3D Films Already Running Out Of Steam

Over the last few years, and particularly since Avatar hit the big screen seven months ago, display manufacturers and the film industry have been yammering to anyone that would listen that 3D technology is The Next Big Thing. Investors and analysts have cautiously warned against embracing the concept that 3D would reinvigorate theaters and profit margins; new evidence suggests consumer interest in 3D films is falling much more quickly than previously expected.

A recent story from Slate dug into revenue data from multiple angles; its finding aren't encouraging. First, let's examine how much of a film's revenue came from 3D theatres during its opening weekend.

If we exclude Step Up 3D and Pirhana 3D, both of which opened in a higher percentage of 3D-equipped theatres, the trend is clearly downward; from Avatar to Incredible Me 3D cinemas fall from generating 71 percent of opening weekend earnings to just 45 percent. This graph doesn't necessarily say much about consumer demand; a fact 3D backers have been quick to point out. When tackled from other angles, however, the available information looks just as bad or worse. When Avatar debuted, a theater owner who upgraded a 2D showing to a 3D showing would have earned himself an additional 70 percent in profit. A theatre owner considering the same tactic when screening Despicable Me would have increased his profits by just 2 percent.

Considered over a longer period of time, even Avatar's rate of return for 3D vs 2D is pitiful.

Graph courtesy of Slate: Put in context, Avatar doesn't even match Beowulf

We recommend you read the whole story if you're interested in the 3D industry; it's an excellent piece. If the trends discussed above continue, 3D films may continue to serve a niche audience of kids, IMAX fans, and a handful of dedicated enthusiasts, but they'll never take over as the dominant medium. Things could change—the above trends could reverse—but if historical precedent is any indication, they won't.

All Of This Has Happened Before. And Before. And Once Before That.

When most people think of 3D movies they think of the corny films from the 1950s. While it's true that the 1950s represent a sort-of golden age for 3D films, the first stereoscopic movie was actually shown in 1922, nearly 90 years ago. 3D film technology slowly improved over the next 25 years, but the format didn't find mass market acceptance until 1952. From 1952-early 1955 a number of excellent 3D films were released, but the genre suffered from low-quality viewing conditions, misaligned frames (which could cause headaches) and the need to keep both prints in pristine condition. After the craze fell off the technology again went mostly dormant.

New single-strip 3D surfaced in the 1970s, but was used in just a handful of movies, almost all of which were hardcore porn, softcore porn, horror, or all three. Although a limited number of films were made, this period is typically seen as a 3D revival. IMAX revived the use of 3D in the mid-1980s; it was mostly used for specialty shows at places like Disneyworld or in IMAX's various film productions. That brings us up to 2004 and the release of The Polar Express, shown on the graph above.

In every case, consumer interest in 3D viewing has waxed and waned in a manner of years. Each time 3D has surfaced the technology has been substantially better—a fact that's never prevented the style from sinking back to obscurity a short time later. Despite considerable advances, there's still a significant percentage of people (including myself) who either have vision defects that prevent them from seeing 3D properly or suffer from extreme nausea when attempting to view a film.

Studios have fallen all over themselves to charge premium pricing for 3D films, while theatres, not content with ripping off patrons with $9 tickets and $30 popcorn, tack on a $3-$6 charge of their own. We don't know anything about pricing on 3D Blu-ray films as yet, it's virtually certain that they'll be positioned, at least initially, as higher-priced premium versions of a movie.

Furthermore, Not all 3D films are created equal (Clash of The Titans was particularly bad). This indicates that studios are already adopting 3D as a way to potentially boost sales and make a few more bucks without actually bothering to create a decent-looking movie. We're not alone in seeing such half-assed conversions as a threat—James Cameron has expressed concern that lousy "2.5D" movies could sink the format.

Television manufacturers have it pretty easy. Even if consumers never charge out to buy 3D screens en masse, they'll continue to replace / update their televisions at a regular rate. Once 3D technology is ubiquitous enough, anyone buying a new TV will be buying a 3D TV. The movie industry has no such luxury—if consumers stop filling 3D theaters and buying premium 3D movies, the golden goose will turn to lead in a hurry. Based on what we're seeing now, that day may be closer than anyone thought.