Can 3-D Save Hollywood?

MARCH 20, 2009

http://online.wsj.com/article/SB123751033980990723.html

 

From Jeffrey Katzenberg to James Cameron, studio heads and top directors are betting big on the technology. But getting audiences into seats can be trickier than making monsters jump off the screen.

When "Monsters vs. Aliens," a DreamWorks Animation movie about an extra-terrestrial attack, hits theaters next weekend, it will set off another invasion: a new wave of big-budget 3-D films.

James Cameron, Robert Zemeckis and Steven Spielberg are all working on 3-D movies. Walt Disney's next Pixar feature, "Up," was recently selected to open the Cannes Film Festival -- the first 3-D movie to do so. And starting with "Monsters vs. Aliens," DreamWorks Animation, known for hits such as "Shrek" and "Kung Fu Panda," will release every movie it makes in 3-D.

Jeffrey Katzenberg, chief executive of DreamWorks Animation, is betting heavily on the technology, which he bills as a much-needed boost for Hollywood. Even with an upswing in the past few months, movie admissions have declined more than 9% over the past decade, and were down by almost 5% last year, according to box-office tracker Media By Numbers.

"The theater owners have not done anything to change the theatrical experience in many years," says Mr. Katzenberg, who likens the latest 3-D technology to past quantum leaps in the industry such as the first talkies or the introduction of Technicolor. "This is going to bring moviegoers back to the theaters," he says. He hopes that the technology, which will raise ticket prices by $2 to $5, will transform the box office into "a growth business for the first time in many years."

Hollywood pushed 3-D in the 1950s and again in the 1970s and 1980s, but those efforts left moviegoers with little more than a headache. While the 3-D technology on display in films like "Monsters vs. Aliens" is more sophisticated, it remains to be seen whether people will still be drawn to it after its novelty has worn off. Many theater owners say they wonder if it makes sense to raise ticket prices more in a downturn. And the technology, which relies on actually going into theaters, may have little effect on home-video sales, which have boosted studio profits for years but fell about 9% in 2008, according to Adams Media Research.

Unlike the 3-D movies of past decades, where two separate projectors displayed images (one for each eye) and had to remain synchronized for the duration of the film, the latest 3-D systems use a single digital projector. They quickly alternate between images seen by the right and left eyes, which the brain marries into a three-dimensional picture. The process still requires glasses to pick up separate left and right eye images, but not the clunky red and green kinds popularized in the 1970s and 1980s with 3-D films. Today's 3-D eyewear looks more like sunglasses.

The first films made with the latest generation of 3-D technology began to trickle out over the last few years, beginning with "Chicken Little" in 2005 and increasing in 2007 and 2008, with "Beowulf," "Fly Me to the Moon," "Journey to the Center of the Earth" and "Bolt." Some of those titles, like "Beowulf" and "Bolt," left critics lukewarm and underperformed at the box office. ("Beowulf" had an estimated budget of $150 million and didn't break $100 million at the domestic box office.) More recently, Focus Features' "Coraline," an animated tale about a young girl who enters an alternative universe, has grossed $70 million at the domestic box office since it opened last month, in large part because of the popularity of 3-D showings of the film. "Coraline" had a budget of between $60 and $70 million.

Back in 2005, there were only a little over 100 3-D screens across North America equipped to show movies in 3-D. Now there are more than 2,000 3-D equipped screens, and "Monsters vs. Aliens" will play on virtually all of them. Still, Mr. Katzenberg had initially hoped for about twice as many screens. There are a total of about 43,000 movie screens in North America.

At least some moviegoers need to be won over by 3-D. David Lacy of Irvine, Calif., says he won't go out of his way to see "Monsters vs. Aliens" in 3-D if the tickets cost more. The 28-year-old graduate student focusing in Shakespeare studies saw "Beowulf" in 3-D and was disappointed by the experience. "[3-D] doesn't help a weak plot," he says. "If they regularly started doing all movies in 3-D, I would never go."

Hollywood's Less-Successful Gimmicks

When Warner Bros. released a film with Al Jolson called "The Jazz Singer" in 1927, it featured what many considered a gimmick — it had sound. Dubbed "talkies," these new films became the standard, much to the chagrin of the stars and creators of silent films who fought to stay relevant. Hollywood hasn't stopped innovating, although not all of their attempts at novelty have been met with praise. Below are some of the less-successful attempts at creating cinematic history. --Jamin Brophy-Warren

CinemaScope

Struggling with the growing ubiquity of television, some studios set their sights on a bigger target—much bigger. In 1953, 20th Century Fox attempted to replicate the experience of the popular 3-D look but without the glasses. Originally developed by a French inventor in the 1920s, CinemaScope was projected across three different screens with the image stretched across all of them. The Hollywood Reporter announced upon its release that CinemaScope would be the 'Moses' that would direct Hollywood "out of a film wilderness" and Paramount later released a competitor called VistaVision with a similar effect. Both technologies were phased out by the end of the next decade.

Percepto

Known for his legendary gimmicks for his B-movies, director William Castle wanted to scare viewers of his 1959 horror film "The Tingler" right out of their seats — literally. Starring Vincent Price, the film told of a parasite that would infect victims and could only be destroyed by screaming. Calling the technology "Percepto," Mr. Castle installed dozens of buzzers underneath the theaters seats that film operator could trigger that was intended to simulate "the tingler" lose in the movie theatre. Mr. Castle also arranged for a woman to faint during some screenings and ushers would carry her out on a stretcher.

AromaRama

For the 1959 travelogue "Behind the Great Wall," publicist Charles Weiss and Italian Count Leonardo Bonzi rigged theatres to release certain smells during the movie called "AromaRama." Triggered by electronic cues, more than 30 scents such as the smell of the Gobi desert were incorporated into the 120 minute film. Part of the problem, however, was the smells themselves. Mixed with Freon, one critic described the experience as being in "a subway rest room on disinfectant day." The complaints didn't hinder the release of "Smell-O-Vision" which attached pipes directly to the seats to pump in smells. Director John Waters happily resurrected the technique for his 1981 film "Polyester."

Sensurround

After taking his wife to the movies during an aftershock, producer Jennings Lang tried to replicate the experience for the 1974 disaster flick "Earthquake" starring Charlton Heston. With a development cost of less than $1 million for MCA, "Sensurround" used a low-frequency sound to enhance the illusion of a rumble. Universal rented a package consisting of special speakers and an amplifier for $500 a week for use at about 60 theatres. The tactic worked. The film won an Oscar for the technology and was a hit at the box office.

"Found" Footage

With a modest budget and handheld cameras, two indie filmmakers wanted to find a way to popularize their project about three film students who go missing in the woods of Maryland. They created a Web site called blairwitch.com that told the story of the film as if it were fact. Snippets of the film circulated with "real" footage from the ill-fated excursion. Within weeks, rumors were circulating about the truth (or falsehood) of the Blair Witch story and by the time Artisan Entertainment announced that "The Blair Witch Project" would be released in theaters, the hype had reached a fever pitch. The film grossed more than $135 million.

"Monsters vs. Aliens" is a broad send-up of sci-fi flicks from the 1950s, such as "The Blob," "The Fly," and "Attack of the 50 Foot Woman." When a UFO lands in America, the president (Stephen Colbert provides the voice) calls on a group of monsters to save Earth from the alien attack. The 3-D effects heighten the movie's visual jokes, making characters like Ginormica, a 49-foot 11-inch tall California girl (Reese Witherspoon), and the 350-foot Insectosaurus, appear to tower over the roughly 6-foot president.

The movie could set a benchmark for a host of other big-budget 3-D films. Mr. Zemeckis's "A Christmas Carol," an animated remake of the Charles Dickens tale about Scrooge starring Jim Carrey, is planned for release in November. Mr. Cameron is at work on "Avatar," a $200 million 3-D film set for December in which a war veteran named Jake travels to another planet. Mr. Spielberg's "The Adventures of Tintin: Secret of the Unicorn," based on the popular Belgian comic strip about a reporter and his dog, is due out in 2011. The box-office performance of "Monsters vs. Aliens" will be "vital to the long-term potential of 3-D," says media analyst Richard Greenfield of Pali Research.

All told, Hollywood plans to release as many as 45 3-D films over the next two and a half to three years, according to RealD, the leading provider of 3-D equipment. Theaters typically charge about a $2 to $4 premium on top of normal ticket prices to see a film in 3D, but that figure could climb higher for future 3-D films like "Avatar." On a DreamWorks conference call in February, Mr. Katzenberg told analysts that the company anticipated a "meaningful up-charge" of $5 on 3-D tickets for "Monsters," but most theater chains are charging less than that, an average of $3.18, according to a report by Mr. Greenfield. An industry report from Piper Jaffray, an investment bank, estimates higher ticket prices from 3-D films could help raise the box office by nearly 23% in 2011 over 2008 returns.

"When you enhance the experience, people are willing to pay for it," says Dick Cook, chairman of Walt Disney Studios, which plans to churn out more than a dozen 3-D films over the next several years.

Mr. Katzenberg has retrofitted DreamWorks' campus-like studio with 3-D equipment developed especially for the company by its own 3-D experts and engineers. That group includes "Monsters vs. Aliens" Stereoscopic Supervisor Phil McNally, who worked on "Chicken Little" and is known within the industry as "Captain 3D." DreamWorks Animation plans to invest an additional $15 million in each 3-D film it makes -- a sizable bet for company that usually makes only two films a year.

As part of a massive marketing push, DreamWorks has signed up Bank of America to run a promotion for the movie. Ads for the film will appear on 18,000 ATM machines and more than 6,000 branches, and the bank will give away free ticket upgrades online to anyone who wants see the film in 3-D for a 2-D price. The promotion will cost the bank, which recently received $45 billion in government aid, about $175,000.

"This gave us an opportunity to pass along savings to our customers at very little cost to the bank," says Joe Goode, a spokesman for Bank of America.

If 3-D takes hold, the new format could revive DreamWorks' stock, which has fallen in recent months. The company's 2008 releases, "Kung Fu Panda" and "Madagascar: Escape 2 Africa," were blockbusters that each grossed more than $60 million during their opening weekends. But the company's net income for last year dropped 35% as revenue fell 15%.

Theater owners have been slow to embrace the technology. Financing woes have slowed the roll out of 3-D systems -- they can be outfitted only on digital projectors, which carry a price tag of up to $75,000. Last year, Hollywood studios crafted a $1 billion financing package to help theater owners cover the costs of digital projectors (the exhibitors must bear the costs of 3-D systems on their own), but turmoil in the credit markets has stalled the deal.

Without more screens, the dozens of 3-D films coming out over the next few years could find themselves with limited venues at which to play, resulting in missed revenue for companies like DreamWorks.

Fred Van Noy, chief operating officer of Carmike Cinemas, one of the country's major theater chains, wasn't initially sold on the 3-D rollout. But with so many directors getting behind 3-D, he says he is now convinced his company can profit off the technology and has installed 3-D systems on nearly 500 of his roughly 2,287 screens. "Now there is so much product coming down the pipeline, we will recoup our investment way before we have to worry about this thing possibly reverting to fad status," he says. For exhibitors like Mr. Van Noy, 3-D represents a way to lure back consumers lost to the Web.

The first time Hollywood turned to 3-D, studios were trying to face down another small-screen threat. As TVs crept into American homes in the 1950s, movie attendance dropped in half within a matter of years. Dozens of films, including "House of Wax," were released in 3-D between 1952-1955. But the technology quickly went out of fashion. Just three years after the opening of "Bwana Devil," the first major color film release in 3-D, theater owners had basically abandoned 3-D in favor of a wide screen format called CinemaScope.

Leonard Maltin, a film critic and historian based in Los Angeles, says that the studios' expectations about 3-D currently "are an absolute replica of the pronouncements and interviews that came out in 1953."

While the costly digital upgrades required to show 3-D films have become roadblocks in Hollywood's race toward 3-D, they're also what makes the technology so much improved over the 3-D audiences saw in the 1950s and again in 1980s, with films like "Jaws 3-D."

RealD, the leading 3-D system, was first used with Walt Disney's 2005 hit "Chicken Little," and is being used for "Monster vs. Aliens." RealD is being developed for use in the home. The company also provides 3-D equipment and technology to NASA and the military, which uses it for reconnaissance.

To make "Monsters vs. Aliens," the producers also employed a technology called InTru 3D. Using proprietary in-house tools, DreamWorks allowed its filmmakers to use a device resembling a physical camera that, instead of looking out onto a real soundstage, is able to view an animated, computerized set.

After DreamWorks completed the 3-D version of "Monsters vs. Aliens," its filmmakers created 2-D prints because the company knew not every theater would have the capabilities to show the film in the new format.

Despite advances in the technology, Jerry Pierce, who consults on digital issues for General Electric Co.'s Universal Pictures and is also the chairman of the Inter-Society Digital Cinema Forum, sees one limitation: the glasses. He says, "Who wants to wear those on a date?"