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Manufacturers Push 3D TVs, But Challenges Remain

Now that 3D versions of movies have proven to be cash cows at the box office, the entertainment and consumer electronics industries are hoping to cash in on the experience in people's homes—and there's likely to be plenty of product and programming announcements around CES 2010.

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Major television manufacturers like Sony , LG and Panasonic are releasing 3D TVs this year, seeing the technology as a major growth business.

LG, for example, plans to make and sell 400,000 such televisions this year and some 3 million in 2011.

“I think that they have become more emboldened by the recent success of 3D films,” says Lance Ulanoff, editor in chief of PCMag.com. "They have been raking in the dough."

Studios released about 14 3D films last year, up from four in 2008. Most of the movies fit into three categories: animated films (like "Up," from TheWalt Disney Company's film unit Walt Disney Pictures), concert recordings ("Jonas Brothers: The 3D Concert Experience," also from Disney) and horror films (like "The Final Destination," from New Line Cinema, a unit of Time Warner .)

The 3D version of movies released in 2009 have been mostly successful. Some have been very successful, contributing 50 percent or more of a film’s total box office gross.

"Avatar", from Twentieth Century Fox , a unit of News Corp. , earned $77 million the weekend it opened; 3D screenings accounted for $55 million of the gross, according to BoxOfficeMojo.com.

But while audiences are flocking to movie theaters to watch 3D, experts say it could take several years before consumers bring the technology home. HDTV, for example, was first released in the mid 90s and didn't become a mainstay of American homes until several years later.

“This technology will bleed into consumers homes slowly,” said Ulanoff.

About 38 percent of U.S. consumers would like to be able to watch 3D video in their homes, according to a Deloitte study. The number is higher for the younger generation: 51 percent of those between 14 and 26 wanted to watch 3D at home.

"The numbers are not overwhelming,” says Ed Moran, director of insights and innovation at Deloitte.

Analysts say that 3D home entertainment may have a similar slow roll out in American homes, much like HDTV did, for three main reasons:

1.Lack of content.

Although over a dozen 3D films were released in 2009, they're not yet available in a format that can be watched on a 3D TV.

The Blu-ray Disc Association announced technical specifications for bringing 3D to Blu-ray in mid-December 2009. The specifications allow manufacturers of Blu-ray players and distributors of the discs to make products that can work together.

Blu-ray players that will support 3D discs were announced from most of the manufacturers at CES, and will be released later this year.

As for television programming, there are no plans to film mainstream broadcast television programs in 3D yet, although two 3D cable channels have been announced so far.

ESPN, the Walt Disney Company's sports cable network, announced plans to launch a 3D network and broadcast over 80 live sporting events starting in June 2010.

Discovery Communications , Sony and Imax won't launch their channel until 2011.

2. Special glasses could be a turnoff.

The televisions being introduced in 2010 will require wearing 3D glasses, which could have some push back from customers. Although consumers have gotten use to wearing 3D glasses in the movie theater, there is little distraction in theaters from other devices, like the computer.

Most television watchers are multi-tasking at home—watching or listening to TV while sending email or searching the Web on their laptop, a practice that doesn't work well if they're also wearing special glasses, says Vincent Teulade, director of the telecommunication media and technology practice at PricewaterhouseCoopers.

"You need to be very much involved with the content" to want to watch something in 3D, says Teulade. He expects consumers to be more accepting of 3D glasses for the purpose of playing video games or watching sports or movies.

Group use is another issue. If people want to watch a sporting event or movie together, all participants will need glasses.

Television manufacturers haven't said how many glasses will come with a television set when it is purchased, but some TV companies have been making deals with makers of 3D glasses. Samsung, JVC and Sony, for example, have all hooked up with RealD, a maker of glasses. At this point, experts suspect that glasses will be sold as a bundle with the televisions.

If that's not enough, there's one more obstacle—and a very basic one: “People already have enough trouble finding their remote control," says Ulanoff, adding a couple of glasses to the mix might be more than consumers want to handle.

3.Buying new equipment may be costly.

Of course, consumers will have to buy new 3D televisions and Blu-ray players, which will be expensive. No pricing information has been made public yet, but experts say the new equipment should only cost a few hundred dollars more than HDTVs and the current generation of Blu-ray players.

Although the price difference might not be huge, consumers might balk at updating their home entertainment systems again.

“They all just finished buying HDTVs,” said Ulanoff, “They’re not going to want to upgrade too soon.”

(Editors Note: This story was updated from its original publish date of Jan. 5, 2010.)

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