With 3-D entertainment becoming more popular, as evidenced by the box-office success of the 3-D film “Avatar”, television programmers and manufacturers are aggressively gearing up to promote a new technology: 3-D television. ESPN, a unit of Disney (DIS), has announced plans to launch, in June, a new network, called ESPN 3D, which will air at least 85 live sporting events in its first year. The first 3-D event will be the World Cup soccer match between South Africa and Mexico. ESPN believes that demand for more realistic sports programming will be one of the main drivers behind 3-D television.
Discovery Communications (DISCA), owner of the Discovery Channel, is also planning to start a 3-D TV network. The Discovery network will show natural history, space, science, and technology programming, as well as movies. To help develop the new network, Discovery is partnering with Sony (SNE) and the Imax Corporation (IMAX). Discovery will provide the content, Sony Pictures will advertise and license 3-D films, and IMAX will license the technology.
To view the 3-D channels, consumers will have to buy a special 3D - HDTV set, the cost of which will start at about $2,000. The 3-D televisions work by dividing picture images into two sets, one for each eye. A viewer must wear special glasses, so each eye captures a different image, creating the illusion of depth. Filming involves two connected cameras, one for the left-eye image and the other for the right eye. There are two technologies for 3-D glasses in the home: polarized and active. In polarized glasses, each lens blocks a set of images transmitted in certain types of light. Active glasses have battery-powered shutters that open and close rapidly, so each eye sees different views of each frame. The polarized version will cost about a dollar, while active glasses may cost up to $100.
The top TV manufacturers also are aggressively pushing 3-D technology, with the objective of creating another platform to boost future industry sales. Samsung Electronics, LG Electronics, Sony, and Panasonic (PC) represent more than 50% of the global television market. Panasonic is working with Twentieth Century Fox (a unit of News Corp. (NWS) and Disney to market and enhance the 3-D capabilities of its televisions and cameras. Meanwhile, Sony is placing a large bet on three-dimensional viewing by funding new product development in several of its units, including TV production, movie studios, and video games.
The timing and magnitude of the prospective transition to 3-D television in the home will depend on two critical variables: the availability of cheaper 3-D sets for middle-class homes and the supply of 3-D programming. Although the transition should start this year, a significant change-over could take years.