Film executives scoff at notion of "3D fatigue"

LOS ANGELES (Hollywood Reporter) - The sky isn’t falling, but ticket sales for 3D movies may be finding their natural water level.

A 3D display is seen through 3D glasses during a demonstration by virtual reality contents and technology provider Solidray Co at the 3D and Virtual Reality Expo in Tokyo June 23, 2010. REUTERS/Yuriko Nakao

That, in an extra-dimensional nutshell, is how studio executives feel about recent signs that the ratio of 3D-to-2D grosses for pictures has settled into a range just below that marked by early 3D releases when the format was a consumer novelty. They scoff at the notion of “3D fatigue” floated in a spate of media reports while acknowledging pricing may have outpaced demand for some family pictures.

Some reports first took note of the situation when Disney’s “Toy Story 3” -- which has quickly rung up $635 million at the worldwide box office -- opened last month with a studio-estimated 60% 3D contribution. Just a few months earlier, Disney’s “Alice in Wonderland” and DreamWorks Animation’s “How to Train Your Dragon” had rung up a lustier two-thirds of their box office in 3D auditoriums.

“‘Toy Story 3’ may gross up to $400 million domestically,” a top distribution executive at a rival studio noted. “To suggest anything is wrong with that makes no sense.”

More Chicken Littles surfaced when Universal’s July 9 opener “Despicable Me” bowed with an estimated 45% of its first-weekend sales coming from 3D venues. But few industryites expected anything else in light of the picture’s modest number of 1,551 3D theaters, a result of too many 3D pics in the marketplace and too few 3D screens available in the nation’s movie theaters.

“Despite any lower 3D percentage, there’s still considerable incremental gross advantage to both distributors and exhibitors,” Universal distribution president Nikki Rocco said. “But I do love offering moviegoers the option of seeing a picture in either format. Having audiences be able to make a choice for the family is a good thing.”

Paramount’s July 1 release “The Last Airbender” boasted a similarly modest number of 3D locations while marking a 3D share of 55%. It’s worth noting that the family fantasy bowed among broadly derisive reviews that were hardly an encouragement for parents to shell out extra for the pic’s extra-dimensional version.

The 3D-to-2D gross decline follows the phenomenal 82% average 3D share marked by “Avatar” during its record theatrical run. But the Fox blockbuster -- virtually the only 3D release in the market for much of its run -- was an unusual mix of motion-capture animation and live action, and word quickly spread following its December debut that 3D was the way to see the epic fantasy.

By contrast, pictures such as Warner Bros.’ April opener “Clash of the Titans” -- which enjoyed a mere 52% 3D contribution -- drew widespread criticism for their low-budget approach to converting the pic from 2D to 3D before release.

The industry screen crunch is expected to linger as Hollywood ramps up the number of 3D pics while theater operators struggle to outfit screens for 3D capability fast enough.

As for the pricing question, exhibitors privately acknowledge they continue to assess what the market will bear, with family pictures clearly more resistant to aggressive 3D upcharges.

DreamWorks Animation chief Jeffrey Katzenberg has backed exhibitors’ desire to push the premium-pricing envelope, but the marketplace does have its limits. AMC ordered managers at a few of its New York multiplexes to chop their $20 admission price on DreamWorks’ “Shrek Forever After” after the unprecedented high price drew media attention.

Wall Street analysts following exhibition stocks seem to be taking the adjustment in 3D contributions in stride.

“While recent articles have painted ‘declining’ 3D share trends as the culprit for recent box office woes, we place the blame squarely on mediocre film content,” Piper Jaffray analyst James March wrote in a research report circulated Wednesday.