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TOPIC: 3D PRICING

3D PRICING 13 Jul 2010 23:24 #34373

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Analyst: 3D Movie Tickets Too Expensive

By : Erik Gruenwedel | Posted: 12 Jul 2010
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While Universal Pictures scored a much-needed box office hit last weekend with Despicable Me, which grossed $60.1 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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Re:3D PRICING 13 Jul 2010 23:43 #34374

The main reason Despicable Me had such a low gross from 3D screens was due to a lack of 3D screens. Toy Story 3 still had many of them tied up with their 4 week minimum distribution agreements. Even some of the other threads here pointed that out. Fewer 3D screens will logically result in a lower percentage of gross revenue from 3D.
Last Edit: 13 Jul 2010 23:46 by About Entertainment.
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Re:3D PRICING 14 Jul 2010 10:39 #34376

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I was shopping yesterday at our local regional mall which has a 14 screen complex within it and stopped to talk to the manager. We were standing next to the boxoffice and I could observe the sales. This theatre charges all seats $7.00 (and for 3d all seats $10.00) until 6 PM when the price becomes Adults $9.00/Child $7.00 (but again add an additional $3.00 for 3D)

It was 12 Noon and the first matinee of Despicable Me was scheduled to start both in 3D on one screen and 2D on another about 10 minutes later. I counted 17 people who bought to Despicable. It was all parent or parents with two to three very young children (ages 5-7) in tow. NOT ONE OF THEM OPTED FOR 3D. All tickets were sold for the 2D screen. It certainly appeared to me that parents were not going to spend that extra money on small children - especially if they had three or four of them.
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Re:3D PRICING 14 Jul 2010 11:19 #34377

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That is correct. At least 25 locations in my area that I am aware of only had 1 3d screen and were s. till playing TS3. Plus those that have multiple screens were only playing it in 1. The largest theater in our area has 5 3d screens and had the following allocation: Toy story 3-2, Airbender - 2, and Despicable Me - 1. The opening weekend prediction on Despicable Me was only $30-36 million and therefore was not allocated many screens as well based on that.
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Re:3D PRICING 14 Jul 2010 23:14 #34378

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Some stats I've seen on a national basis have been:

5/31/2010 NATO release: 2,934 theaters with 4,810 3D screens in N. America

7/1/10 Hollywood Reporter article: ~5,200 3D screens in the US

Most recent screen counts that I've seen for the 7/9-7/11 weekend:

* Despicable Me: ~1,551 3D screens
* Toy Story 3: ~2,100 3D screens
* Airbender: ~1,606 3D screens

Using rough screen counts from Box Office Mojo and some other industry sites, the above math works out to ~5,257 3D screens in the US over the most recent weekend.

RealD's public financial filings with the SEC cite 3,385 RealD screens in the US at the end of the January-March quarter. With their oft quoted "75% market share" in the domestic 3D market, that would peg about ~4,500 or so in total in the US at the end of March 2010. With Regal starting up their DCIP upgrades during mid/late April, having ~5,200 3D capable screens industry-wide as of July 2010 seems to foot fairly well with the RealD data that has been published in relation to their IPO.

Also, I don't know where the BTIG guy is getting a $4 premium for 3D surcharges...no one out side of IMAX is charging more than $3.50, even in major metro areas like NYC/Chicago/LAX. Now I know that all of the chains have debuted (or are preparing to debut) proprietary widescreen formats (Cinemark's Screen XD, Regal's RPX, AMC's ETX, Carmike's BigD, Marcus' UltraScreen), but that isn't necessarily 3D, plus you are paying for a more premium experience, so any incremental charges above the base $3/$3.50 surcharge are not related directly to 3D as it stands.
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