LAS VEGAS The consumer electronics industry is seeing its future through a pair of stereo 3-D glasses. The left eye sees an opportunity to revive sagging TV and media revenues, the right eye sees a set of unresolved technical issues.
That was the somewhat bipolar picture from this year's Consumer Electronics Show. Attendees crowded booths to watch adrenaline-pumping 3-D TV movies and sports while technologists packed panel sessions to sort through issues of incompatible formats and unfinished standards.
The business rationale is clear. TV unit shipments will rebound a modest six percent in 2010 after declining one percent in 2009, according to market watcher DisplaySearch (Austin). However revenues were down 10 percent due to a nine percent fall in global average selling prices, the first year of declining prices since the flat panel TV transition began, the company added.
Similarly, studios have watched sales of movies on optical disks drop as much as 13 percent in 2009. Revenue from sales of content online is growing but not newly fast enough to make up for the losses.
For two years studios led by DreamWorks Animation chief executive Jeffrey Katzenberg have been saying they want to bring their premium 3-D theatrical releases to the home as a way to bolster revenues. Somewhere on the road to CES 2010, the broadcasters and systems companies got on board.
Every major TV maker pledged at CES to ship 3-D TVs by June or earlier. They made 3-D TV demos the center of their huge show floor exhibits.
"Everyone is going at breakneck speed because we believe 3-D will rejuvenate the consumer electronics business," said Eisuke Tsuyuzaki, chief technology officer of Panasonic North America. "We saw this CES as a watershed, so the first generation products may have some issues," he added.
As the bandwagon grows, so does the vision.
3-D TV is "not a feature but a platform," said Tsuyuzaki. "It's not only about consumer electronics, but has applications in health care and engineering," he added
"There will be new kinds of experiences opened up here because how many of us can afford, for example, a sideline ticket to the Super Bowl," said Buzz Hays, former stereographer at Disney now part of Sony Pictures Imageworks.
Indeed, companies are already making plans for stereo 3-D consumer cameras and camcorders that will arrive "way earlier than five years from now," said Tsuyuzaki.
"The fact that YouTube can already support stereo 3-D makes it very interesting," said Nandhu Nandhakumar, senior vice president of advanced technology at LG Electronics. "The 3-D wave has snowballed, and I think the speed at which it happened has caught many people by surprise," he said.
An online survey of about 2,000 U.S. adults provided a cautionary note.
About a third said they saw a 3-D movie in the last year, 80 percent of those said they enjoyed it and a quarter of the total group said they would buy a 3-D TV within three years. However, they also said they would expect to pay $1,000 or less.
Although TV makers did not announce prices at CES, most 3-D TVs are expected to cost three times that or more. LG launched a 3-D TV in Korea in August for $3,000. Toshiba's Cell TV could sell for $10,000 in the U.S.
"They will be the Cadillacs of the display market," said Shawn DuBravac, director of research at the Consumer Electronics Association, co-author of the study. The smallest 3-D TV set he saw on the CES show floor was a 46-inch model, he added.
'A living, breathing science project'
Whatever the reception, 3-D TV is coming. As a first step in providing content the Blu-ray Disk Association finished a standard for high def 3-D disks in mid-December so disks can ship in tandem with the TVs. Katzenberg personally handed the first 3-D Blu-ray copy of "Monsters vs. Aliens" to the president of Samsung North America at one CES press conference.
Systems makers will ship a new generation of 3-D enabled Blu-ray drives in tandem with the new TVs this year. They will sport their own format and the latest 1.4 version of the HDMI interconnect built with the bandwidth and signaling capabilities to handle 3-D content in full high def.
Other content and broadcasting companies including British Sky Broadcasting, DirecTv, Discovery Channel and ESPN said they will turn on dedicated 3-D services in 2010.
"This is a living, breathing science project but we are comfortable going ahead," said Chuck Pagano, executive vice president of technology at ESPN, which plans to launch multiple stereo 3-D channels starting in June with its broadcast of the World Cup.
The broadcasters, however, bring along one of the many technical wrinkles ahead. They have yet to release details of what formats they will use, and they are expected to adopt differing approaches. That's setting up a last minute crunch all down the supply chain for the first wave of products.
All the broadcast signals are expected to be "frame compatible" with today's content coming into cable TV plants and set-top boxes. However each will require conversion.