Bad 3D Hurting Consumers’ Perceptions, Katzenberg Says

A handful of films meant to exploit audience interest in 3D, and premium ticket prices, led to consumers’ feeling “ripped off” last summer at 3D theaters, DreamWorks CEO Jeffrey Katzenberg said Wednesday at the 3D Media Markets conference in New York. “The backlash was swift,” he said, saying a line is emerging between high-quality 3D films and those trying to abuse and take advantage of premium pricing for 3D movies.

Some customer pushback on 3D ticket prices last summer stemmed from “misinformation,” Katzenberg said. The $20 ticket price posted for a 3D Shrek movie at a lower Manhattan theater was changed to “$16 or $17” within an hour, he said, but not before the higher price went viral over the Internet.

But the 3D premium will go up, Katzenberg said. “The appropriate premium is higher than what we're charging today,” he said, citing studios’ sensitivity to economic pressure on consumers. When the economy starts to get “more robust,” the premium for 3D tickets “will start to increase,” he said. “I'm confident it won’t retreat."

Katzenberg pointed to “accelerated growth” at the box office for 3D, noting that six of the top 10 films of the year have been in 3D and adding that he expects it to be eight of 12 by year-end. 3D has gone from zero to 20 percent of box office receipts in two years, he said, and comparable growth will continue the next 24 months. The number of 3D screens will jump, he said, a significant amount of the growth coming from the international market. Of the 14,500 3D screens, roughly 7,400 are in North America, he said, and 2D-3D cinema screen conversions are taking place at 500 a week. Katzenberg said 30,000 3D screens should be in place around the world by summer 2011 and the high growth will continue the next three years. China, with more than 2,000 3D screens, has more than any other country besides the U.S. and is commanding 3D ticket prices of $12, he said. 3D ticket premiums in the U.S. are roughly $3.50, according to industry observers.

In response to a question about high-quality 2D-3D conversion expanding available 3D content, Katzenberg said the “pinnacle” of 3D production will always be content conceived and designed by filmmakers using “amazing state-of-the-art 3D tools.” Today, 2D-3D conversion is of varying quality, and “we've seen pretty much the bottom of it,” with “straight pass-through” of right eye-left eye conversion, Katzenberg said, adding, it “looks like junk.” That technique, which leaves processing decisions to an algorithm, “doesn’t work, it’s not good and the consumer isn’t going to buy it,” he said. But he believes that conversion can be done effectively frame by frame “with an artistic point of view,” filmmakers making “the subjective choices that need to be made” to create high-quality 3D presentations using the right tools. Katzenberg noted that George Lukas is converting Star Wars films and said he’s “certain they'll be done impeccably and creatively” -- unlike the Harry Potter movie out earlier in the year, which he said suffered in the conversion from a lack of time “to deliver the quality they felt they needed.” He described the conversion process as creative and artistic, requiring re-compositing of shots and other subjective decisions. “The tools are there if you have the creative resources, time and money,” he said.

Jon Landau, producer of Avatar, spoke about his view of the fast adoption of 3D in theaters. Landau said that in pre-production the Avatar production group had a “litmus test” of 1,000 domestic screens and 150 worldwide for the movie’s release date. To hear the numbers Katzenberg cited for 22,000 screens next year and 30,000 by 2012, is “remarkable,” he said, and owes to technology and the quality of 3D. DreamWorks decided before settling on Avatar that its next movie would be in 3D, Landau said. It wasn’t 3D that held back production, he said. “We were waiting for facial capture technology” and from here on out all movies coming out of the studio will be 3D.

Asked about widespread adoption of 3D, Landau said it’s a decision for filmmakers, based on their comfort with digital technology. “To do 3D right” it has to be shot in digital, he said, and many directors are “more comfortable with film.” There are various reasons people might not want to do 3D, he said, “but I think they should.” The second and third Avatar movies will be 3D and will focus on “the same people on the same planet” later in their lives, Landau said. “And they might go under water a bit.”