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Chasing 3-D Profits at ShoWest

ShoWest, the annual movie theater convention, kicks off today in Las Vegas, and everybody is talking about 3-D.

Theater chains are meeting with 3-D projector companies and studios are showcasing their upcoming films. On the heels of a huge weekend for 3-D "Alice" , it seems all conversations lead back to the huge boost this dimension is giving the industry. Just last week the nation's three largest theater chains secured $660 million in financing to convert 14,000 screens to digital by end of 2013. This is the key (expensive) step to upgrade theaters to 3-D.

Some 3,000 screens are expected to be converted to 3-D by the end of this year. This is a huge leap, considering that now there are only 3,500 3-D screens, less than 10% of the total in North America. Merriman Curhan Ford analyst Eric Wold tells me that this is an absolutely necessary step in a year with more than 20 big 3-D films, double the number last year. Wold notes that movie-goers have shown they'd always rather see a film in 3-D and that they're willing to pay a $3 premium on average for 3-D tickets.

But financing for 3-D theaters, delayed two years by the credit crunch, comes too late for a major pileup of 3-D movies coming this month. Dreamworks Animation's 3-D "How to Train Your Dragon" opens just a week before Warner Bros.' "Clash of the Titans." And they'll both be stealing from Disney's "Alice," which based on its first two weeks would have a healthy run ahead if there were enough 3-D theaters. This seems like very bad planning; it speaks to the fact that supply of big budget 3-D films is starting to really ramp up, and supply of theaters is vastly insufficient.

"Avatar" had already become the biggest movie of all time, grossing $2.7 billion at the box office, before "Alice" opened, kicking it off many screens. Still, James Cameron says that hundreds of millions of dollars were left on the table because there aren't enough 3-D theaters. It's great that the $660 million in financing *finally*came through, but it didn't happen fast enough to allow theaters and studios to maximize the potential of their films.

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