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3D at Home Market Analysis: Status and Future

By Tassos Markas, President and CEO, 3DMedia

What is driving 3D this time around? What are the market trends and how can 3D be reinforced as the technology of choice for consumers to capture, create, and share content? This article provides insight into the market trends and discusses the conditions and requirements that will make 3D the default method of enjoying entertainment and personal content.

HDTV Manufacturers

Although the HDTV market has experienced significant growth in the past ten years, sales are leveling off due to high HDTV ownership in households. Newer capabilities such as brighter panels and higher refresh rates are not disruptive enough to entice consumers to rapidly replace their existing TVs with new ones. Web connectivity is definitely a driving force, but it is not sufficiently disruptive since consumer desire to move from broadcast to on-demand content can be also accomplished using PCs or boxes connected to their TVs. For what is available today and what is forecast to appear technologically in the near future, 3D is the most viable technology at good price points that offers a new experience and can drive consumer desire to replace their existing sets. HDTV manufacturers have realized this and have been investing heavily to make better and cheaper 3D HDTVs. Several consumer electronics executives have made comments attesting that by the end of next year more than 3/4 of new TVs sold will be 3D capable.

Digital Cameras and Camcorders

The camera market is even more saturated compared to the HDTV market since the vast majority of consumers now own a digital camera or camera phone. This market is even more desperate to offer something new so consumers can start replacing their existing cameras. There is no technology on the horizon that can make this happen besides 3D. Manufacturers of image and video capture products (e.g., cameras, camcorders, and cellphones) need to deliver high-quality transitional products that will allow consumers to capture both in 3D and standard 2D modes since the transition from 2D to 3D will not happen overnight. This means that such devices need to deliver exceptional quality 3D photos and 3D video without compromising their 2D quality.

Movie Theaters and Hollywood

The availability of large, high-quality HDTV panels, combined with easily accessible online content, allows consumers to enjoy movies at home and provides little motivation for them to keep coming to the theaters. Movie theater operators need to offer something new to sustain their business. 3D provides such a new experience. The very large screens, available only in theaters, provide a higher degree of immersion which enhances the 3D viewing experience and creates a strong motivating factor for consumers to return. Hollywood has also seen the value of 3D and has been releasing 3D titles at a rapid pace. However, this has not been done without some controversy. This rush to release as much 3D content as possible has compromised the consumer 3D experience to a certain degree, as studios have used sub-optimal 3D shooting techniques and lower quality technologies such as 2D-to-3D conversion to get movies in 3D format fast and at low cost. Although the quality of 3D movies has been mediocre in quite a few cases, the public has generally embraced the technology, and as a result ticket sales for 3D showings more than doubled to over $6 billion in 2010 compared to the year before. Movie theater operators are also converting their screens to digital formats suitable for 3D, and thousands more 3D-capable theaters will be added this year in the US alone.

3D at Home

Although there is overwhelming evidence that 3D is here to stay as a means to create a new experience in theaters, will it reach homes, and when? Market appeal for any new consumer product can be achieved if an optimal ratio of perceived value over cost can be reached. So, where does 3D TV stand here?

According to various reports, 3D HDTV owners are very satisfied with their purchases and the experience that 3D delivers to their homes. Although there is some initial hesitation by particular consumers to purchase 3D TVs due to the nature of the glasses and possibility of eye fatigue, those problems will soon be resolved and 3D TVs will ultimately win the hearts of consumers. There is also another overwhelming reason that can attest to this: we see things in three dimensions, so it is only natural that we will have the same expectation for our display devices. For those reasons, 3D offers a significant value over what we have today. But when will the price be ready? The good news is that the additional costs for manufacturing 3D HDTVs are small, and because of this, prices have been dropping rapidly to the point that 3D will be a standard feature in all new HDTVs sold very soon. I believe that the value vs. price ratio is very ripe at this point and 3D is ready to take off.

3D Adoption

Based on the current status of the 3D market and what has occurred in previous technology adoption cycles, I expect there will be three phases in consumer readiness to consume 3D content at home.

The first phase that covers this and next year will be the 3D hibernation phase. During this phase, a large number of consumers will own 3D HDTV sets because it will come as a standard feature with the sets they bought. 3D TV owners will be occasional viewers of 3D content for special occasions and events.

With increased 3D content availability from both broadcasters and studios, 3D awareness will continue to increase, and in the second phase consumers will start demanding, being willing to pay for, and consuming more 3D content. The availability of 3D passive glass technology will also ease some of the eye strain associated with shutter glasses, and its convenience and cost will create a more appealing viewing experience for consumers.

In the final, full adoption phase, consumers will want to create and consume their own personal 3D content. This means that capture devices, whether they are in the form of 3D cameras or 3D cellphones, need to be able to deliver the right quality at the right price points.

This is a typical technology adoption process, and as such, requires some time for 3D to reach mass adoption status. However, given that 3D TVs with either active or passive glasses will be commonly available to display 3D content, there are two things that can be done to expedite wide proliferation of 3D in the marketplace:

• Studios and broadcasters need to create better 3D content. Quality and consumer experience should supersede quantity. Although this may delay wide adoption of 3D in the short term, it is better to deliver excellent quality instead of risking losing viewers. It will take a very long time to bring dissatisfied consumers back to 3D.
• High quality, versatile, transitional capture devices (e.g., 3D cameras, 3D camcorders, and 3D cellphones that can also do 2D very well) need to come into the market soon to fill the gap of 3D content availability. Giving consumers the ability to create their own 3D content allows them to make a personal connection with the 3D technology by capturing and enjoying their own moments and life in 3D. This removes barriers to consumers investing more in 3D technologies, whether they are more expensive 3D HDTV sets, 3D cameras and cellphones, or 3D content.

There is no question that 3D will succeed this time around. The only question is how fast. For this to happen quickly, it is paramount that all contributors in this space, whether we are consumer electronics manufacturers, content creators, or technology providers, need to produce and offer high quality 3D products to consumers.

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