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Thursday, January 7, 2010

What Does 3DTV Need To Do To Succeed?

I hated Avatar.  I thought it was boring, and I thought the 3D was just a gimmick that didn't add anything to the movie.  However, it's obvious that I'm in the minority.  It's made over a billion dollars worldwide (!!!) and is wooing and wowing audiences all over.  This could very well tilt the balance of 3D entertainment.

However, we still go back to the fact that I hate it and think that it's boring.  So now, as an analyst, I have to decide whether things I say about 3D entertainment are truly correct analysis or just my personal opinion.  Am I being cranky about it since I'm mad that Avatar is making so much money, or do I have legitimate concerns?  My opinion can't not enter into play, if you catch my drift.  Anything I read or see about new 3D displays is filtered through my personal opinion, so I'm going to lay out what I see happening with 3D and you can tell me if I'm being cranky or if I have legitimate concerns.

First, people like 3D.  That much is now established.  They liked it in the 50's too, but the complicated processes to make 3-D work both during filming and projection led to its downfall.  Now that its usage seems to be perfected through the use of digital film and computer technology, we should see a lot more 3D entertainment.  However, the question now becomes:  Do people like 3D at home?  There's virtually no media to show whether or not people will watch 3D on a regular basis at home.  Sure, 3D episodes of shows are popular, but those are one-off shots, not regular, day-in, day-out viewing habits.  Wearing dorky glasses that make you look like Rivers Cuomo is fine in a group setting where everyone's doing the same thing.  Will audiences be willing to do that at home?  It sounds silly, but has anyone ever really asked that question on a large scale?

Also, what led to 3D's downfall in the 50's?  They had to run two projectors in the theaters to display 3D properly, and if the projectors were even slightly off it would create headaches and eyestrain.  Here's where America's penchant for buying cheap crap comes into play.  You can explain the difference between a $300 HDTV and a $700 HDTV to a consumer for hours and explain why they need the better TV, but will that stop them from buying the cheap one?  Not really. Most consumers will crowd Walmart for a new Vizio TV instead of laying down the money for something slightly better that will cost them more.  A better HDTV might provide higher resolution, clarity, and contrast, things that are important, but most customers feel they can live with the slightly lower quality.  In 3DTVs, there's far less margin for error.  If a cheap 3D TV messes up the images even slightly, where are we?  Eyestrain, headaches and problems with people complaining about 3D.

So, cheap 3D TVs are a tricky proposition.  It will take a while for the price to come down to the point where everyone can purchase one.  Even now, the most popular HDTVs are the ones that are as cheap as possible.  If every HDTV had to be held to an extremely high standard, the price would be more and HDTV adoption would be much less than it already is, which is currently at a little less than 50% of households.  Let's wrap that up and put a little bow on it:  If people buy cheap stuff more often than expensive stuff, and 3DTVs will keep a high price point out of necessity, it'll take far longer for 3DTVs to become mainstream than HDTVs.

Here's what a lot of manufacturers are hoping for:  They're hoping that consumers who haven't yet adopted HDTV will skip right over purchasing an HDTV and go straight to 3DTV.  Is that a possibility?  Well, hand a consumer two choices.  Give them the brand new bright-and-shiny 3DTV that costs $3000 or the HDTV that costs $500, and see which one they'll pick.  They might want the 3DTV, but they'll end up going with the HDTV 9 times out of 10.  Why?  Because it's cheaper, and times are tough.

Here's where it becomes especially problematic.  You can watch an HDTV program on a standard definition TV and not have any problems.  Sure, it'll be in letterbox format, but you can still see the broadcast clearly, and even get a feel for the benefits of HD.  You can also obviously watch an HD program on an HDTV.  You CANNOT watch a 3D program on standard definition or high definition TV.  What does that mean?  Well, broadcast TV helped lead the charge for HDTV.  When shows like ER started broadcasting in high-def, it demystified the concept for the average user.  They understood that it was just the same as regular TV, just sharper and they needed a better TV to see the pretties.  In this case, broadcast TV no longer has the same effect as it once did, and most cable channels are finally getting around to doing HD.  The only way to go out of your way and watch 3D programming is by getting a 3D channel on your TV, but you can't view a 3D channel unless you have a 3D TV.  It's a chicken-and-egg scenario.

Now, where Avatar is so important is because it IS the egg.  It's the flashpoint where audiences are discovering that 3D is viable and cool.  After Avatar, TV manufacturers and TV channels don't have to do as much convincing explaining that 3D is cool, because the vast majority of people already understand that it is.  However, we're now going back to the question at the beginning:  3D is OK in the theater, but is it OK at home?  Do people want it in the house, or will they feel dorky and silly?  In other words, 3D is cool in the theater, but will it translate to the home?

Here's the next big issue: The movie industry has finally found their magic bullet to get butts in the theater.  Avatar is the biggest thing to happen to movies in a long time.  Will the movie industry be willing to lose its one big bargaining chip with audiences?  Think about it:  The movie industry has been haggling with audiences for a long time trying to get them into the theater.  That's where they make the bulk of their money from, with DVD sales providing a boost for movies that didn't do so hot in distribution.  The industry is also trying to stamp out piracy, and 3D may be the ticket.  I mean, if you film a 3D movie with a camcorder, you won't see it clearly, you won't get a good view of it, and it'll look weird and distorted.  Who would want to watch that at home?  Plus, a lot of people are going to the theater based on the premise of "I'm not going to be able to get the full effect of this movie by renting it so I should see it in the theater."  The movie industry has to be cackling with glee over this revelation.  Will they willingly let this brand-new advantage slide out of their fingers?

Let's put it all together.  Consumers like cheap TVs, so 3DTVs aren't going to sell as well since you can't make them cheap.  Early adopters and power users will be the ones who get them.  There will be some channels that broadcast 3D entertainment, but not that many since, once again, there won't be that many 3D users out there.  Movie companies may be reluctant to let their movies hit 3D Blu-Ray in an attempt to hold on to their money for longer.  They'll undoubtedly bank on this technology far more in order to make movies in the theater "events" instead of just "movies."

Meanwhile, the average Joe won't get what all the fuss is about.  Every time he watches a 3D program on his standard def or high def TV, it just looks blurry and the glasses don't work right.  Plus, he just spent X amount of dollars getting this new HDTV, and he'll be damned if he goes out and buys another one just so he can wear some glasses.  Our average Joe will certainly like 3D movies, and the one time he saw some sports in 3D it looked neat, but he can see everything just great in his HDTV.  Why switch?  Unlike HDTV, where the difference was palpable and unmistakable, 3DTV is a little more nebulous.  Sure, you can see things coming at you a little bit better, but besides that, what's the benefit?  

However, the major benefit actually comes down to one of the most immersive entertainments around:  Video games.  Imagine playing on your Playstation 3 and playing Modern Warfare 2 in 3D mode.  I get chills just thinking about it.  That's an experience that you cannot duplicate in the theater or anywhere else.  Remember, 3DTVs are not aimed at grandpa or grandma.  Those audiences simply won't be the primary users, and they'll be fine with their standard def TVs and digital converter boxes.  The aim of the 3DTV makers should be at the people who have the most disposable income and the most reason to upgrade:  Young male gamers.  They're used to looking like dorks anyway, since gaming implies a small measure of geekiness.  Then, once you've ensnared them, you can make inroads with other audiences and provide more TV and movies in home 3D.

So, if you're a TV manufacturer and you want 3D to become a big deal, what should you do?  Don't bother showing off 3D with reruns of The King of Queens or crappy concerts starring Taylor Swift.  Get young guys at a Best Buy to put on some glasses, pick up a controller, and see for themselves.  If they do that, I guarantee you'll have converts, and it could change the very nature of the gaming industry for good as well as tilt the 3DTV battle in their favor.  3DTV will still never take over the marketplace totally until they can replicate 3D consistently without need for glasses, but it's the surest way to give it the best possible shot.

So, how about it?  Was I too cranky?  Was I right on the mark?  Or am I just blowing smoke?