Cable Builds 3-D Inroads to TV

But When Will Advertisers Be Ready?

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LOS ANGELES ( -- After a breakthrough year at the box office in 2009, 3-D is now poised to enter the small screen via two cable networks and an onslaught of 3-D TVs, many to be unveiled at the Consumer Electronics Show in Las Vegas this week.

ESPN will launch the first 3-D cable network, ESPN 3D, in June.
ESPN will launch the first 3-D cable network, ESPN 3D, in June. Credit: Scott Clarke
The new hardware and two channels -- one from ESPN and the other from a venture between Discovery, Sony and Imax -- bring potentially huge implications for TV.

But the near-term outlook is still cloudy.

Adjustment period
Advertisers took years to embrace high-definition TV; it wasn't until 2007 that Starcom clients and Discovery held the first dedicated HD upfront. Now marketers will need time to adopt 3-D, especially because producing 3-D ads can cost an extra 10% to 20%.

Last year DreamWorks Animation partnered with Pepsi and Intel for a Super Bowl event promoting the studio's "Monsters vs. Aliens," the first time advertisers brought movielike 3-D into living rooms.

Although the Super Bowl stunt generated a 70% boost in awareness for the film, DreamWorks Animation Chief Marketing Officer Anne Globe recently told Ad Age the investment may not bear repeating any time soon. "Distributing 125 million pairs of glasses at retail had certainly not been done before -- and I daresay won't be done again -- but we had terrific partners in Pepsi that helped us get that done," she said.

Slow to embrace 3-D in cinema
Marketers have also been slow to embrace 3-D in cinema, where the vast majority of 3-D entertainment is currently being viewed. Only one advertiser has rolled out a national 3-D ad campaign in cinemas, a Mars effort promoting Skittles that appeared during screenings of May's "Battle for Terra." Screenvision, which sold the ad, estimated that 3D ads can cost as much as an incremental $70,000 to convert for cinemas.

But converting 2-D ads can curb some expenses and even correct some risky errors presented by live camera crews filming in 3-D. Simon Tidnam, VP-sales and marketing for 3-D technology company HDlogix, said networks such as ESPN and Discovery would be wise to pursue more long-term-programming investments when it comes to the incremental costs of producing in 3-D.

"If you want to do a single live event in 3-D, as you scale it up the costs will come down, but in the initial stages of a 3-D rollout it can be fairly expensive," he said. He declined to estimate the costs involved, saying the demos and demand at CES will have a big influence on pricing going forward this year.

Of course, the most resonant sign that 3-D is already being embraced by consumers is at the movies, where "Avatar" just whizzed past the $350 million mark at the box office, 75% of which was based on 3-D ticket sales.

That's partly why ESPN rolled out its first series of 3-D tests not on TV but in theaters, during a live-screening of an Ohio State vs. USC college football game in a trio of markets last September. Of the more than 1,150 people surveyed, 90% said the game was "fun to watch," while other top descriptive terms were "cool," "enjoyable" and "something I want to do again."

3-D cable net
ESPN will launch the first 3-D cable network in June, ESPN 3D, committed to airing at least 85 live sporting events through summer 2011, beginning with the 2010 FIFA World Cup match featuring South Africa vs. Mexico and also including college football, the X Games and the Bowl Championship Series.

The network will not feature any in-game commercials at launch, similar to the 2006 launch of ESPN HD, but is in talks with advertisers around multiplatform sponsorship opportunities and expects to announce its first 3-D deal in the coming weeks.

ESPN 3D is also in talks with potential cable, satellite and telco distributors, none of whom have confirmed whether they will be carrying the network at launch. ESPN 3D will also not be a continuous network, going dark in between live events.

"We've always known that ESPN fans are early adopters of technology, and in the vanguard of the consumption of new technologies we think our audience is perfectly lined up for 3-D," Sean Bratches, ESPN's exec VP-sales and marketing, told Ad Age. "As fans continue to seek out new ways to experience sports, this seems to be a natural extension for that."

Influx of 3-D TV sets
Discovery Communications, meanwhile, will launch the first round-the-clock 3-D network in early 2011 as part of a joint venture with Sony Corp. and IMAX. Discovery will create and distribute original 3-D content on TV, while Sony will assist in ad sales and sponsorship support, licensing and acquiring TV rights to 3-D feature films, as well as music and gaming content. Like ESPN 3D, the network does not have any distribution partners confirmed for its launch.

The hastily announced moves to 3-D programming reflects an anticipated influx of 3-D-enabled TVs coming to the U.S. in 2010 from companies like LG Electronics, Panasonic, Mitsubishi and Sony. LG alone has said it anticipates to produce and sell 40,000 3-D-enabled sets worldwide this year.

Broadcasting in 3-D is expected to require additional filming technology for broadcasting and set-top boxes to stream in the home, which is why ESPN's Mr. Bratches has more of a long-term outlook for 3-D's growth in home entertainment.

"In the next five to 10 years, we see 3-D television somewhere above DVR deployment and below HD set-top box deployment," he said.

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