Analyst Questions 3D’s Chances at Home Following Recent Series of Setbacks

AT&T’s decision to drop ESPN 3D was one of the recent events that led BTIG analyst Richard Greenfield, a frequent detractor of the format, to posit that it’s dead-on-arrival in the home, in a blog post Tuesday. In addition to AT&T’s decision, which it said was due to low customer interest and price, Greenfield cited comments by Electronic Arts Chief Financial Officer John Riccitiello last week that EA hasn’t seen a big uptake for 3D gaming (CED Aug 1 p9) in the home, “at least not yet.” In addition, Greenfield opined, “The Nintendo 3DS has also been a complete failure, with Nintendo recently having to drastically cut price just three months after the product’s debut.” He cited a study reported in the July 21 issue of The Journal of Vision, which Greenfield said showed that “discomfort and fatigue from 3D were greater at short viewing distances” such as those for TV viewing.

Greenfield also targeted hardware pricing. Regarding price premiums for 3D TV, he said, “3D is simply not compelling technology for the average consumer and they certainly do not want to pay more for it.” In reference to RealD’s CE strategy for the home, which so far includes Samsung TVs and PCs, Greenfield said, “Price is a key flaw in RealD’s in-home CE strategy, as their technology would increase the retail cost of 3D panels to TV, computer and tablet manufacturers."

Claiming that excitement for 3D in theaters has fallen off “dramatically” in the past year, the analyst said “3D in the home has never really gotten started. … We wonder if it ever will.” Greenfield said: “Consumer electronics 3D bulls continue to blame lack of content for slow sales of 3D devices. However, the content makers and distributors apparently are already beginning to give up."

Companies working in the 3D space “accept that there are challenges, but also believe that with cooperation, patience, and the building of a knowledge base, they are surmountable,” Heidi Hoffman, managing director of the 3D@Home Consortium, told us. Member companies are making “aggressive business decisions on 3D” including “doubling the number of 3D SKUs next year,” she said. Content also is on the rise, including movies and TV programming, Hoffman said.

Hoffman acknowledged adjustments being made in 3D “channel lineups, marketing plans and product pricing” and expects more to take place as “the hyper-drive subsides and realistic and reasonable business and technology decisions are made.” Current 3D@Home projects in the works to further the format include enabling interoperability among all 3D capable devices; determining optimal distribution methods, including streaming, for 3D; ensuring a comfortable 3D viewing experience; and employing marketing that builds consumer confidence and knowledge in 3D overall. Work is under way on all of these items in several different forums, including within 3D@Home, she said. Continuing to build the foundation “isn’t a glamorous endeavor,” she said.