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.

1. Waiting for the
next wave
3D entertainment 2012
www.pwc.com

2. Contents
Introduction 1
3D films 2
3D television 10
Other 3D screens 16
3D screens’ penetration forecast 18
2 Waiting for the next wave

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. 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.htm
2 Waiting for the next wave

5. Another positive development in 3D is So what lies ahead for the Development of 3D
the strong performance abroad of 3D 3D film industry?
films from the US studios (see figures The number of 3D films released
films in 2011 was
11, 12 and 13). The critical markets for has stabilised, with the number of sharply mixed with
US studios outside the US had strong
years in 2011, and the 3D price
3D films announced and planned
for 2012, comparable in number
disappointing US
premium held up, though much more to those released in 2011 (see box-office figures for
so on IMAX screens. figure 14). 3D films and pressure
China, now the world’s second‑biggest The disappointments of 2011 have on 3D ticket premiums
film market after the US, has a growing created risk aversion. One lesson partially balanced by
middle class that enjoys a night out. learned is that 3D does best when it
And China is taking steps to encourage concentrates on animation, or on
a growing number of
3D growth. For years, China limited established franchises. As a result, 3D screens and strong
the number of foreign films that could
be 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 strong
were shown in 3D or large format. track record of their predecessors.
We will also see 3D re-releases of
The 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 not
count against that total. likely to flourish (see figure 15).
Outside China, the share of box-office
revenues generated by 3D remains
relatively high, except in the US
In the medium term, another cause for
optimism is that some of the biggest
names in film‑making – Martin
Scorcese, George Lucas, Steven
Spielberg or Peter Jackson, along with
James Cameron – have committed to
3D. Scorcese’s ‘Hugo’ was released in
late 2011, and Scorcese was pleased
with the result and said he would
direct more 3D films; Jackson’s ‘The
Hobbit’ will be released in late 2012.
Just as encouraging for 3D is the
emergence of an increasingly solid 3D
production and post‑production
ecosystem in the US demand continues
to grow for skilled 3D professionals;
one service provider said that more
than half of all demand for film
professionals involves 3D. So people are
being trained, and they are finding work.
3D entertainment 2012 3

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 analysis
4 Waiting for the next wave

7. Figure 4: Films released in 3D among Top 20 grossing films in the US
2007 2008 2009 2010 2011
1 Spider‑Man 3 Dark Knight Transformers 2 Toy Story 3 Harry Potter 7 – Part 2
2 Shrek the Third Iron Man Avatar Avatar Transformers
3 Transformers Indiana Jones 4 Harry Potter Alice in Wonderland Twilight – Breaking
Dawn 1
4 Pirates of the Carib. Hancock Up Iron Man 2 Hangover 2
5 Harry Potter WALL‑E Twilight – New Moon Twilight: Eclipse Pirates of the
Caribbean
6 Bourne Ultimatum Kung Fu Panda Hangover Inception Fast Five
7 300 Madagascar Star Trek Harry Potter 7– Part 1 Cars 2
8 Ratatouille Twilight Blind Side Despicable Me Thor
9 I Am Legend Quantum of Solace Monster vs. Aliens Shrek 4 Rise of Planet of the
Apes
10 The Simpsons Horton Hears a Who Ice Age – 3 Harry Potter 7 – Part 2 Captain America
11 Wild Hogs Sex & the City X‑Men Origins How to Train Your The Help
Dragon
12 Alvin and the Mamma Mia! Night at the Museum 2 Karate Kid Bridesmaids
Chipmunks
13 Knocked Up Juno Proposal Tangled Kung Fu Panda 2
14 National Treasure 2 Chronicles of Narnia 2012 Clash of Titans X‑Men First Class
15 Rush Hour 3 Incredible Hulk Alvin and the Grown Ups Puss in Boots
Chipmunks 2
16 Live Free or Die Hard Wanted Fast & Furious Megamind Rio
17 Fantastic Four Get Smart GI Joe Last Airbender The Smurfs
18 American Gangster Four Christmases Paul Blart: Mall Cop Tron: Legacy Mission Impossible:
Ghost Protocol
19 Bee Movie Tropic Thunder Taken Shutter Island Sherlock Holmes 2
20 Night at the Museum Bolt Sherlock Holmes The Other Guys Super 8
Key Displayed in 2D and 3D 1 2 11 10
Source: PwC analysis
3D entertainment 2012 5

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 Ga'Hoole
Narnia
Tron
Gulliver's
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 films
6 Waiting for the next wave

9. Figure 8: Share of 3D in terms of box-office revenues and cinema screens
2009 2010 H1 2011
100 100 100
80 80 80
Share 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. 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 analysis
8 Waiting for the next wave

11. Figure 15: 3D film listing for 2012 as of 31/12/11
January 2012 June 2012 Other announcements in terms of 3D
Beauty and the Beast 3D Abraham Lincoln: Vampire Hunter remakes
Underworld: Awakening Brave Blade Runner
February 2012 July 2012 Top Gun
The Woman in Black The Amazing Spider-Man Finding Nemo
Journey 2: The Mysterious Island Ice Age 4: Continental Drift The Killer
Star Wars: Episode I – The Phantom Step Up 4
Menace September 2012 Some directors have announced that
Ghost Rider: Spirit of Vengeance they will be only working on 3D projects
Dredd
March 2012 James Cameron
Hotel Transylvania
Dr. Seuss’ The Lorax Ridley Scott
October 2012
Mirror Mirror The Texas Chainsaw Massacre 3D
Wrath of the Titans Halloween 3D
April 2012 November 2012
Dorothy of Oz Wreck-It Ralph
Titanic 47 Ronin
The Cabin in the Woods Gravity
May 2012 Rise of the Guardians
The Avengers December 2012
Men in Black III The Hobbit: An Unexpected Journey
June 2012 Life of Pi
Madagascar 3: Europe’s Most Wanted The Great Gatsby
Prometheus
3D release of 2D film
Franchise
Source: Boxofficemojo.com
3D entertainment 2012 9

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 they
10 Waiting for the next wave

13. So why launch a 3D TV channel? Our As a result of this lack of 3D Broadcasters and
interviews confirm that most players programming, most 3D TV viewing is
are 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 3D
reward their subscribers with the expectations for 3D video content can
highest average revenue per user, be fulfilled by Blu‑ray, and the number
TV is not likely to be a
increasing the perception of value of Blu‑ray titles available continues to profit centre, but rather
for money. increase sharply. In 2011, 108 3D
Blu‑ray titles were published globally,
a cost centre, for years
People 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 have
access to the programming service Another possible source of 3D
and be willing to pay for it (see figure programming is video on demand
25). It is important to understand that (VOD). Last year, Samsung announced
currently the main barriers to 3D TV that it would offer VOD with its Smart
adoption are primarily related to the 3D sets, starting with a small ‘sampling
level of subscription to HD pay‑TV menu’ and then perhaps growing into
packages; ownership of a 3D TV is a more robust fee‑based system. But
a lesser concern. that has not yet developed. Sky and the
DISH Network also announced in 2011
Note, too, that the barriers to 3D TV that they were preparing for VOD, but
differ significantly from one country to developments have been limited.
another. While we anticipate that most
barriers to 3D TV adoption should So like 3D film, 3D TV is also awaiting
decrease by 2016, a great deal of the next wave.
uncertainty remains on the availability
and attractiveness of 3D TV channels
– and when, if ever, a global market
will arise.
One obvious source for 3D TV
programming is the world of sport.
The 2012 Olympic Games in London in
July and August will be made available
in 3D. While FIFA 2010 was also
available in 3D, it did not generate a
strong demand for 3D TVs. It will be
interesting to see if the greater 3D TV
home penetration will generate more
appetite from the consumers.
3D entertainment 2012 11

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 analysis
12 Waiting for the next wave

15. Figure 19: 3D TV buyers’ perception of viewing quality, Figure 20: 3D TV buyers’ opinion on 3D content and
content 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 Disagree
Source: Strategy Analytics ( Q3 2011), DEG (Q1 2011), PwC analysis
Source: Strategy Analytics (Q3 2011), DEG (Q1 2011), PwC analysis
Figure 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. 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
I'd watch Several
most things
Rarely
times a day
next 7 days. Our
or never
in 2D I'd 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
I'd 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: PwC
14 Waiting for the next wave

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 Japan
Source: ScreenDigest, PwC model, PwC analysis
Figure 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 Other
Source: PwC analysis
3D entertainment 2012 15

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. Toshiba has announced that it will
Figure 27: Frequency of playing 3D games in Europe (in % of
offer a glasses‑free 55‑inch 3D TV set respondents who own a 3D console)
sometime in 2012, to be distributed
in the UK at a price of £7,400. At that
price, it is not likely to be a huge 80
success. Samsung estimates that ten
years are needed to develop a quality 70
3D glasses‑free TV experience at
60
a reasonable price.
50
We believe there is a high probability (%)
of success for glasses‑free 3D, especially 40
in the tablet format, where consumer
30
demand is so strong.
20
We note, too, that sales have begun to
pick up in the consumer market for 3D 10
cameras. People are taking 3D pictures
0
of their weddings and their babies’ first Never Just once A few Quite Very often
steps. So it is reasonable to assume that times often
such user‑generated content may Xbox 360 PS3
become a driver of 3D growth.
Source: Strategy Analytics (May 2011), PwC analysis
How this might play out is uncertain.
But we are all familiar with the power
of user‑generated content. So, in this
hypothesis, more people will capture
their images on 3D devices and make
In the same time, the success of
them available to others, many people motion detection has been very high
will want to view them on phones or
tablets (and perhaps on large screens),
and demand for 3D devices of many Kinect has been the fastest-
sorts will rise. This might even be one
way 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. 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. Consumers are buying 3D TV sets, and 3D mobile phones
they are using them mainly to watch
The development of 3D mobile phones
Demand continues to
films and other programmes on DVD.
Our scenario for the availability of 3D is expected to be shaped by: grow for skilled 3D
TV content anticipates the following: professionals; one
• The incremental benefits provided
by 3D photos and 3D games. service provider said
Video 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 emergence
in the short term of a full ecosystem for
3D 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