WHAT with the slump in DVD sales, the rise in piracy and the collapse of outside financing, Hollywood has not had much to cheer in the past couple of years. So one might expect a warm welcome for a technology that has consistently driven up revenues and profit margins. Not so. The backlash against the 3-D film is under way.

A story in the New York Timesusefully collects some film-makers' and viewers' complaints. They charge that 3-D movies are expensive to make and to watch. The cameras are hard to use. The films are dark. Because they must be shot in video rather than film, they feel somehow unreal.

Such talk could be easily dismissed if it came only from fusty film-makers known for digging in their heels against new technology. But it comes from trendy folk like Jon Favreau and J. J. Abrams. And many of the complaints have been aired at Comic-Con, an annual geeks' convention in San Diego that has become increasingly important as a marketing convention for Hollywood. If you cannot sell nerds on a new technology, what chance do you have?

Even before Comic-Con the astute media analyst Richard Greenfield was trying to interrupt Hollywood's 3-D dreams. While some films, notably “Avatar” and “Alice in Wonderland”, have performed well in 3-D, others (like “Cats and Dogs”) have bombed. More worrying still, he points out, many people seem happy to view 3-D films in two dimensions—a preference that is becoming obvious now that there are lots of 3-D screens. If Hollywood thinks it can make ends meet by charging a $3 or $3.50 premium for 3-D films, it had better think again. Indeed, a flood of bad 3-D films will sour viewers on the whole technology.

Nobody knows anything

Don't pay any attention to the critics (Hollywood certainly won't). The economics still hugely favour 3-D. It costs little more to make a 3-D film than a 2-D one. The add-on is about 10% to 15% “below the line”—that is, to the cost of production, not to the talent—and that figure may well come down as technicians become more familiar with 3-D. Cinemas could charge a lot less than $3.50 a ticket extra and everybody would still make money.

The 3-D film experience is extremely difficult to obtain illegally. Following the release of “Avatar” late last year, 2-D copies of the film quickly appeared on file-sharing networks. Such free competition didn't seem to hurt the film's box-office sales at all. In part because of piracy, in part because people have so many other entertainment choices, Hollywood is moving towards a business model based on must-see spectaculars—“event movies” in the jargon. And 3-D will be an important way of differentiating big films from the run-of-the-mill.

Sure, there will be some clumsily-converted 3-D films that offer no improvement over 2-D. That is why we have film critics and RottenTomatoes.com. Certainly, some 3-D films will fail at the box office and on DVD. But so will a goodly number of 2-D films. The studios can cope: failure is hardly an uncommon experience in Hollywood. The 3-D rush will continue.

Read on: Hollywood studios fight a proposed market in "box-office futures" (Apr 2010)

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