What's Next for 3-D Cinema

Two big stories today on the new wave of 3-D releases...

I like the one in USA Today best. But there's also this Wall Street Journal piece.

A few good data points from the USA Today piece:

Of North America's nearly 40,000 screens, about 2,000 will be 3-D capable in time for Monsters— thousands less than [DreamWorks Animation CEO Jeffrey] Katzenberg predicted last year.

That means fewer chances to charge an extra $3 or more a ticket to see the atomic-age-inspired romp in all its extra-dimensional cheesiness — a premium that audiences have been glad to pay in the past for such movies as 'The Polar Express' and 'Journey to the Center of the Earth.' 'Monsters vs. Aliens' also will be available in standard 2-D on multiple screens at about 1,400 locations.

Katzenberg thinks that is enough to cover the $15 million or so the process adds to a film's budget as well as make a profit, especially given the recent surge in theater attendance. But he seems less concerned about whether 'Monsters,' budgeted at an estimated $165 million, conquers the box office than he is about 3-D taking over the planet.

Almost every movie would benefit from being 3-D, the way nearly every movie benefits from being in color," he says, though the format has been best served by animation so far. "When James Cameron comes forward with 'Avatar,' it will mark a whole new era of live-action films. When other filmmakers see what he has done, they will want to use it."

The WSJ piece misses the point that eventually, with 3-D displays in the home, that will create a nice "aftermarket" for all these 3-D movies the studios are making.

Last Week, This Week: CES & Sundance

1. A few last things worth reading about CES...

- Netflix CEO Reed Hastings talks about how his company's future hinges on integrating Netflix's streaming movie service into lots of new TVs, Blu-ray players, and set-top boxes.

- This NY Times piece summarizes some of the big trends from CES last week, including 3-D at home, Palm's new social networking phone, and Net-connected TVs.

- Variety colleague Ben Fritz and I were blogging last week from CES. I just posted some audio clips of a conversation I had with four studio home entertainment execs and some remarks that Jeffrey Katzenberg and John Lasseter made during the Sony keynote last Thursday.

2. Sundance starts this Thursday. The Journal offers a look at some of the films getting early buzz, and predicts a lukewarm year for acquisition action. The Salt Lake Tribune also has a look at what's different about this year's fest. Robert Redford seems perfectly happy to have a low-key year: "What might be a positive is that if there is less hoo-ha, less of a circus atmosphere," he tells the paper, "there will be more tendency to focus on what it is that we're really about, which is the independent filmmakers and the quality of the work."

3. And one more link... this NY Times piece is interesting because it is yet another article that suggests that the global credit crunch is slowing down the deployment of digital cinema and 3-D projection technologies to theaters.

D Cinema Finger-Pointing

What's this all about?

Warner Bros. is accusing theater owners of dragging their feet in the deployment of digital cinema equipment. (True - the biggest chains, including Regal and AMC, have yet to get serious about installing digital projectors.)

And the National Association of Theater Owners is accusing Warner Bros. of being slow to commit to the financial terms that will support future digital cinema roll-outs. (Probably also true... studios are notoriously stingy about how much they will pay for a film print, or how much their will pay as a "virtual print fee," which is essentially a toll for sending a digital movie to a digital projector, which helps pay for the cost of the equipment.)

Earlier this year, Jeffrey Katzenberg had also accused theaters of being slow in their shift to digital. DreamWorks, of course, is getting ready to introduce its first 3-D movie in 2009, 'Monsters vs. Aliens.' (Warner Bros. is the distributor for this month's 'Journey to the Center of the Earth.')

The studios, I suspect, are now feeling the complexity of releasing movies in both film and digital formats -- and probably won't start seeing real cost savings until digital distribution hits a certain volume level. That's why they're negotiating so hard on what they'll pay as a virtual print fee for this second wave of d cinema installations.

Who's Frustrated Now? Katzenberg.

In the early 2000s, it was director George Lucas who was persistently peeved at how slow theater-owners were to install digital cinema equipment; he wanted more screens to show 'Attack of the Clones' and 'Revenge of the Sith.' ('Phantom Menace' was shown on just four digital screens as a test, in 1999.)

Now, in the latter part of the decade, it's DreamWorks Animation CEO Jeffrey Katzenberg who is frustrated at how slow big multiplex operators have been to install 3-D digital projection gear. From Variety:

"In the last 30 days, things have not progressed as well as I had hoped, expected and, quite frankly, been committed to, by all the parties involved," Katzenberg said in response to an analyst's question. "It's ongoing as we speak literally now, but in terms of getting the big three (exhibitors: Regal, Cinemark and AMC) on board and actively moving forward, I feel as though things have dragged along, and it's been pretty disappointing."

Tensions are simmering on both sides of the issue, as the major studios and the top three circuits try to hammer out the size of the "virtual print fee" that studios will pay to distribute their pics digitally, which would be used to defray the costs of digital projector installations.

Katzenberg is hoping there will be 5000 3-D capable screens in the US by next March, when DWA will release 'Monsters vs. Aliens.'

YouTube Hearts TiVo ... Video Overload on the Net ... ShoWest Report ... And More

- YouTube and TiVo have gotten together to deliver YouTube videos to about 800,000 TiVo users who have the right box and the necessary broadband connection. TiVo has never shared any stats on how many of their users are getting content from the Internet this way (and likely won't, anytime soon). TiVo did an earlier deal with Brightcove; the new YouTube link won't be active until later this year, says the Wall Street Journal.

- Could video kill the Internet star? Here's a NY Times piece worth reading. Steve Lohr writes:

Moving images, far more than words or sounds, are hefty rivers of digital bits as they traverse the Internet’s pipes and gateways, requiring, in industry parlance, more bandwidth. Last year, by one estimate, the video site YouTube, owned by Google, consumed as much bandwidth as the entire Internet did in 2000.

- The LA Times offers a good overview piece of what has been happening at the ShoWest convention in Vegas this week... mostly excitement about digital 3D. Jeffrey Katzenberg was there plugging 'Monsters vs. Aliens,' the spring 20009 DreamWorks Animation release, and its first in 3D. Katzenberg says the extra cost is about $15 million; he hopes there will be 3000 to 5000 screens capable of showing 3D by the time it is released.

- Imax and Texas Instruments have apparently done a deal to use TI's DLP (digital light processing) chips in a new kind of projection system being designed by Imax. (It's not clear yet who will actually make the projectors.) The Hollywood Reporter writes:

Imax...has since its inception 40 years ago used 70mm film to distribute and exhibit movies. By converting to digital, it will dramatically change its business model as digital distribution removes print costs -- about $22,000 for a 2-D print and $45,000 for a 3-D print -- from the equation.

Imax's move to TI is a blow to Sony because Imax had been developing a digital system that employed two Sony 4K projectors and proprietary technology.

- I've been having a good time using Hulu in the beta test period. It helped introduce me to 'Arrested Development,' and I actually didn't mind going out to rent the DVDs of episodes that weren't available on the Hulu site. I also deepened my knowledge (and enjoyment) of '30 Rock,' a show I catch on TV only occasionally. I didn't mind the commercials; the one thing that occasionally bugged me was the fact that you can't store video on your laptop for later viewing (IE, put a show on pause, wait for the whole thing to stream, and then start playing). That makes Hulu tough to use with spotty Internet connections, or if you want to store a show while you're sitting in the airport and then watch it on the plane. (I tried.)

But on the whole, Hulu does a lot right... including allowing you to embed the videos anywhere.

Dan Carew, a blogger in Hong Kong, has a very different opinion, since users outside the US are barred from Hulu (likely because of NBC and Fox's distribution contracts in foreign territories.)

Here's the NY Times story on Hulu's launch.

HD DVD's Last Ditch Effort?

Today's news that Paramount and DreamWorks Animation will release movies in HD DVD only feels like a last-ditch effort to give HD DVD a leg up over Blu-ray...especially because financial incentives are involved, and especially because the exclusive agreement could be for as short as a year.

From Brooks Barnes' NY Times coverage:

...Paramount and DreamWorks Animation together will receive about $150 million in financial incentives for their commitment to HD DVD, according to two Viacom executives with knowledge of the deal but who asked not to be identified.

The incentives will come in a combination of cash and promotional guarantees. Toshiba, for instance, will use the release of “Shrek the Third” as part of an HD DVD marketing campaign.

In the Wall Street Journal, Sarah McBride writes:

The exclusive could be for as little as a year, according to two people familiar with the situation.

The studios won undisclosed financial incentives for exclusive commitments to release high-definition movies onto HD DVD only. A person familiar with the situation said the incentives included both cash payments and soft incentives such as marketing promotions.

...Prices for hardware to play each of the dueling formats are dropping. Toshiba HD DVD players are now available for less than $300, compared with about $449 for the least-expensive Blu-ray player. The combination of the less expensive players and the hot titles that will be available on HD DVD could help steer many consumers in that direction over the key holiday sales period.

Variety notes that as recently as March, DreamWorks Animation CEO Jeffrey Katzenberg had been non-plussed by high-def discs in general. Daniel Frankel and Ben Fritz write:

"Blu-Ray and HD DVD are a niche business," [Katzenberg] said in March on a conference call with Wall Street analysts. "They're not going to become the next platform. I think for the general consumer, there is not a big enough delta between the standard DVD in terms of where it is today and the next generation."

That's a far cry from the statement he put out on Monday: "We believe the combination of this year's low-priced HD DVD players and the commitment to release a significant number of hit titles in the fall makes HD DVD the best way to view movies at home."

NY Times: 'Top Directors See the Future, and They Say It's in 3-D'

If you are getting weary of reading so many articles about the second coming of 3-D, don't click here. But there's a good quote in this piece about 3-D movie production from Jeffrey Katzenberg, who has committed DreamWorks Animation to releasing all of its movies in 3-D, starting in 2009:

“I believe that this is the single greatest opportunity for the moviegoing experience since the advent of color,” Jeffrey Katzenberg, the chief executive of DreamWorks Animation, said in an e-mail message. “It has been more than 60 years since there has been a significant enhancement or innovation to the moviegoing experience.”

(I'd take issue with the 60 years comment... that leaves out stereo sound, VistaVision, CinemaScope, Cinerama, the original wave of anaglyphic 3-D movies, Sensurround, stadium seating, and cup-holders.)

Some trivia for you: in 1953, the peak year of the original 3-D boom, there were 23 movies released in 3-D, including 'House of Wax' and 'It Came from Outer Space.' (I'd be surprised if we see a half-dozen 3-D releases this year from major studios.) By 1955, there was just one movie made in 3-D.

DreamWorks Animation: First 3-D Pic Will Be 'Monsters vs. Aliens' in 2009

From Variety:

DreamWorks Animation CEO Jeffrey Katzenberg said the studio considered adding 3-D effects to some of its 2007 and 2008 releases but wanted to produce pics with the new exhib process in mind from the outset.

"We have not really been enthusiastic about turning 2-D into 3-D in post-production," Katzenberg said, referring to the way 3-D effects have been added to pics thus far. "It doesn't begin to touch the quality of product that is originated in 3-D."

DWA summer 2009 release "Monsters vs. Aliens" starts production this spring and will be made with 3-D in mind from the outset. Studio will produce two versions, with a standard version for nondigital screens, DVD and TV.

By waiting until 2009, studio will also benefit from a significantly higher availability of 3-D enabled digital screens.

"By that time, I think that in domestic markets we will be able to release a film entirely in 3-D," said Jim Tharp, prexy of domestic distribution for Paramount, which releases DreamWorks Animation pics.