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In Hollywood, tinkering for future box-office receipts

"Catching Fire"
Source: Lionsgate
"Catching Fire"

Whether we're talking IMAX cameras, used to shoot portions of Lionsgate's recently released "Hunger Games: Catching Fire," or 3-D cameras employed for Warner Brothers' "Gravity," technology is shaping many moviegoers' experiences. And Hollywood is just getting started.

The film industry is pushing deeper into technology, as competition heats up for consumers' attention and dollars. From Netflix's original programming to cable's stable of dramas, some viewers need an extra push off couches into movie theaters.

"What's clearly happening is massive growth in Internet-distributed content. People are watching through their consoles and [Apple] iPads," said Edward Williams, a research analyst at BMO Capital Markets. "We're likely to see the industry focus on big-event production, to create the need to see content maybe not on an individual screen, but on a large silver screen—where you can't really duplicate that experience," he said.

Forget the ad slogan of "Must See TV." The film industry is gunning for must-see movies in a theater near you.

Hollywood's use of special effects to lure audiences is hardly a new strategy—1939's "Wizard of Oz" was considered a marvel at the time with pre-computer era rear-projection screens used to recreate the splendor of Emerald City. But the development of new techniques is now rapid fire. And today, especially for American moviegoers—for whom more is, well, more—Sandra Bullock tumbling in space in 3-D is just the the appetizer. Filmmakers already are experimenting with Google Glass and GoPro cameras to film and create wow-effect footage and in-theater experiences.

GoPro cameras—the creation of now billionaire entrepreneur Nick Woodman—have gained traction as a way to shoot extreme action shots, which previously were not possible or were very expensive to shoot. Established directors including George Lucas and newcomers participating in the Sundance Film Festival have used GoPro cameras, said Wil Tidman, the camera company's head of production.

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Battle of the platforms

To a certain extent, Hollywood's future is shaping into a battle of camera and distribution platforms, jockeying for market share. Camera makers, businesses that enable 3-D projection inside movie theaters and homes, plus movie theater operators all court one another to use their respective platforms. Though deals vary, doing business sometimes entails revenue sharing arrangements.

Of course, no single media giant holds all the keys to the content-making Hollywood kingdom, or distribution pipes that range from big theaters to video-on-demand platforms. But the idea is to carve as big a chunk as possible of that media pie.

Professional filmmakers and studios, meanwhile, already are singling out technologies. An example is RED cameras, the brainchild of entrepreneur Jim Jannard, who's also behind the Oakley sport and sunglasses brand. RED cameras combine the hypersharp quality of digital, still-camera photography with the world of motion pictures. Sony's "The Social Network" about Facebook's founding, for instance, was shot with RED cameras.

More recently, filmmakers shot portions of the latest "Hunger Games" installment using IMAX cameras. "Typically a film that is visual splendor, in itself, is really good to see on IMAX. The sound is better, the image is brighter," IMAX Chief Executive Richard Gelfond told CNBC in mid-November. For the latest "Hunger Games," "every scene that was filmed in the arena was actually filmed with IMAX cameras," he said. "The last half-hour of the movie is filmed in IMAX."

To be clear, not all films shown in IMAX theaters need to be shot using IMAX cameras. But the IMAX theater is clearly a key part of the company's growth portfolio. IMAX is installing roughly 125 theaters around the world annually, said Eric Wold, senior analyst at research firm B. Riley & Co. That includes growth in international markets such as Eastern Europe and Asia including China.

Beyond IMAX, Wold also is bullish on RealD, based in Beverly Hills, Calif. RealD's technology allows theater exhibitor's to show 3-D content. The company has about 80 percent of the domestic 3-D box office cornered, Wold estimates.

So what's at stake amid all this competing technology? Serious consumer dollars.

Even in 2009 and 2010 during the depths of the Great Recession, American consumers retreated to movie theaters for entertainment and escape. Box office total gross revenue was about $10.6 billion for both those years, according to Box Office Mojo. Total gross receipts for 2007—before the 2008 crash, when the economy was pumping—was actually lower at $9.7 billion.

And big event movies with special effects bring in the big dollars. "Hunger Games" IMAX theater tickets in lower Manhattan, for example, were about $16.50 and $19.50 each for children and adult tickets, respectively. That totals more than $65 for a family of four—excluding snacks. And that's a serious chunk of change during a still bumpy economy. As a comparison, a streaming Netflix account starts at $7.99 a month.

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Pierre Finn, a film student at the University of California, Los Angeles, has experiment with many new technologies including Google Glass and GoPro cameras.
Source: Pierre Finn
Pierre Finn, a film student at the University of California, Los Angeles, has experiment with many new technologies including Google Glass and GoPro cameras.

The future

With so much money and competing technology at stake, it's no wonder studios have been getting pickier about films entering production. Film slates indeed have gotten smaller over the years, says Dan Salmon, also an analyst for BMO Capital Markets. "That's what these guys do. They're a hit-driven business," he said.

And part of that success, going forward, may lie among young filmmakers tinkering with the latest technology.

Pierre Finn, a graduate filmmaker at the University of California, Los Angeles, plans to experiment with a small GoPro camera, attached to a mini, remote-controlled helicopter to shoot aerial footage of downtown L.A. "I can buy the equipment to get workable, artistic aerial shots for under $1,000," Finn said. Just years ago, such aerial shots would have cost thousands of dollars and included sending a photographer up in the sky in a real helicopter.

And while still nascent, Google Glass—available at some film schools including UCLA—raises questions about the future of content creation and consumption. Google Glass includes a camera worn at eye level, and an additional eyepiece that contains a screen that can display photos, videos, maps, emails and social media feeds.

The ongoing proliferation and affordability of new technologies continue to open possibilities. Said Finn, thinking aloud, "How can we use these technologies to play as filmmakers?"

By CNBC's Heesun Wee. Follow her on Twitter @heesunwee

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