Analyst: Global 3D market flourishes
December 21, 2012
The global 3D consumer market is thriving in a dynamic environment marked by clear and discernible growth across its major platforms, including cinema, home video and pay-TV video on demand, with international markets continuing to make major contributions to the industry, according to an IHS Screen Digest Cross Platform Intelligence report from information and analytics provider IHS.
Worldwide metrics are on the rise for 3D technology as a whole. The number of 3D screens is up fourfold over a period of three years, while 3D box office climbed in the double digits from 2010 to 2011. The 3D home-video market is also showing strong growth, bucking the overall trend of a declining physical video market, with US spending on Blu-ray 3D nearly doubling in 2012 from last year’s levels. More 3DTV channels worldwide are likewise now available, including one just launched in China, with plenty of potential for expansion in the years ahead for 3D Video-on-Demand service.
“In an age where consumers have at their easy disposal a virtual treasure trove of entertainment options to draw from, the encouraging growth of the 3D medium is remarkable to behold,” said Tony Gunnarsson, analyst for video at IHS Screen Digest. “The continuing expansion of the industry is especially significant when one considers that 3D is but a small niche of overall digital viewing, and that consumers have to shell out considerably more money for 3D products, which are priced at a premium and not necessarily an easy sell in these economically uncertain times.”
The number of 3D screens worldwide has grown dramatically in three years, rising by more than a factor of four from approximately 9,000 screens at the end of 2009 to 43,000 by the third quarter this year. The US continues to have the lion’s share of 3D screens, followed by China, France, the United Kingdom and Germany.
Meanwhile, global 3D box-office revenue hit $7.0 billion in 2011—the last full year for which full figures are available—up 16 per cent from $6.0 billion in 2010. 3D accounted for 22 per cent of total world box-office receipts in 2011, up from 19 per cent the previous year.
In particular, 3D is stabilising in mature cinema markets like the US, where its share of the overall box office is no longer growing as rapidly compared to the earlier years of the format or in other countries where 3D cinema is just taking off. Increasingly, 3D revenue prospects rely on the quality of the 3D film slate, and the wealth—or relative dearth—of titles during a particular period could spell a big difference in 3D revenue prospects in the mature cinema markets.
3D screen growth is also slowing dramatically in the developed regions, where exhibitors have already made a significant investment in 3D screen infrastructure. The opposite is true in China and other emerging international markets, where the continued expansion of new-cinema screen infrastructure as well as the subsequent up-conversion rate from 2-D to 3D is pushing further growth of 3D screens.
Overall, international markets continue to account for a rising share of the worldwide 3D box office—73 per cent in 2011, up from 66 per cent in 2010 and 54 per cent in 2009, with the balance held by North America.
In the 3D home-video segment, the U.S. continues to make up the largest market for Blu-ray 3D (BD 3D), equivalent to 51 per cent of global BD 3D spending. And while both value and volume for traditional physical video are decreasing, BD 3D is an exception to the trend, with forecasts showing strong growth even out to 2016. Spending by U.S. consumers on the medium is up 94 per cent this year from 2011 levels, to $220 million, with BD 3D unit sales set to climb 105 per cent, to 9.9 million units.
“Despite the relatively small market for BD 3D, the format plays an important role for overall physical video,” Gunnarsson noted. “BD 3D is already being marketed as the ultimate home-video experience, and studios are pricing 3D home-video well above Blu-ray 2-D versions.”
Growth is also forecast for the BD 3D home-video market in the three big European markets of the United Kingdom, Germany and France.
A total of 37 unique dedicated 3D channels have been launched worldwide since 2010, plus another 38 dedicated 3D event broadcasts. Nonetheless, 3DTV launches slowed considerably in 2012, due to uncertainty about investing in, and maintaining, dedicated linear 3D channels. On the plus side were the positive developments on programming, such as the formation of 3Net, a joint venture among Sony, Imax and Discovery to focus on 3D output including documentaries and other niche genres.
Some pay-TV operators have also sought to provide 3D movies on a Video-on-Demand basis. Movies and documentaries—not live or original content—are the basis for 3D VoD, but the overall limited slate as well as the higher price of 3D video-on-demand (VoD) movies—as much as 30 per cent over HD titles—may serve to discourage some consumers from adopting the service in the short term.
Even so, the 3D VoD market will overcome such obstacles in the years ahead. U.S. consumers, for instance, will spend $76.1 million for 3D VoD by 2016, up from $11.1 million this year. European viewers, meanwhile, will fork out $32.4 million, compared to just $3.5 million during the same period.
Penetration for 3D remains highest in 2012 across cinema-screen infrastructure, driven by higher per-ticket revenue and the continued practice of major studios releasing blockbuster titles in 3D.
In homes, 3D penetration is dependent on households upgrading to 3DTVs as well as 3D BD players and the associated 3D glasses. 3D features are becoming a standard on high-end HDTV sets and BD players in the forecast period to 2016, resulting in a growing segment of households in developed markets being ripe for 3D movies viewing. By 2016, the penetration of 3D ready TV households will have surpassed that of 3D cinema screens in select markets worldwide.
The largest international footprint overall for 3D cinema this year belongs to China, where more than 8,000 screens had been installed as of the third quarter—more than double from a year earlier—as the rapidly growing screen infrastructure makes a significant contribution.
The country’s BD 3D space, however, is still in infancy, owing to the lack of a legitimate physical video market in the country in light of rampant piracy. The ability of Chinese manufacturers to integrate 3D as standard feature will also have a significant impact on 3DTV broadcasts moving forward, after Chinese public broadcaster CCTV launched the first 3DTV channel in the country on a trial basis earlier this year.