Success of 3D movies in the past
It was promoted as the "The Miracle of the Age!!!" or a "lover in your arms". The first full-length 3D movie in 1952 tried to fight back the success of television which has become a part of American living- rooms which was a reason for diminishing cinema audiences in the decade after the Second World War. Director Arch Obler's movie about man-eating lions generated a "golden age" in 3D technology, although the critics condemned it and the audience did abandoned it eventually. Many of the upcoming movies were of the horror genre and even Alfred Hitchcock tried the new format shooting "Dial M for Murder" in stereoscopic form without ever showing this version. In the 1980's more horror movies such as Jaws 3-D, Amityville 3-D and Friday the 13th Part III were released and proofed the unsuccessfulness of 3D featured movies again which led to their absence for almost two decades.( http://www.independent.co.uk/arts-entertainment/films/features/3d-cinematic-revolution-or-just-a-trick-of-the-light-1925400.html) In 2008 the big studios tried the establish 3d movies again which has been quite successful ($240 million box office) but only Avatar in 2009 helped the new technology to finally become popular and the 'miracle" studios expected it to be. Hence more and more movies are produced or post-produced in 3d.
With estimated production cost of $500M ( including marketing with $150M though) Avatar started in over 2,500 3d screens all over the USA. Avatar was the first movie that has been shot with the new 3d technology from the start on. This is one of the reasons for higher production cost. It also is adherent a much higher risk because in the beginning it was not certain how many screen were going to be upgraded to actually show Avatar in 3d. James Cameron himself said that "This film integrates my life's achievements. It's the most complicated stuff anyone's ever done."
(http://www.newyorker.com/reporting/2009/10/26/091026fa_fact_goodyear#ixzz0kEPHwMpj) This quote shows the huge complexity of the movie which cost him all together 15 years of his life. ( He wrote the script in 1994)
Proportion of 3d movies
Due to the fact that 3d movies got widely accepted by the audience an increasing number of box office sales falls upon those movies using an advanced technology.
There are several reasons why it seems that 3d movies overall earn more money than traditional movies.
- Ticket prices: Due to higher ticket prices, box office sales seem higher even if less people went to the movies. 3D movies get higher revenues because of premium ticket prices- Sometimes up to $18 in some areas in the USA.
- Rising number of customers: Despite the aforementioned fact that ticket prices adulterate the actual success of a movie, 3d movies do attract more customers than conventional ones.
According to the New York Times "More than 20 3D movies were released in 2009 - including the blockbuster hitAvatar- and this propelled a boost to $1.14 billion of 3D ticket sales in 2009, from just $240 million in 2008" which shows the enormous increase of sold tickets for 3d movies. Unlike tickets for traditional movies that exist for many years, 3d movies are still between the introduction and the growing phase of the product lifecycle. Hence it is attracting more and more customers. Although there is a slightly distinct situation as 3d movies already partially bring in more money than traditional movies. Therefore it is hard to determine where exactly in the product lifecycle 3d movies can be seen. If one assumes that it is between the introduction and growing stage prices are still high and it is tried to attract customers. Normally there is no pressure for profit yet which again is different in this case. Studios invested a huge amount of money for immediate profit generation. It also differs from the fact that only a limited number is available due to a small number of distribution channels. In fact, more and more cinemas are being upgraded to show 3d movies. In the growing stage normally competitors enter the stage and prices fall. As a matter of fact even smaller studios outside the circle of the big five will try to produce 3d movies if they seem to be successful in the long-term. As soon as producing them gets cheaper more studios will have the opportunity to be enter the market.
In total 2009 was an extraordinary successful year for the studios. 1,42 billion people went to the cinemas which is the highest value in the last 5 years. (spiegel)
This rapid growth and new record shows the massive eagerness audiences continue to have for great and enjoyable films.
The role of the IMAX group
The IMAX Corporation is "an entertainment technology company, specializing in motion picture technologies and large-format film presentations" ( Imax.com, 2010)
Within the last years the group was struggling with decreasing box office sales and a declining audience. That can be seen in the graph below which clearly shows the decrease and stagnation between 2005 and mid 2008.
It is also evident that turnover started to recover in mid 2008 and still keeps increasing.
A similar evolution can be seen in the following graph which demonstrates the Share price performance previous 3 years of the IMAX Corporation.
After a weak 2007 and its lowest share price in 2008, just after the global crisis struck, it also started to recover and almost quadrupled until December 2009.
One of the reasons undoubtedly is the enormous success of block-buster " Avatar" which became the highest grossing film in IMAX history. It is obvious that there is a direct correlation between its release date on 17th of December 2009 and the boosting share prices in the same month.
According to the IMAX group Avatar worldwide earned more than 125 million until 21.02.2010. This conducts a huge increase compared to the previous high grosser Batman: The Dark Knight which earned 41.3 million. (http://www.imdb.com/news/ni1630362/)
Therefore, the new technology is an essential factor for the new success of the IMAC cinemas after years of financial underperformances. The gross operating profit almost doubled and grew from 55 mio in 2008 to 100,1 mio in 2009 according to the annual report of the group. (http://www.advfn.com/p.php?pid=financials&btn=annual_reports&qkbtn=&qksymbol=NASDAQ:IMAX&mode=quarterly_reports&symbol=NASDAQ:IMAX&istart_date=59)
Many people, working for the industry also expect a further rise in sales within the next years as well they anticipate the new technology to prevail
IMAX cinemas will get more important as they will stand for an own experience which justifies higher ticket prices than for 2D movies in traditional cinemas. whereas digital 3d cinemas and Imax cinemas almost offer the same price as the following table shows ( prices for adults in standard categories on 15.03.2010)
Although ticket prices for Imax and digital 3d cinemas are almost the same, the huge success of Avatar and Alice in Wonderland led to an increase of ticket prices in the Imax cinemas to $20 in the end of march 2010. (http://celebrifi.com/gossip/IMAX-3D-Theaters-Increases-Ticket-Prices-Avatar-To-Blame-1989577.html)
The Wall Street Journal states that "At some theaters in the northwest, adult admission is rising to $11 from $10 for a conventional film, to $15 from $13.50 for a regular 3-D showing and to $17 from $15 for Imax 3-D." This is due to the fact that going to the movies gets popular in general so that cinemas also can set prices higher for conventional films.
Hier nochmal Ticket increasing anschauen!!
As justification for higher prices can be mentioned the screen which is four times bigger (588m) than in traditional theatres. The audience normally sits very close to the screen which leads to the feeling that the screen is almost surrounding them.
IMAX screens are sized to fill your field of vision.
Imax cinemas also are able to show 3D movies using bothpolarized glassesandLCDshutter technology.
How does 3D technology exactly work?
First of all, the binocular vision system is based on the fact that the eyes of a human being are spaced 5 cm apart. Consequently each eye sees the picture from a different angle. At the same time the binocular vision system in a brain is using the difference to calculate the distance. The brain also has the ability to show a relationship between those images even though they are slightly different. The brain can choose objects in the two scenes and work out how far an object is between those images.
The reason for wearing 3d glasses is to provide different images into your eyes. The movie screen in fact shows two different images and the glasses cause one of the images to go into one eye and the other one to enter the second eye. There are two widespread systems of doing it
- Polarization: The majority of the big studios such as Disney or Universal the first choice is polarized lenses for the glasses because they allow colour viewing. Two synchronized projectors project two individual views onto the screen, each with a diverse polarization. The glasses only let one of the images to enter each eye because they hold lenses that are polarized as well. This is comparable with the polarization of sunglasses.
- Red/Green or Red/ Blue. Since polarization cannot be used on a traditional TV screen ( unlike on upcoming 3d Tvs which will be dealt with later on in section XYZ) the red/green system is used. Again 2 images are displayed on the screen, one in red and one in blue/green. The filters of the glasses only allow one picture to enter each eye. The brain has to correlate those pictures as aforementioned. It is not really possible to use a normal colour movie when using those glasses which makes the image quality far poorer than the polarized one.
- There also is the possibility of rapidly showing two alternate images one right after another. Special LCD- glasses obstruct the vision of one eye and then the other one in fast sequence. This technology allows colour viewing on a normal TV if certain equipment is provided. One weakness is the high price of the equipment needed.
3d technology in home cinemas
Even the small screen is getting in on the act: the first 3D TVs from electronics giant Samsung go on sale in the UK within days, having already been launched in the US. Panasonic and Sony are to follow by the summer. 3D sport is being pushed. It is estimated that by 2011 one in 10 sets sold will be 3D-ready. DreamWorks' chief executive Jeffrey Katzenberg has already called the development "as important as the introduction of sound or colour".
After evaluating all the aforementioned data and facts a non-ambiguous forecast is barely possible due to the newness of the topic. Since 3D movies just started to become popular and showed its' potential with the worldwide blockbuster Avatar is may be the start into a new era of movies. Like former revolutions of cinema such as introducing sound and later on colour people might get used to this new cinema experience. This would lead to increasing ticket sales which are necessary for the studios since shooting 3D movies is far more cost intensive than doing it the traditional way. Even if studios produce a movie in a traditional 2d way and only want to turn it into a 3D experience afterwards, estimated costs are between $8M and $15M and still providing a far worse 3D experience than movies like Avatar which has been shot in 3D from the beginning.
On the other hand critics state that 3D only is a trend, just something new and exciting for a short period of time which will disappear in the near future. Trends like certain genres that became successful for a few years and then almost completely vanished from the screens are hold as an example. Those genres were the horror films in the 70's , the patriotic and not very intellectual challenging action movies in the 80's ( such as Rambo, Die Hard etc) and the romantic comedies in the end 90's ( e.g. American Pie). Those genres have been very successful for a while until the audience got bored of it and lusted for a change in the movie landscape. Henceforth this is one of the biggest fear of the studio and they try to work on solutions and an increasing customer loyalty to 3d movies.
Although the amount of movies published in theaters dropped by 12% last year, 3D technology could change the film industry forever. However it is doubtful that these box-office numbers can remain as high, especially since Avatar was arecord-breakerandcompetition will be severe. (http://www.businessinsider.com/3d-films-helped-boost-the-box-office-2010-3#ixzz0kKhaRJBI)
A SWOT analysis will help to determine and evaluate possible opportunities and threats as well as current strengths and weaknesses of 3d featured movies.
- Still Competitive Advantage over Home cinemas at that price level.
- Customer complaints about "annoying glasses", "dim colours"
- Ticket prices still very high compared to conventional movies
- No 3d effect for half- blind people
- Uncomfortable for wearer of glasses since they have to wear the 3d glasses on top
- 3d effects can lead to dizziness, headaches or nausea
- Only one size of glasses
General findings of a survey, published in 2005 by opinion dynamics corporation already showed some curious facts on 3d cinema and its likely success in the future:
Opinion Dynamics Corporation conducted research on this issue on November 29-30, 2005, with 900 adults in the United States. Findings are as follows:
- Twelve percent, which is representative of about 26 million American adults, say they would go to the movies more often if there were more feature-length 3D films. Another 6% (13 million adults) say they would go more often, depending on the films being offered in 3D.
- Fourteen percent (over 30 million American adults) say they would be willing to pay $2-3 more to see a feature-length film in 3D, while an additional 6% (or 13 million) would pay more depending on the films being offered in 3D.
- Consumers are somewhat split over the type of 3D effects they might enjoy the most. Over one-third (37%) say they prefer effects that appear to come out of the screen at them, while 31% say they prefer 3D effects that give better depth to the images on the screen.
- Nearly half (48%) of American adults say they have seen a 3D movie (of any length or type) before. One in five (22%) has seen a 3D movie at a regular movie theater, 19% have seen one at an IMAX Theater, and 7% have seen 3D movies at both types of theaters.