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The 3-D Economy

Tuesday, 16 Mar 2010 | 4:20 PM ET
3D audience
AP
3D audience

3-D is box office phenomenon, but it isn't just a boon for studios and theater chains — it's also big business for a number of companies behind the scenes.

These companies are out in force at ShoWest, showing off their new systems to potential customers.

The makers of 3-D systems for digital projectors and the corresponding glasses are already cashing in, and they see big 3-D dollar signs ahead.

The expansion of 3-D is creating quite a bit of competition. RealD, which is the market leader here in the US, with over 80 percent of the market. Dolby entered the game just a few years ago and is much smaller with just about 12 percent of the US market. But Dolby has doubled its number of projectors in the past year and is gaining a foothold internationally-- it has 30 percent of the global market.

Another relatively recent entry, MasterImage, has about 12 percent global share, with a focus on Europe. MasterImage has been dipping its toe into mobile, developing technology to allow people to watch 3-D videos and play 3-D games on their cell phones. It hasn't launched in the U.S. yet, but in Japan the company has already sold 300,000 units of this technology.

And even movie studios that have been hanging back when it comes to 3-D films are now making a big push. Sony plans to release four 3-D films in 2011, after just one 3-D film last year and none this year. Sony studio chief Michael Lynton says it's now clear that for big event films, viewers simply expect 3-D. His comments come on the heels of yet another stellar weekend from Disney's "Alice" and a spring schedule packed with highly anticipated 3-D films.

The rollout of more digital 3-D screens is great news for National Cinemedia, which delivers in-theater advertising and alternative programming like the Opera and sporting events to movie theaters. In order to be able to upgrade to 3-D, theaters need to implement pricey digital systems that studios can digitally send movies to. These systems also allow National Cinemedia to stream live events or fresh, targeted ads. The more digital systems, the more theaters will take National Cinemedia content, which is one reason the company expects solid double digit revenue growth this year.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.