The Trade-Off: Why 'Avatar' Won't Spark a 3-D Bonanza

In the past week, 3-D has come to look like the greatest thing for the movie industry since talkies. Avatar, the lushest 3-D movie ever made, just passed $1 billion in global revenue. And the movie-theater industry announced that Americans spent $9.9 billion at the box office in 2009, up 10% from the year before.Yet there's a good chance that 3-D is nothing more than a Band-Aid for theatrical releases. In a few years, 3-D won't seem so special at all, and it will no longer be a reason to go see a movie.

%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% I've been watching this for a while. I went out to an early shooting day for Avatar and talked to Vince Pace, who invented the 3-D camera technology used by director James Cameron. As Pace told me that day, a 3-D movie like Avatar "is an experience people will want to pay for." Which, at this moment, seems to be true, judging from Avatar's numbers. (Although no one knows whether Avatar would've done just as well with only its 2-D release.)

Rise of the DVDs

The number of movie tickets sold every year has been pretty stagnant, around 1.4 billion, since 1997 -- which, not coincidentally, is when DVDs hit the market. As consumers installed digital stereo home theaters, they had less reason to go to movie theaters. Home theaters might not be as good as real theaters, but they're good enough that people have become more willing to make a trade-off: They'll give up some of the movie-theater experience for the far greater convenience of staying at home.

This has made Hollywood nervous. So it has now turned to 3-D, hoping to give consumers a cinema experience they can't get at home.

But 3-D might actually be the wrong answer. If theaters try to simply out-fidelity home systems, they'll wind up in a constant arms race against home technology.

'Not the Magic Bullet'

In fact, the biggest anticipated trend at the Consumer Electronics Show in Las Vegas this week is 3-D TV: Samsung, Panasonic, LG, Sony, and other manufacturers will unveil 3-D HDTVs. Not only will they play 3-D movies, but increasingly, we'll be seeing 3-D TV channels. ESPN and Discovery this week both said they'll launch 3-D networks.

In no time, 3-D movies will no longer be enough of a spectacle to draw people out of their homes. "3-D is a piece of the puzzle, but it's not the magic bullet," Mike Thomson, VP of operations at theater chain Malco, told me. Theaters will have to offer an overall experience that's different from home viewing, and one that doesn't necessarily compete against home theaters. Malco is one of many theater chains trying new ways to boost the cinema experience, such as offering waitress service, and featuring couches instead of traditional seats.

All in all, though, consumers are going to keep getting better experiences in their homes, and they'll increasingly make that trade-off -- and decide trips to the theater aren't worth the inconvenience. "I wish I could say the movie theater experience will never go away, but I'm not sure," says Jonathan Kuntz, a film history professor at the University of California at Los Angeles. "I'm not sure theatrical films will ever again be as significant as they were historically."
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