Worldwide 3D Box-Office Cracks $6 Billion, So Where’s All the Money?

Global box-office revenue from 3D movie screens more than doubled in 2010, reaching a total of $6.1 billion, compared to just $2.5 billion in 2009, according to a new IHS Screen Digest Cinema Intelligence report. North America accounted for 36.1 percent of the total, and 32.8 percent — $2.0 billion — came from the United States.

IHS said 3D represented 19.3 percent of all box-office receipts last year, up from 8.6 percent in 2009. That's certainly dramatic growth for the 3D market, but what the IHS announcement didn't address is what that growth actually means in terms of profitability.

As of June 2011, the firm said, there were more than 30,000 3D screens in existence worldwide. "At least one in four of the world's screens is now 3D-capable," said Charlotte Jones, senior analyst for cinema. "But … the global market still is dominated by U.S. releases, which accounted for more than 90 percent of revenue from international 3D screens." For example, the top titles in second-strongest 3D market Japan included Avatar, Alice in Wonderland, Toy Story 3, and the Japanese release Umizaru 3: The Last Message.

Articles like this one in Variety suggest that the number of Hollywood studio releases in 3D roughly doubled over the same time frame, and various reports suggest a growth rate at least that high for 3D screens. Consulting firm DIGDIA said the number of 3D screens worldwide grew from 5000 in mid-2009 to more than 22,000 at the end of 2010. IHS says that number is now north of 30,000.

So if the good news is there are twice as many 3D movie tickets being sold, the bad news is there are twice as many movies competing for 3D dollars, and twice as many screens competing for ticket-buyers. As long as 3D revenue remains roughly flat on a per-feature or per-screen basis, big numbers don't necessarily translate into a growth in anybody's profitability where 3D is concerned.

It's very helpful for Hollywood studios that few 3D movies are being made overseas — the lack of competition for 3D dollars on the international market dramatically expands the prospects for making back the money spent on shooting in 3D or converting footage. But box-office evidence suggests that it's getting harder to make money on 3D in the U.S. — this weekend's big 3D release, Final Destination 5 (pictured), got better reviews than its predecessor (which was also in 3D) and seemed to be at least as well promoted by Warner Bros. But its estimated $18 million opening isn't a patch on FD4's $27 million take.

Are viewers just sick of Final Destination movies, or is it a case of 3D fatigue? It's hard to argue at this point that 3D might actually hurt a film at the box-office — 2D screenings are generally available for those who dislike 3D, and the three-buck premium for 3D showings is still a nice box-office bump from the rest of the audience. But stereo 3D is no longer a license to print money.

A lot of observers are waiting for a renaissance of 3D cable channels to start generating a vigorous aftermarket for these movies and other stereo content, but consumer uptake has been slow. Sales of 3D-enabled TVs have lagged far behind expectations. Earlier this month, AT&T surprised the industry by unceremoniously dropping the high-profile ESPN 3D channel from its U-Verse line-up, citing low consumer demand. It should be noted that AT&T charged subscribers an extra $10/month for 3D content, which could explain a relative lack of enthusiasm for the channel among those customers. (My FiOS package includes it for free.) But since when does a new ESPN channel lose viewers after a year, rather than gaining them? That's a bad break for ESPN, and another bad omen for 3D TV.