Waiting for thenext wave3D entertainment 2012                    www.pwc.com
Contents                                Introduction	1                                3D films	                           ...
As we continue to analyse the 3D entertainment         markets, we interview players around the world in         the diffe...
In the US, growth potential seems limited in the                                short term, as the film‑screen digitisatio...
Another positive development in 3D is       So what lies ahead for the                 Development of 3Dthe strong perform...
Figure 1: 3D film screens (in units)                                                     Figure 2: Cinema screens by forma...
Figure 4: Films released in 3D among Top 20 grossing films in the US           2007                     2008              ...
Figure 5: US/Canada box‑office revenues (in US$ bn)    12    10    8                                                      ...
Figure 8: Share of 3D in terms of box-office revenues and cinema screens                                2009              ...
Figure 11: 3D box-office revenues (in US$ bns)                          Figure 13: Share of 3D box-office revenues        ...
Figure 15: 3D film listing for 2012 as of 31/12/11January 2012                                June 2012                   ...
3D                          The world of 3D television is             purchase). These findings have been                 ...
So why launch a 3D TV channel? Our         As a result of this lack of 3D             Broadcasters andinterviews confirm t...
Figure 16: Sales of new TV technology in France since                                                                     ...
Figure 19: 3D TV buyers’ perception of viewing quality,                                Figure 20: 3D TV buyers’ opinion on...
Figure 23: Viewing habits of 3D TV users – US and Europe             Viewing habits of 3D TV                              ...
Figure 25: Barriers to broadcast 3D TV in 2011 (in % of HH)                          TV HH                                ...
In the US, growth potential seems limited in the                                 short term, as the film‑screen digitisati...
Toshiba has announced that it will                                                    Figure 27: Frequency of playing 3D g...
3D screens’                                                                             We anticipate that the premium    ...
Consumers are buying 3D TV sets, and        3D mobile phonesthey are using them mainly to watch                           ...
Etude sur l'industrie de la 3D
Etude sur l'industrie de la 3D
Etude sur l'industrie de la 3D
Etude sur l'industrie de la 3D
Etude sur l'industrie de la 3D
Etude sur l'industrie de la 3D
Etude sur l'industrie de la 3D
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Etude sur l'industrie de la 3D

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3ème édition de l'étude sur l'industrie de la technologie 3D réalisée entre décembre 2011 et mai 2012 auprès d’une vingtaine d’acteurs du marché (studios, diffuseurs, équipementiers, opérateurs de télévision payante, opérateurs télécom) dans le monde.

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Etude sur l'industrie de la 3D

  1. 1. Waiting for thenext wave3D entertainment 2012 www.pwc.com
  2. 2. Contents Introduction 1 3D films 2 3D television 10 Other 3D screens 16 3D screens’ penetration forecast 182 Waiting for the next wave
  3. 3. As we continue to analyse the 3D entertainment markets, we interview players around the world in the different industries including film studios, game studios, broadcasters, pay‑TV operators, network operators and main entertainment screens.Introduction Reviewing the past two years The 3D film industry underperformed in the 3D entertainment in the US in 2011, though it did better market, we now find a lull – in Europe and China. The conversion an industry that has lost of cinemas to both digital and 3D continues, but the pace of conversion momentum and faces strong varies across regions. headwinds. The early success of 3D and the record‑breaking In television, 3D TV sets sold quickly – accomplishments of Avatar far more quickly than HD TV had. led to overexcitement and, But there are few 3D TV programmes, in many cases, too much and this situation may continue as mediocre content that could there is no stand-alone business case not justify the premium prices for a 3D TV channel. On other fronts, that cinemas charged for 3D. and other types of screens, small accomplishments offered scant hope for momentum in the short term. The most interesting prospects for 3D could be in user‑generated content rather than in professional development. So overall, 3D entertainment awaits the next wave. Can the film industry produce an Avatar‑like surprise? Can consumers stir up demand for user‑generated 3D content? It is hard to be optimistic in the short term. 3D entertainment 2012 1
  4. 4. In the US, growth potential seems limited in the short term, as the film‑screen digitisation phase is coming to an end. 3D films The number of 3D screens revenue (the 3D ticket premium) has more than tripled since that could be split by the exhibitor Avatar in 2009, not only in and the distributor/producer. In the US, but in all regions. 2009, the share of 3D box-office revenues was 38% higher than the We see regional variations in the share of 3D cinemas releasing the additional growth potential for 3D film vs 9% higher in 2010 and 10% screens (see figures 1, 2 and 3). In the lower in 2011. US, growth potential seems limited in These disappointing results have added the short term, as the film‑screen fuel to a debate on 3D sustainability digitisation phase is coming to an end. and on the value of the 3D premium In other regions, the pursuit of that has raged in the US since Avatar digitisation will drive the penetration (see figure 9). “The audiences have of 3D screens, as the 3D upgrade is now come to realise that there are bad marginal compared with the movies that can be in 3D as well, and investment to digitise. that on top of that you are being charged an extra $5 to see a movie that This positive development in 3D‑screen was as bad as the one you saw in 2D,” penetration does not translate said director Peter Jackson*. The 3D satisfactorily into box-office revenues. premiums “are starting to backfire a What a disappointing year 2011 turned little bit,” he added. And this pressure out to be for 3D film in the US. on the 3D price premium makes 3D less appealing for studios. While 3D maintained its market share among the 20 top‑grossing films in the On the positive side is the very notable US in 2011 (see figure 4), the overall exception of IMAX cinemas, which results were not good in the US. continue to show strong growth globally, and which are generally held Among the disappointing indicators to deliver strong value for its price in the US: premium (see figure 10). Steven • The share of box-office revenues Spielberg told a group of journalists*: generated by 3D decreased in “I am certainly hoping that 3D gets to 2011 for all genres (see figure 5), but a point where people do not notice it. also for specific genres such as Because once they stop noticing it, it animation and live action films just becomes another tool and helps (see figures 6 and 7). tell a story. Then maybe they can make ticket prices comparable to a 2D movie • The average 3D box-office revenue and not charge such exorbitant prices of 3D screens decreased in 2011 just to gain entry into a 3D one, with (see figure 8) with two possible the exception of IMAX – we are getting explanations: a potential decrease a premium experience in a premium of the 3D ticket premium and a environment.” decreasing fill‑in ratio of 3D screens. Both explanations raise critical issues on the sustainability of the 3D business case, as 3D was supposed to provide additional *Source: http://movies.about.com/od/theadventuresoftintin/a/steven-spielberg-peter-jackson-interview.htm2 Waiting for the next wave
  5. 5. Another positive development in 3D is So what lies ahead for the Development of 3Dthe strong performance abroad of 3D 3D film industry?films from the US studios (see figures The number of 3D films released films in 2011 was11, 12 and 13). The critical markets for has stabilised, with the number of sharply mixed withUS studios outside the US had strongyears in 2011, and the 3D price 3D films announced and planned for 2012, comparable in number disappointing USpremium held up, though much more to those released in 2011 (see box-office figures forso on IMAX screens. figure 14). 3D films and pressureChina, now the world’s second‑biggest The disappointments of 2011 have on 3D ticket premiumsfilm market after the US, has a growing created risk aversion. One lesson partially balanced bymiddle class that enjoys a night out. learned is that 3D does best when itAnd China is taking steps to encourage concentrates on animation, or on a growing number of3D growth. For years, China limited established franchises. As a result, 3D screens and strongthe number of foreign films that couldbe shown in China each year to 20. we will see ‘The Amazing Spider-Man’, international box- a reboot of the ‘Spider-Man’ franchise,It recently agreed to increase that to as well as Jackson’s ‘The Hobbit’, office results.34, provided the additional 14 films both likely to build on the strongwere shown in 3D or large format. track record of their predecessors. We will also see 3D re-releases ofThe Chinese are also encouraging films including ‘Beauty and the Beast’co‑production; films made by Hollywood and ‘Star Wars: Episode 1’. In contrast,studios with a Chinese partner do not original live action films are notcount against that total. likely to flourish (see figure 15).Outside China, the share of box-officerevenues generated by 3D remainsrelatively high, except in the USIn the medium term, another cause foroptimism is that some of the biggestnames in film‑making – MartinScorcese, George Lucas, StevenSpielberg or Peter Jackson, along withJames Cameron – have committed to3D. Scorcese’s ‘Hugo’ was released inlate 2011, and Scorcese was pleasedwith the result and said he woulddirect more 3D films; Jackson’s ‘TheHobbit’ will be released in late 2012.Just as encouraging for 3D is theemergence of an increasingly solid 3Dproduction and post‑productionecosystem in the US demand continuesto grow for skilled 3D professionals;one service provider said that morethan half of all demand for filmprofessionals involves 3D. So people arebeing trained, and they are finding work. 3D entertainment 2012 3
  6. 6. Figure 1: 3D film screens (in units) Figure 2: Cinema screens by format (2011, in units) CAGR 2009-11 45,000 (in%) 40,000 +99% 40,000 35,479 35,000 +137% 35,000 13,695 11,642 30,000 +126% 30,000 8,116 25,000 25,000 22,411 7,592 13,774 5,769 20,000 +82% 20,000 15,000 15000 10,000 19,977 10,000 9004 18,285 2,026 14,921 +69% 5,000 7,873 5,000 2,536 0 1,297 0 US/Canada EMEA Asia Pacific Latin 2007 2008 2009 2010 2011 America US/Canada EMEA Asia Pacific Latin America Analog Digital non-3D Digital 3D Source: MPAA, IHS Screen Digest, PwC analysis Source: MPAA, IHS Screen Digest, PwC analysis Figure 3: Cinema screens by format (2011, in %) - 50% of - 60% of digital digital screens screens 100 25% 30% 25% 80 32% 1% 18% 60 19% 32% 79% 40 57% 51% 20 35% 0 US/Canada EMEA Asia Pacific Latin America Analog Digital non-3D Digital 3D Source: MPAA, IHS Screen Digest, PwC analysis4 Waiting for the next wave
  7. 7. Figure 4: Films released in 3D among Top 20 grossing films in the US 2007 2008 2009 2010 20111 Spider‑Man 3 Dark Knight Transformers 2 Toy Story 3 Harry Potter 7 – Part 22 Shrek the Third Iron Man Avatar Avatar Transformers3 Transformers Indiana Jones 4 Harry Potter Alice in Wonderland Twilight – Breaking Dawn 14 Pirates of the Carib. Hancock Up Iron Man 2 Hangover 25 Harry Potter WALL‑E Twilight – New Moon Twilight: Eclipse Pirates of the Caribbean6 Bourne Ultimatum Kung Fu Panda Hangover Inception Fast Five7 300 Madagascar Star Trek Harry Potter 7– Part 1 Cars 28 Ratatouille Twilight Blind Side Despicable Me Thor9 I Am Legend Quantum of Solace Monster vs. Aliens Shrek 4 Rise of Planet of the Apes10 The Simpsons Horton Hears a Who Ice Age – 3 Harry Potter 7 – Part 2 Captain America11 Wild Hogs Sex & the City X‑Men Origins How to Train Your The Help Dragon12 Alvin and the Mamma Mia! Night at the Museum 2 Karate Kid Bridesmaids Chipmunks13 Knocked Up Juno Proposal Tangled Kung Fu Panda 214 National Treasure 2 Chronicles of Narnia 2012 Clash of Titans X‑Men First Class15 Rush Hour 3 Incredible Hulk Alvin and the Grown Ups Puss in Boots Chipmunks 216 Live Free or Die Hard Wanted Fast & Furious Megamind Rio17 Fantastic Four Get Smart GI Joe Last Airbender The Smurfs18 American Gangster Four Christmases Paul Blart: Mall Cop Tron: Legacy Mission Impossible: Ghost Protocol19 Bee Movie Tropic Thunder Taken Shutter Island Sherlock Holmes 220 Night at the Museum Bolt Sherlock Holmes The Other Guys Super 8Key Displayed in 2D and 3D 1 2 11 10Source: PwC analysis 3D entertainment 2012 5
  8. 8. Figure 5: US/Canada box‑office revenues (in US$ bn) 12 10 8 8.4 8.4 6 9.5 9.1 9.5 9.4 4 2 2.2 1.8 -18% 0.2 1.1 0 2006 2007 2008 2009 2010 2011 3D 2D Source: MPAA, IHS Screen Digest, PwC analysis Figure 6: Share of 3D box‑office revenues for animation Figure 7: Share of 3D box‑office revenues for live action films (opening weekend in the US) films* (opening weekend in the US) 2009 2010 2011 2010 2011 80 90 70 80 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 Journey to the Center of the... G-Force Avatar Alice in Wonderland Clash of the Titans The Last Airbender Cats & Dogs 2 Legends of GaHoole Narnia Tron Gullivers Green Hornet Sanctum Thor Pirates 4 Green Lantern Transformers Harry Potter Captain America Conan Spy Kids Dolphin Tale 3 Musketeers Monster House Meet the Robinsons Coraline Monsters vs Aliens Up How to Train Your Dragon Shrek Forever After Toy Story 3 Despicable Me Alpha & Omega Megamind Tangled Yogi Bear Gnomeo & Juliet Mars Needs Mom Rio Fu Panda 2 Cars 2 Smurfs Puss in Boots Chicken Little Cloudy with a Chance of... Weighted 2010 average (animation): 67% Weighted 2010 average (other live action): 65% Weighted 2011 average (animation): 53% Weighted 2011 average (other live action): 52% Source: PwC database and analysis *except Horror and Concert/Dance films6 Waiting for the next wave
  9. 9. Figure 8: Share of 3D in terms of box-office revenues and cinema screens 2009 2010 H1 2011 100 100 100 80 80 80Share of 3D BO revenues (%) 60 60 60 40 40 40 Number Number Number of 3D of 3D of 3D screens screens screens 20 20 20 BO to screen ratio BO to screen ratio BO to screen ratio 2009 average = 2010 average = H1 2011 average = 1.38 1.09 0.90 0 0 0 0 20 40 60 80 100 0 20 40 60 80 100 0 20 40 60 80 100 Share of 3D screen (%) Share of 3D screen (%) Share of 3D screen (%) Source: MPAA, IHS Screen Digest, PwC analysis Figure 9: Difference between standard 3D and a 2D Figure 10: Difference between an IMAX 3D and a 2D ticket price in 2010 and 2011 (in %) ticket price in 2010 and 2011 (in %) 140 140 140 140 136 136 120 120 120 120 100 100 100 100 80 80 80 80(%) (%) (%) (%) 61 61 60 60 60 60 60 60 55 55 60 60 50 50 41 41 40 40 37 37 37 37 40 40 26 26 26 26 22 22 20 20 22 22 22 22 20 20 20 20 11 11 0 0 0 0 Moscow Moscow Tokyo Tokyo London London New York New York Moscow Moscow Tokyo Tokyo London London New York New York 2010 (%)2010 (%) (%)2011 (%) 2011 2010 (%)2010 (%) (%)2011 (%) 2011 Source: Dodona Research, PwC analysis Source: Dodona Research, PwC analysis 3D entertainment 2012 7
  10. 10. Figure 11: 3D box-office revenues (in US$ bns) Figure 13: Share of 3D box-office revenues (in % of box-office revenues) 7 90 6 80 5 +180% 80 4 3.9 70 70 3 70 67 67 68 2 1.4 +100% 60 60 1 2.2 60 1.1 0 53 2009 2010 50 (%) 46 45 US/Canada International 40 40 30 Figure 12: MPAA Box-office revenues (in US$ bns) 20 35 10 30 25 0 21 22.4 Thor Pirates of the KungFu Panda 2 Cars 2 20 18.8 Carribean 16.6 18.1 15 US/Canada (%) International (%) Europe (%) 10 5 9.6 9.6 10.6 10.6 10.2 Source: Dodona Research, PwC analysis 0 2007 2008 2009 2010 2011 US/Canada International Figure 14: Main digital 3D film releases in the US 45 40 35 30 25 20 39 38 15 10 24 15 5 6 8 0 2007 2008 2009 2010 2011 Announced in 2012 Source: PwC database and analysis8 Waiting for the next wave
  11. 11. Figure 15: 3D film listing for 2012 as of 31/12/11January 2012 June 2012 Other announcements in terms of 3DBeauty and the Beast 3D Abraham Lincoln: Vampire Hunter remakesUnderworld: Awakening Brave Blade RunnerFebruary 2012 July 2012 Top GunThe Woman in Black The Amazing Spider-Man Finding NemoJourney 2: The Mysterious Island Ice Age 4: Continental Drift The KillerStar Wars: Episode I – The Phantom Step Up 4Menace September 2012 Some directors have announced thatGhost Rider: Spirit of Vengeance they will be only working on 3D projects DreddMarch 2012 James Cameron Hotel TransylvaniaDr. Seuss’ The Lorax Ridley Scott October 2012Mirror Mirror The Texas Chainsaw Massacre 3DWrath of the Titans Halloween 3DApril 2012 November 2012Dorothy of Oz Wreck-It RalphTitanic 47 RoninThe Cabin in the Woods GravityMay 2012 Rise of the GuardiansThe Avengers December 2012Men in Black III The Hobbit: An Unexpected JourneyJune 2012 Life of PiMadagascar 3: Europe’s Most Wanted The Great GatsbyPrometheus 3D release of 2D film FranchiseSource: Boxofficemojo.com 3D entertainment 2012 9
  12. 12. 3D The world of 3D television is purchase). These findings have been also full of sharp contrasts. reinforced by market surveys and Persuading consumers to feedback from 3D TV channels: once television purchase 3D sets 2011 proved people try 3D TV they tend to appreciate the 3D TV experience. to be little problem in 2011. In fact, consumers have been This relatively high level of satisfaction buying 3D TVs at a far quicker among 3D TV owners is also reflected pace than they initially bought in their buying intentions and their high‑definition television sets – plans for additional 3D viewing (see 3D TV has enjoyed one of the figures 19, 20, 22 and 23). fastest ever adoption rates for new consumer electronics (see Yet, if you think of 3D TV as something figures 16 and 17). more than a piece of hardware – that is, if you expect 3D TV to present This growth is taking place worldwide, programming – the outlook is far with particularly strong sales in murkier and the prospects uncertain. Europe and in China (see figure 18). There are three main reasons for this On the one hand, in 2011, 39 3D fast adoption. channels were launched worldwide (see figure 24). The amount of 3D First, most manufacturers and retailers programmes broadcasted is however emphasise that these 3D sets are highly variable from one project to “future‑proof” – emphasising the flat the other. screen, high‑definition and ability to connect to the internet, as well as the On the other hand, so far this 3D TV 3D‑ready technology. Samsung, for programming has limited appeal to example, offers more than 20 features consumers. Most 3D programming is in its 8000 Smart 3D LED TV line (note not innovative, broad, or deep. Rather, that the name does include 3D). This the channels tend to repeat the same gives the sets a broader appeal. programme frequently (demonstrating In other words, consumers are not how little 3D inventory is available). buying 3D TVs but future-proof TVs. In addition, 3D programming, where Second, the 3D TVs are sold at a small available, is by subscription only. In price premium. That premium varies most cases, it is simply one more from market to market, but is as low channel added to a premium package as 8% for some 3D TV models in Europe. of programming. This approach is unlikely to change in the short term. Third, consumers have a great deal No persuasive business case has yet of choice. More than 80 3D TV models been advanced for a stand-alone 3D TV are currently available. channel – not in the short term, not in the medium term. Broadcasters and Not only are sales strong, but the programmers recognise, quite properly, reaction from consumers has been that 3D TV is not likely to be quite positive (though we note that a profit centre, but rather a cost centre, early adopters are generally for years to come. enthusiastic about new technology they10 Waiting for the next wave
  13. 13. So why launch a 3D TV channel? Our As a result of this lack of 3D Broadcasters andinterviews confirm that most players programming, most 3D TV viewing isare doing it either to differentiate non‑linear, heavily dependent on programmers recognise,themselves from competitors, or to Blu‑ray. Indeed, most customer quite properly that 3Dreward their subscribers with the expectations for 3D video content canhighest average revenue per user, be fulfilled by Blu‑ray, and the number TV is not likely to be aincreasing the perception of value of Blu‑ray titles available continues to profit centre, but ratherfor money. increase sharply. In 2011, 108 3D Blu‑ray titles were published globally, a cost centre, for yearsPeople may indeed be willing to compared with 37 in 2010 (see to come.watch in 3D, but they must not only figure 26).own the appropriate TV set, but haveaccess to the programming service Another possible source of 3Dand be willing to pay for it (see figure programming is video on demand25). It is important to understand that (VOD). Last year, Samsung announcedcurrently the main barriers to 3D TV that it would offer VOD with its Smartadoption are primarily related to the 3D sets, starting with a small ‘samplinglevel of subscription to HD pay‑TV menu’ and then perhaps growing intopackages; ownership of a 3D TV is a more robust fee‑based system. Buta lesser concern. that has not yet developed. Sky and the DISH Network also announced in 2011Note, too, that the barriers to 3D TV that they were preparing for VOD, butdiffer significantly from one country to developments have been limited.another. While we anticipate that mostbarriers to 3D TV adoption should So like 3D film, 3D TV is also awaitingdecrease by 2016, a great deal of the next wave.uncertainty remains on the availabilityand attractiveness of 3D TV channels– and when, if ever, a global marketwill arise.One obvious source for 3D TVprogramming is the world of sport.The 2012 Olympic Games in London inJuly and August will be made availablein 3D. While FIFA 2010 was alsoavailable in 3D, it did not generate astrong demand for 3D TVs. It will beinteresting to see if the greater 3D TVhome penetration will generate moreappetite from the consumers. 3D entertainment 2012 11
  14. 14. Figure 16: Sales of new TV technology in France since Figure 17: LCD TV panel shipment shares by type and 3D launch (in ‘000s of units) TVs as % of TV shipped 100 25,000 90 10% on average in 2011 80 20,000 19,182 70 16,535 15,000 60 13,087 13,049 (%) 10,000 50 9,420 9,028 6,526 40 5,000 5,175 4,092 30 120 2,288 2,015 939 9 71 478 0 20 0 1 2 3 4 5 6 7 8 9 10 11 12 13 10 Year 3D TVs HD TVs 0 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12e Q2 12e Q3 12e Q4 12e Source: Screen Digest, GfK, PwC model, PwC analysis 2D 3D Source: NDP Display Search, PwC analysis Figure 18: 3D TVs as % of TV shipped 20 15 (%) 10 5 0 Japan N. America W. Europe E. Europe China Asia Pacific LatAm MEA Worldwide 2010 Q4 2011 Q1 2011 Q2 2011 Q3 Source: Screen Digest, GfK, PwC model, PwC analysis12 Waiting for the next wave
  15. 15. Figure 19: 3D TV buyers’ perception of viewing quality, Figure 20: 3D TV buyers’ opinion on 3D content andcontent and experience experience (Q3 2011, Europe 5, 208 respondents) 100 100 95 91 90 90 89 80 80 70 70 60 62 (%) 60 50 40 (%) 50 30 40 20 30 10 0 20 In general the Watching too The variety If it was possible quality of the 3D many shows in and choice of I would like to 10 experience has 3D makes me TV shows watch every TV been very good feel sick available in 3D show in 3D even is very good with glasses 0 Overall Picture quality Picture quality Sound quality picture quality of 2D of 3D programming programming Agree Neither agree nor disagree DisagreeSource: Strategy Analytics ( Q3 2011), DEG (Q1 2011), PwC analysis Source: Strategy Analytics (Q3 2011), DEG (Q1 2011), PwC analysisFigure 21: 3D TV buying intentions and recommendations Figure 22: 3D TV buying intentions and recommendations No, 18 No, probably definitively not 16 not 6% 1% 14 12 Might or 10 12.5 might not 14% (%) 8 7.6 6.8 Yes, 6 definitively 6.9 55% 4 5.5 Probably 2 4.2 3.9 25% 3.5 2.1 1.4 0 Italy US France Germany UK Very likely (%) Somewhat likely (%)Source: Strategy Analytics (Q3 2011), DEG (Q1 2011), PwC analysis Source: Strategy Analytics (Q3 2011), DEG (Q1 2011), PwC analysis 3D entertainment 2012 13
  16. 16. Figure 23: Viewing habits of 3D TV users – US and Europe Viewing habits of 3D TV 3D TV owners viewing users (US, Q1 2011, habits (Europe 5, Q3 “Approximately 3,065 respondents) 2011, 238 respondents) 70% of people who I’d watch watched our 3D TV everything in 2D Channel, are 0% viewing other 3D content within the Id watch Several most things Rarely times a day next 7 days. Our or never in 2D Id watch 18% 15% main issue is to get 14% everything in 3D them to try it” 27% A manager of a 3D channel At least It would once be an a month At least even split 14% once a day “1 million 3D VoD 23% 26% viewed on Samsung free 3D VoD portal during the first 100 At least Id watch most once a week days” things in 3D 27% 39% Samsung Source: Strategy Analytics (Q3 2011), DEG (Q1 2011), PwC analysis Figure 24: Main existing and announced 3D TV channels Europe World Eurosport Wildearth.TV.3D Sky 3D Hustler HD 3D High TV Anixe Brava 3D The Channel Penthouse 3D Viasat 3D HD1 3D by Panasonic Sky 3D Telewiza Next 3D Orange Canal+3D ESPN 3D Ma Chaine 3D 3net Nri 12 3D HD+ Sky 3D xfinity 3D MyZen.TV Smart 3D Teledunya S3D n3D Direct CNTV Orange BS11 Direct Cinema Sky 3D MSG Canal+3D Existing 3D TV channels Announced 3D TV channels Foxtel 3D Source: PwC14 Waiting for the next wave
  17. 17. Figure 25: Barriers to broadcast 3D TV in 2011 (in % of HH) TV HH Barriers to broadcast 3D TV in 2011 (in % of HH) Pay-TV subscription TV HH Pay-TV HH Pay-TV barriers Pay-TV HH HD Pay-TV subscription HD pay-TV HH HD enabled pay-TV HH 3DTV 3D-ready TV equipment ownership barrier Broadcast 3DTV enabled HH Broadcast 3DTV enabled HH 3DTV Active broadcast Broadcast 3DTV HH content 3DTV usage barrier 0 10 20 30 40 50 60 70 80 90 100 Active broadcast 3DTV HH Spain Slovakia Poland USA France JapanSource: ScreenDigest, PwC model, PwC analysisFigure 26: Number of 3D Blu‑rays’ titles made available worldwide 160 108 145 140 14 17 9 120 10 13 18 100 18 25 80 19 60 33 37 35 40 3 5 7 20 42 14 7 0 2010 2011 Total 3D DVDs available Animation Documentary Live action Live performance Horror OtherSource: PwC analysis 3D entertainment 2012 15
  18. 18. In the US, growth potential seems limited in the short term, as the film‑screen digitisation phase is coming to an end. Other 3D While we see the possibilities Given the lack of opportunities in this of innovation and long‑term market to use 3D, little demand has potential in 3D beyond film surfaced, and no significant research screens and television, just how this may play out is uncertain. appears to be under way because interest is so low. The computer laptop market is similar. A large installed base of 3D‑ready Models are increasingly offered as gaming consoles is in place. Yet, 3D‑ready, though this has not consumer appetite for 3D games has generated much excitement among been limited (see figure 27), and console consumers. Rather, the focus – among manufacturers have turned their focus consumers, manufacturers and sellers and resources to motion‑capture – has been on tablets. This is not games and programs – like Microsoft’s surprising, given the stunning extremely successful Kinect – rather commercial success of the iPad and the than 3D. strong competition that is emerging from competitors. This trend is clear, despite the success of the handheld Nintendo 3DS. The Apple has been at the centre of many Nintendo 3DS, with glasses‑free 3D, rumours involving 3D, particularly in was introduced in early 2011 – and, the months before the third‑generation significantly, its price was cut later iPad was introduced in April 2012. in the year. After a slow start, sales Industry speculation anticipated that are reported to be strong. Yet, none the new model might incorporate 3D. of Nintendo’s rivals has announced plans to compete in this segment The new iPad is powered by an of the market. A5X chip, and reviewers say it is very fast at displaying complex 3D Even though a number of home gaming graphics in games. But games that consoles have 3D, the majority of 3D take advantage of this technology are, games being developed are for the at the moment, rare. Nintendo 3DS. Apple‑watchers also note that an The autostereoscopic technology used application is already available for in the Nintendo 3DS will eventually the earlier iPad 2 and the iPhone 4, be developed for use in other, larger which display 3D content. Apple has had devices, but little hard evidence exists little to say about its 3D intentions. of when or where this will happen. Other tablets are surely looking into The cellphone market is another area 3D, as well. where consumer appetite for 3D has not yet been determined. This segment As technology evolves we will see is extremely limited now, because progress in 3D that does not involve industry‑wide standards have not been special glasses. Some companies are established, so a 3D picture taken on at work on eye‑tracking systems that one device cannot be viewed on position objects on the screen in such another manufacturer’s devices. In a way that natural vision creates a 3D Japan, five models of 3D phones effect. To date, this capability has been are sold, four of them from Sharp. demonstrated only on smaller screens, Worldwide, only three models are sold. but surely this will change.16 Waiting for the next wave
  19. 19. Toshiba has announced that it will Figure 27: Frequency of playing 3D games in Europe (in % ofoffer a glasses‑free 55‑inch 3D TV set respondents who own a 3D console)sometime in 2012, to be distributedin the UK at a price of £7,400. At thatprice, it is not likely to be a huge 80success. Samsung estimates that tenyears are needed to develop a quality 703D glasses‑free TV experience at 60a reasonable price. 50We believe there is a high probability (%)of success for glasses‑free 3D, especially 40in the tablet format, where consumer 30demand is so strong. 20We note, too, that sales have begun topick up in the consumer market for 3D 10cameras. People are taking 3D pictures 0of their weddings and their babies’ first Never Just once A few Quite Very oftensteps. So it is reasonable to assume that times oftensuch user‑generated content may Xbox 360 PS3become a driver of 3D growth. Source: Strategy Analytics (May 2011), PwC analysisHow this might play out is uncertain.But we are all familiar with the powerof user‑generated content. So, in thishypothesis, more people will capturetheir images on 3D devices and make In the same time, the success ofthem available to others, many people motion detection has been very highwill want to view them on phones ortablets (and perhaps on large screens),and demand for 3D devices of many Kinect has been the fastest-sorts will rise. This might even be oneway that 3D TV could expand its base. selling consumer product in history after three months Microsoft announced ten million unit sales at the end of February 2011 3D entertainment 2012 17
  20. 20. 3D screens’ We anticipate that the premium for 3D films will be more flexible in the future and must fall from penetration current US levels to appeal to consumers. • The production of 3D films in forecast Europe, China and Japan will increase, though remaining relatively limited. • The incremental production costs of 3D will continue to deter some Overall, 3D entertainment film‑makers. While some prominent awaits the next wave. Will there directors – Peter Jackson, Martin Scorcese – are now working in 3D, be an unexpected breakthrough, the main barrier to 3D will continue or a surprise? Could another to be its adoption by other directors. stunning film emerge and have an Avatar‑like impact? That • The debate about the optimum seems more likely than a environment to watch (and surprise in the 3D television produce) a 3D film – IMAX, 4k (a reference to an image width of sector. 4,096 pixels), frame rate and so on – and the 3D ticket premium should 3D films continue in the years to come. A resumption of growth of 3D films • The share of 3D films on the requires the production of quality 3D top‑grossing movie lists should films. Whether 3D box‑office returns, stabilise. or expectations that they will improve • The adoption of digital distribution will incentivise sufficient production is expected to reach 100% among and a commitment to quality remains the multiplex and large urban to be seen. theatres in the medium term, with more limited adoption among small We anticipate the following: cinemas. Whether and how much • Most animation and horror films this will increase cinema revenue will be released in 2D and 3D. is uncertain. • Franchise films – e.g. Spider‑Man, Harry Potter, Pirates – and 3D TV animation will dominate 3D. For a breakthrough in television, • The conversion of historical an eyeglass‑free technology at an blockbusters to 3D will continue. attractive price is needed. That is The success of James Cameron’s not yet in sight. As noted previously, Titanic in 3D, released in April Samsung estimates that it will take 2012 to coincide with the 100th ten years to develop a quality 3D anniversary of the tragedy, eyeglass‑free TV experience at a demonstrates a new the power of reasonable price. excellent 3D to generate business.18 Waiting for the next wave
  21. 21. Consumers are buying 3D TV sets, and 3D mobile phonesthey are using them mainly to watch The development of 3D mobile phones Demand continues tofilms and other programmes on DVD.Our scenario for the availability of 3D is expected to be shaped by: grow for skilled 3DTV content anticipates the following: professionals; one • The incremental benefits provided by 3D photos and 3D games. service provider saidVideo games:• Game‑makers and console‑makers • The lack of interoperability among that more than half of are expected to continue to focus on the different standards – a 3D all demand for film picture captured by one model motion capture rather than on 3D. cannot be displayed on a 3D model professionals involves 3D.• Most 3D games are directed to from a different manufacturer. handheld devices, particularly the Nintendo 3DS.Home video:• More films are becoming available on 3D DVD and Blu‑ray.• 3D video on demand will develop, but should remain limited.TV:No case can be made for the emergencein the short term of a full ecosystem for3D programming.• The main 3D programmes that will be broadcast will be limited to live events, such as premium sporting contests and concerts, and those will continue to be accessible only through subscription packages.• The adoption of 3D by other categories of TV content is likely to remain limited.• The number of models of 3D TV sets will continue to increase and prices will continue to fall.• All high‑end and most medium‑end connected TV models will be 3D‑ready in the medium term.• We anticipate a worldwide 3D TV promotional campaign in 2012 for the Olympics in London, but insufficient access to the programming will limit its influence. 3D entertainment 2012 19

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