Followers of the industry will no doubt recall the unstoppable buzz at the 2010 CES Show in Las Vegas, where the story was 3DTV, and how it was poised to overtake the American living room. In the ensuing 12 months, though, it seems that much of the excitement around the technology has subsided?if not evaporated.
Indeed, we shared our views on the 3DTV opportunity at this year?s IBC in Amsterdam: essentially saying that consumer excitement around the technology was quite high, but that translating that enthusiasm into a viable business model would be a challenge. Our feelings in that regard haven?t changed substantively.
Content and the Indelicate Topic of Money
What we have seen in the past five months, however, has been a swift roll out of 3DTV programming worldwide. Two notable examples are 3net, the joint venture of Sony Corporation, Discovery Communications and IMAX Corporation, as well as ESPN?s announcement of its dedicated 3DTV channel.
Now Cable and Media behemoth Comcast has announced the launch of its 24/7 3DTV Xfinity 3D channel for next week, focusing, it says, on ?music, sports, movies and original programming.?
A crucial, and often over-looked, question is: who will actually pay for this? There are significant premiums associated with producing content in 3D compared to 2D. Our estimates based on industry interview set the premium in the range of 80% to 100%. In the theaters, it is the moviegoer who pays the premium to see the latest 3DTV release?indeed it is evident in the ticket price.
The question is, who pays at home?
Market for 3DTV: It?s The Cube Tubers
As we have pointed out in the past, our US consumer survey research and forecast modeling suggest only a relatively modest opportunity for 3DTV in the home. Overall, fewer than half of respondents showed a willingness or expectation to pay any premium for 3DTV.
We have, however, identified and isolated a group of consumers we believe to be most likely to actively view (and more importantly, pay for) 3DTV services.
This group of individuals, whom we dub ?Cube Tubers,? represents between 8%-10% of the overall population. Cube Tubers are unique in their intentions to purchase a 3DTV in the upcoming year, and to be active premium/HD customers.
Compared to overall survey respondents, Cube Tubers exhibit a much higher interest in receiving 3DTV programming at home, with 74% saying they are ?somewhat? or ?very? interested, compared to 36% in the overall sample. Likewise, they were significantly more likely to expect to pay some sort of monthly or one-off premium than the general sample.
Content aside, 3DTV still faces an uphill battle in other respects. Perceived health risks (true or not) will stifle widespread takeup, as will the need for specialized glasses.
Despite impressive demonstrations of ?Auto-stereoscopic? 3DTVs by vendors at recent trade shows, we don?t expect to see a commercially viable ?glassless? solution any time soon.