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Analyst: 3D Movie Tickets Too Expensive

12 Jul, 2010 By: Erik Gruenwedel

Despicable Me

While Universal Pictures scored a much-needed box office hit last weekend with Despicable Me, which grossed $56.4 million, the animated feature generated just 45% of revenue from 3D screens, the lowest percentage for a 3D release this year.

The results point to the possibility that consumers think not all movies are worth paying a premium for a 3D experience, which could affect ongoing early rollout of 3DTVs, compatible Blu-ray Disc players and 3D movies.

Richard Greenfield, analyst with BTIG Research in New York, argues that theater operators and studios risk alienating increasing numbers of moviegoers from the 3D format by charging high ticket prices.

In a survey of 2,600 consumers, Greenfield found that 77% of respondents believe the average $4 premium for a 3D ticket (compared to 2D) too excessive, including about 37% who said they would not pay extra to see a movie in 3D. More than 80% of respondents said they had seen a 3D movie.

Greenfield conducted the survey in advance of the July 15 initial public stock offering (IPO) for Los Angeles-based RealD, which licenses 3D technology to motion picture exhibitors, in addition to its side-by-side technology (allowing for 3D images to both the left and right eye) to stream content into a single channel to any 3DTV.

RealD offers theater operators free 3D upgrades to existing digital projectors in exchange for a 40 cents to 50 cents license fee per moviegoer, according to Greenfield. The studios and RealD subsidize the cost of theatrical 3D glasses.

“It is pretty clear from the [respondent] comments that they are not happy with the movie exhibition industry and are clearly differentiating between paying ‘up’ for movies like Avatar vs. less exciting, lower quality movies,” Greenfield wrote in a post.

About 60% of respondents said they hadn’t seen a 3D movie in the past three to six months, while another 26% last saw a 3D movie in the previous week-to-30-day period.

The analyst said consumer awareness of Imax theaters was high (98%), compared with RealD (2%), with 60% of respondents indicating they had never heard of RealD and another 10% saying they thought RealD was related to the 3D glasses they used to watch a 3D movie.

“We suspect most people do not understand what is needed/required to make a movie theater 3D capable,” Greenfield wrote.

Indeed, movie critic Roger Ebert implored moviegoers to watch Despicable Me in 2D, calling the 3D release “more dim” than it should be.

“If you see it in 3D, check out the trailers online to see how bright and cheery it would look in 2D,” Ebert wrote online. “How can people deceive themselves that 3D is worth paying extra for?”


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