It’s not news that movie studios leverage 3D as a profit boosting tool, with theaters currently charging about three dollars extra per ticket for the privilege of viewing a given production with artificial depth added (often more than can be said about the characters in the script). Now, Sony proposes ending the standard practice of providing theaters with the glasses used to watch their movies. Providing a theater with RealD glasses costs Sony about fifty cents per ticket, for a total of between $5 and $10 million per feature film. Contrary to popular belief, theaters don’t charge extra for those tickets to cover the expense of issuing glasses. Rather, it’s a combination of their expense converting their projectors to 3D capability and the fact that they can get away with it. The move is expected to come on May 12, 2012, right before the summer blockbuster hits are released, including Men in Black III and the next Spider-Man installment.
The announcement caused an immediate negative impact on RealD, Inc. stocks, only one day after Merriman Capital outlined buyout speculation of RealD that boosted their stock 10 percent.
Other movie studios suggest they may follow Sony in ending the practice of footing the bill for the glasses, but theater chains are understandably unhappy with the idea. RealD’s entire business model counts on a proliferation of 3D movies as well, and asking viewers to pay even more to see them may dissuade them from watching, especially in a poor economy.
Interestingly too, one of the more popular technologies for watching 3D movies at home utilizes passive, polarized glasses just like RealD’s theater glasses. Both Visio and LG market televisions using this method, versus more expensive and bulky active shutter glasses. As these TVs proliferate, owners will become more likely to hang onto their theater glasses after a 3D movie is over, for use at home. Currently, at least part of the cost of supplying RealD glasses to viewers is offset by theaters offering recycling bins for them near the exits.
Perhaps Sony is being penny wise, but pound foolish with this move.
Comments are closed.