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Consumer Electronics Devices

Is this the end, again, in 3D?

The first 3D movie I remember watching was Spacehunter: Adventures in the Forbidden Zone starring Molly Ringwald.  I was 10 years old.  My aunt took me to see the film because she figured kids would like 3D.  As I left the theater I was thinking, “That was cool… things really jumped off the screen.”

The next 3D movie I saw was The Nightmare Before Christmas in 3D.  I was 33 years old.  My friend and I took his 10 year old son to see the film because we figured kids would like 3D.  As I left the theater I was thinking, “That was cool… things really jumped off the screen.”

DurParks Associates - 3D TV market researching the 23 years between my first and second 3D experience, many things changed:  3D movies fizzled, Molly Ringwald’s career fizzled, 3D movies came back again; Molly Ringwald’s career came back again.  During the two-decade stretch I also became a research analyst pondering the fate of 3D and my experiences led me to wonder if history is about to repeat itself again.  Will the latest resurgence of 3D not last any longer than Molly Ringwald’s return to TV?  Two decades from now, will I be watching my third 3D movie with my 10 year old grandson thinking, “That was cool… things really jumped off the screen?”  I don’t think so.

Parks Associates recently completed a Market Focus report on 3D entitled, 3D TVs: Adoption, Use and Purchase Intentions.  The study was part of our Connected CE and Platforms research service and for it, we asked over 600 3D TV owners how often they used the 3D feature, what they watched, what they liked and what they disliked.  We found that most people really liked 3D.  Over one-half were “very” satisfied with it and a majority said they use it on a monthly basis.  (A surprising one-quarter said they used it daily/almost daily.)  Hand-in-hand with this, most people wanted more 3D content for their TV.

  Parks Associates - Consumer Satisfaction with 3D TV

That’s the good news.  The people that have a 3D TV set, use it, like it, and want more content for it.  Now for the bad news.  3D TV adoption rates are going up at a snail’s pace and the percentage of TV shoppers looking for a 3D TV set is holding constant.  Translation: The “That was cool…things really jumped off the screen” experience isn’t driving 3D TV sales.  So what’s the problem?  I’ll make a couple of observations:

1) 3D TV is (of course) a classic chicken-and-egg scenario.  The limited amount of 3D content undermines the value of the technology which dampens adoption which removes the incentive for more content.

2) 3D isn’t like HD in the sense that once you see it, there’s no going back.  3D is enjoyable but consumers don’t want to watch everything in 3D.  Firstly, the glasses are uncomfortable and secondly, not all content is better in 3D.  (Who would want to watch Morning Joe in 3D??)  Conversely, when was the last time you said, “I’d rather watch that program in standard-definition.)  The difference has a couple of consequences.  It means one 3D TV set is likely enough for many households—those that buy and like a 3D TV set won’t necessarily go buy another one.  It also means we’re never going to watch 3D content out of habit.  It will always be a conscious choice that hinges on content.  No fresh 3D content, no 3D viewing.

All that’s to say, 3D TV usage will correlate with the amount of content available (chicken & egg).  3D TV adoption, on the other hand, might not be eternally confined by this paradox.  3D TVs sell at a considerable premium today.  (The cheapest model on the Best Buy website is $700.)  Nevertheless, the incremental cost of making a TV “3D capable” is quite marginal.  Once manufactures have wrung out the profits from the high-end of the market, 3D TV prices will come down which will increase adoption.  Adoption won’t necessarily mean immediate use of the 3D TV feature (think of all those SmartTV owners that have never connected it to the Internet) but the growing installed base of 3D sets will make for a field of little eggs that will one day hatch into chickens.  3D may have gotten off to a slow start but this time, the odds are better it will eventually establish a lasting market presence.  Who knows, I may even see another 3D movie before the end of the decade.

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