Are You Ready for 3-D in Your Living Room? Hollywood Can’t Wait.
3-D was a big buzzword at last year’s Consumer Electronics Show, and it’s even bigger this year.
It’s hard to find a TV manufacturer that isn’t showing off sets promising to let you replicate the “Avatar” experience at home. And programmers are promising to produce entertainment you’ll want to see in three dimensions. Sony (SNE), in particular, is making a big bet here.
But even if you believe there’s an audience for this stuff, the 3-D advocates have one big problem in front of them: Lousy timing. American consumers are finishing the end of a major TV replacement cycle, which means it will be some time before they’re ready to plunk down big money again for new screens.
If you want a reality check on 3-D’s impact on consumer electronics and the entertainment industry, check out this brief interview I conducted with DreamWorks Animation head Jeffrey Katzenberg yesterday (apologies for crypt lighting and distracted camerawork–you can at least hear him, though).
Katzenberg is definitely a believer–his studio just announced that all of its future releases will be available in 3-D–but even he thinks it will be “a ways down the line” before DreamWorks (DWA) sees a lift from the sale of 3-D DVDs.
Katzenberg, along with Disney’s (DIS) Bob Iger, can afford to wait a bit for the 3-D boom because both studios cater primarily to families who are still buying DVDs, even if those numbers are dipping.
The rest of Hollywood will be more impatient. The industry depends on home video for a large part of its revenue and an even bigger slice of its profits, and those sales have been dropping off dramatically.
The high-def Blu-ray format was supposed to spur consumers to buy more discs, but it took years for the industry to settle a costly format war, and Blu-ray is only now starting to get a little bit of traction. The studios can’t wait that long for 3-D to take off.