in most theaters, and, perhaps most importantly, the steep ticket prices.

As the New York Times points out, the movie studios have a bumper crop of 3D titles coming out this year, and the industry has become dependent on 3D's higher ticket prices to try to compensate for declines in DVD sales and the failure of Blu-Ray to pick up the slack. It now appears that 3D isn't the "Hail Mary" pass that the movie industry was looking for.

That doesn't mean that 3D is dead, but it does mean that the studios will have to become a lot more selective about the movies they release in the format. 3D needs to be reserved for "event" movies that can truly take advantage of the effect--the novelty of 3D for its own sake has worn off. Studios also have to drop 2D to 3D conversions; the audience has caught on, and we're rapidly approaching the point where it will cost more to do the conversions than the incremental revenues that movies will earn with 3D.

The studios also have to, once and for all, get over their spending addictions. DVD sales underwrote a wild period of production and marketing cost escalation, but since the Great Recession, the studios have been looking for replacements for DVD revenues like crack addicts looking for a fix. It's time for the studios to go into rehab. Average production costs of $150 million or more have got to drop to more reasonable amounts. The studios can easily afford 3D becoming a niche format for special events, but only if they bring their spending in line with market realities.

3D won't help Sony escape its competitors

Sony introduced a slew of 3D games at E3. Existing PlayStation 3 consoles are already 3D-compatible, but to play 3D games, you need a 3D-compatible HDTV. Sony's logic is that 3D games will drive the sales of its 3D HDTVs, thus increasing overall corporate revenues. The only problem is that Sony isn't the only player in 3D HDTVs. Next week, Vizio, one of the leaders in low-priced HDTVs, will demonstrate two 3D HDTVs at the CES line show in New York City. One model will have a 55" active 3D display with Bluetooth-enabled 3D glasses and a 480Hz refresh rate; the other model will have a 65" passive display and use simple polarized lenses for the 3D effect.

Sony's goals with its 3D initiative are to spur a new wave of consumer electronics sales, and to insulate itself from competition. It may accomplish the first goal, but it's not going to escape the competitors who are plaguing it in the HDTV and Blu-Ray markets.

2D to 3D: "Colorization" for the 21st Century?

Now that 3D is the big (but potentially transient) craze, there's tremendous pressure on film producers and distributors to release all their new films in 3D, whether or not they were shot that way. The recently-released remake of "Clash of the Titans" was shot in 2D, and then hurriedly digitally converted to 3D in an eight-week process. As widely reported, the results were far from impressive; most reviews said that the characters and creatures looked like 2D cardboard cutouts layered in front of the background.

Both James Cameron and Michael Bay have spoken out against converting 2D films to 3D, saying that the to-date dismal results of the conversion process could kill off audience interest in 3D. However, there's no sign that the industry is paying much attention to their cautions. In fact, there are plans to convert the entire Star Wars series to 3D for reissue, as well as a host of other films and even television shows.

It reminds me of Ted Turner's efforts years ago to colorize a library of black and white films he had acquired from MGM and Warner Bros. Turner faced blistering criticism but pressed on, saying that there was no market for black and white films on television or home video. However, his own Turner Classic Movies, as well as TV Land and other cable channels, showed that there was still a big audience for black and white movies and television shows.

The 2D to 3D craze reminds me a lot of colorization: It's expensive, it doesn't work very well, and lots of people are complaining about it. It's likely that 2D to 3D is also going to have much the same life as colorization. Within a year or two, producers and distributors will realize that conversion isn't the way to go, and that 2D isn't so bad after all.