REAL D RESULTS - 3D Global Cinema Platform Creates Robost Market Opportunity

http://www.filmjournal.com/filmjournal/features/article_display.jsp?vnu_content_id=1003699998

 

Source: FilmJournal

by Eliza Brown, Staff Writer, REAL D

REAL D chairman/CEO and co-founder Michael Lewis says of the year 2005, a bit ruefully, “We created this technology and we hoped that content creators would show up.”

Lewis and co-founder Joshua Greer had spent two years refining a next-generation digital 3D technology, which was far more sophisticated than the anaglyph “red and green glasses” technology with which most moviegoers were familiar. REAL D’s technology, using circular polarization to separate left- and right-eye images, created a realistic and immersive experience without the light issues and eyestrain associated with older 3D cinema systems. REAL D launched its 3D cinema business in early 2005 and the content creators did show up. In November 2005, with the release of Disney’s Chicken Little, REAL D had deployed 88 digital 3D screens domestically, driving three times the per-screen box office of the 2D screens showing the film.

Two fast-moving years later, in late 2007, REAL D was able to carry Paramount’s Beowulf on over 900 screens domestically in 638 locations. When the dust had settled, REAL D-equipped theaters had delivered $23.4 million of the film’s $79.4 million domestic take—approximately 30 percent. The REAL D platform’s expansion to the world’s largest deployment of 3D screens—1,169 globally as of press time—became proof of concept, if proof were needed, that the “new” REAL D 3D had become a significant driver in box-office financials.

Dallas’s Rave Motion Pictures, an exhibitor firmly committed to REAL D 3D with at least one REAL D screen in each of its locations, opened Beowulf in its Las Vegas Town Square location on seven screens. Jeremy Devine, Rave’s VP, marketing, comments, “On average, our 3D engagements gross three times as much as the 2D runs. Having been on board with REAL D since the Chicken Little release has been invaluable in terms of raising our brand awareness and contributing to the bottom line.”

Naturally, the financial community has taken note as well. In May 2007, Gordon Hodge and Lloyd Walmsley, analysts at Thomas Weisel Partners in San Francisco, wrote a report entitled “Polarize This! REAL D 3D Movies Could Be ‘Game Changer”’ for the Cinema Business.” In the report they state, “Clear consumer demand for a 3D experience is manifesting in higher ticket prices and higher attendance per screen, leading to higher revenues and margins for cinemas. We believe the REAL D platform for 3D movie exhibition could be a ‘game changer’ for the cinema business.”

REAL D has made a core tenet of its business installing screens globally and in multiple markets, making 3D moviegoing a reality for cinema guests everywhere. REAL D’s 995 domestic screens as of press time reach virtually all the top 50 DMAs, as well as considerably smaller markets. This ubiquity has effectively created a “mainstream 3D market,” which in turn encourages content creators to venture further into the 3D realm. A host of 3D features are in the pipeline for 2008 and 2009.

Upcoming in 2008 and only on the digital 3D platform are Disney’s Hannah Montana/Miley Cyrus: Best of Both Worlds 3D concert film and New Line’s Journey to the Center of the Earth 3D. With a 97% market share in digital 3D cinema, REAL D expects to generate the majority of box-office take on both movies. The company is estimating 4,000 screens deployed in 2009, paving the way for a slew of highly anticipated 3D releases including Disney’s Bolt, Focus Features’ Coraline, DreamWorks Animation’s Monsters vs. Aliens and How to Train Your Dragon, and Fox’s Avatar, directed by James Cameron.

Says Lewis, “We’ve built the world’s largest 3D platform and the market continues to expand. Filmmakers have truly embraced the medium and we are thrilled that our global reach has created a real audience for 3D cinema.” This time, he doesn’t sound rueful at all.