CES ignited the 3D buzz back in February referencing the success of Avatar as the poster brand for assessing consumer demand for all things 3D. Using 3D box office sales to gauge consumer interest, CES pointed to Hollywood which was churning out 3D flicks left and right. Rallying towards a potential revenue stream too big to ignore, electronic manufacturers, content providers, gaming producers, and movie studios began to push the 3D concept to the retail consumer in the way of 3D TV.
From the consumer perspective, there are certainly some significant barriers to 3D TV: the high cost of entry, dearth of content, and inconvenience of glasses. Despite this, studies suggest that there will be anywhere from 30 to 40 million 3D sets in the market within the next few years. What will fuel that growth are more reasonable prices, significant increase in available 3D content, and technology that will rid viewers of those pesky glasses.
Marketers are looking at the same obstacles to 3D TV; the high price, content shortage, and questionable scale of audience. However, there are some advertisers that have made it past these barriers and are currently experimenting with 3D TV channels. For example, this year P&G/Gillette, Sony, and Disney/Pixar ran 3D units in ESPN’s 3D launch of the World Cup. While there was a great deal of hype prior to these 3D commercials actually airing, there has been little subsequent talk regarding any insights we can garner. For now, the advertising community is left to speculate on the potential advantages 3D TV could bring to marketers and the resulting costs of those benefits.
Marketers should be intrigued by what 3D could offer in terms of creativity; adding a third dimension breaks down creative boundaries and offers a new frontier in which marketers can conjure fresh and truly new, innovative ideas. 3D presents a particularly appealing opportunity for products that have fascinating features, or are more captivating in reality than in pictures. Consumers could see your product in their own living room, which would (ideally) enhance the product’s allure. Perhaps the most earth shattering possibility of 3D marketing is that viewers may actually watch and – gasp – enjoy commercials. Adding a 3D element to the TV spot would presumably peak the viewer’s interest, significantly increasing engagement with your brand.
One obvious stumbling block for marketers is the cost-prohibitive nature of new technology. 3D is expensive to produce at 30 to 40% more than the average commercial, and marketers would have to produce and traffic in three different versions of each creative vehicle (SD, HD and now 3D). It is a particularly high cost considering there are less than 2 million 3D sets currently in the marketplace. Another potential impediment to marketers is the lack of 3D content. Not only are there just a handful of 3D TV networks currently operating, but most people agree that viewers are only interested in watching sports, live events, and action movies in 3D (i.e. not Desperate Housewives or GMA), which confines the number and quality of viewers a marketer can reach and limits branding opportunities. If a particular marketer does not purchase sports in 2D, it does not make sense to start buying them in 3D.
Regardless as to which side of the fence you are on – either pro 3D or somewhat skeptical – we are indeed in the early stage of 3D technology existing in the consumer’s living room. The skeptics look to Hollywood just as CES did, but are noticing that Hollywood is cooling on 3D. Since the release of Avatar, revenue for 3D movies has plummeted; the release of a 3D Twilight movie has been shelved, and the 3D version of Toy Story 3 pulled in less revenue than the 2D version. However, while many doubt the medium’s power of longevity, it is in the best interest of the electronic industry, retailers, movie studios, video game creators and MSOs to make sure that 3D TV penetration grows. Therefore, it is important that marketers recognize and begin to address the future implications of 3D.
The reality is that 3D TV will be more germane to gaming, sports and the occasional special event or movie; for the day to day consumption of TV, 3D will probably play less of a role. So what does that mean for marketers? Will advertisers have to immediately begin producing SD, HD and 3D versions of their spots to in order to satisfy all channels? If 3D makes sense for the brand, then perhaps. For most marketers, however, it’s a wait and see scenario.
If you buy into the Consumer Electronic Association, 3D TVs could reach 40 million homes by 2014. However, some electronic companies are already reducing their projections for 2010, so where those figures ultimately land is anyone’s guess at this point. Whether an advertiser has the production budget to capitalize on reaching the 3D early adoptors depends on the scale at that time and the potential ROI for reaching them with 3D messages. The good news is there could be some exciting times ahead should consumers ultimately buy into this new technology. The better news is no one needs to up their production budgets for 2011 just yet. We just need to keep an eye on the continuing evolution of the technology and assess whether consumers will embrace it or be content with HD.