Weekly CineBUZZ Report - 2 August 2011

"Best of Worst" Weekend B.O.

This past weekend was the best of the worst. Two DOA films - Cowboys & Aliens (Universal) and The Smurfs (Sony/Columbia) - managed to run neck and neck, but in the end the Cowboys nosed out the Smurfs (God, I watched them when I was a kid) by a few votes. I think we should demand a recount, I like Smurfs.  But never mind, with grosses of $36 mil each they'll be out of office next week. Captain America (Paramount), Harry Potter (Warner), and Crazy, Stupid Love Warner) rounded out the top five.

It was a dismal performance for a summer weekend and even more so for the folks at Comcast (parent of Universal) as the production costs for Cowboys & Aliens was over $230 million.  Next week's slate doesn't offer much solice. I don't think the Apes are going to have much of a draw - and the Cowboys and Smurfs won't have too much gas in their tanks.

Prediction:  The next really big franchise will be The Hunger Games, due out next March.  It will fill the void left by Potter and Twilight.

3D Is Going 2D
If  nothing else, 2011 has demonstrated that moviegoers' infatuation with 3D has gone from slim to anorexic.  Most of the 3D films have rated a 40% or lower attendance level as more and more moviegoers are opting for the decaffeinated 2D versions.  There are any number of reasons for this trend but it is also manifesting itself in the 3D-TV market, where sales of 3D sets have been lackluster.  What is selling are SmartTVs (TVs that are web enabled). Another bad sign for the cinema ?

Moviegoers not enamored with 3D

3D is a Hollywood gimmick which appears to have had it infamous 15 minutes (for the second time around).  3D is a value added technology which the public sees less and less value in.  The Studios want 3D to be widely and enthusiastically accepted (no less than 40 3D films are scheduled for release next year).  Of the 25 top grossing films of this year, 12 were released in 3D; however, many of those would have been big grossers irregardless: Harry Potter, Transformers, Pirates of the Caribbean, and Cars.  And of those, only Transformers had over 50% of its admissions sold for the 3D version.

Taking an arms length and honest view of the movie industry, one has to conclude that Hollywood's 3D experiment isn't working - and that's just what Wall Street has done - you know, "its only business, nothing personal".
Those companies that have high stakes in the 3D game are taking it on the chin.  RealD, a company ( probably more than any other) identified with 3D saw its stock price sink 16% last Friday to $15.48/share on the news of lower than anticipated future revenues. The share price is now 56% below its year high.

IMAX, another company that aggressively touts the 3D experience has seen its share price free fall, as last Thursday it reported that second quarter net income decreased by 87% year-over-year.  Its current share price of $18.96 represents a 56% annualized decline since the beginning of the year.

It appears that 3D is going 2D. Premium 3D admisssion pricing will have to decline or 3D movies will disappear altogether. 3D is a great visual experience for many of us, but the Studios over played their hand and misjudged the public's perceived entertainment value for the 3D experience.

Panasonic's Newest 3D Projector

Speaking of 3D - the requirement for purchasing 3D as an add-on to a D-Cinema platform gets less everyday, as 3D enabled commercial projectors enter the market.  The latest is the Panasonic PT-AE7000U, a full HD 3D projector sporting a 300,000:1 contract ratio at 2000 lumens for under $3,500.  Created to produce cinema quality images the latest 3D projectors can playback 2D and 3D BluRays.

Tell me again. Why do cinemas need the elaborate, studio-conceived Digital Cinema Projection System w/3D option ?

More on 3D vs. Smart TVs
In-Stat, the media research firm reported that sales of SmartTVs will grow by 36% per year for the next 5 years.  Built in applications (like Netflix and YouTube) are the big driver for these web-enabled HDTVs.  In-Stat's findings are in line with other forecasts.  DisplaySearch, a media consulting group, expects, "sales of connected TVs to grow at a compound rate of 30% and total shipments reaching 120 million by 2014".

Currently, 22% of U.S. households with a web connection or WiFi have a SmartTV, and out of those, 60% use a built-in app at least once a week.

Keith Nissen, In-Stat's director  of research, says that "Netflix and YouTube dominate the TV app space, but as Netflix's competitors become more numerous and apps are optimized for larger (SmartTV) screens, TV apps will be part of the mainstream TV viewing experience."  In addition to accessing apps, consumers seem not to mind paying for both TV and on-line video services - and why not?  A trip to the cinema for two can easily reach the $70 range.

Best and Happy Movie Going!
Jim Lavorato