Could Avatar Jumpstart the Home 3-D Market?

It’s easy to dismiss the market for 3-D entertainment. After a number of iterations, 3-D technology has yet to go mainstream, either in the movie theater or the home. And yet, a number of consumer electronics manufacturers and movie studios are betting big on the technology. Could Avatar be the catalyst that finally spurs user adoption?

Despite the 160 3-D films that have been made in the aughts, none have had the immediate impact that Avatar has had; in its first 11 days, the film has grossed more than $600 million in international box office receipts, and more than $200 million in the US. It is, for many, the first movie built entirely for the 3-D age, and a sign that content is finally catching up to what technology enables.

It’s also the first film to truly change the perception of what modern 3-D movie making and movie watching are about. Gone are the days of the flimsy paper 3-D glasses with the red and blue plastic in them — these days we have sharp black shades shaped like Ray-ban Wayfarers. Gone also are gimmicky, in-your-face 3-D effects thrown in just for the sake of having something jump out at you; While Avatar was clearly made for 3-D, its effects were more nuanced than one might expect (especially given how over-the-top James Cameron tends to be).

But beyond Avatar, though, there’s reason to believe that we’ll soon see even more blockbusters shot and shown in 3-D. When I saw the film, the theater I viewed it in showed three trailers for upcoming films in 3-D, including the latest addition to the Shrek franchise, Shrek Forever After, which is slated for release in May.

Having greater availability of 3-D content, including first-run movies, will make the case for adoption in the theater. But will that translate into the home?

Over at GigaOm Pro, Paul Sweeting argues that the expectation of 3-D in the home is probably more hype than hope at this point. Among other things, he argues that there isn’t enough content available, and that consumers aren’t likely to start buying 3DTVs anytime soon, considering a number of them just completed a major upgrade cycle of their home theater systems.

But 3-D content might be coming online more quickly than we once thought. For one thing, DirecTV is expected to announce the launch of a 3-D channel next month at CES, and other content distributors will probably soon follow. And while the number of films available in 3-D is still pretty low, that will surely increase in the coming years in the wake of Avatar‘s massive success.

As for the home entertainment upgrade cycle: It’s true that a number of people just bought their brand new HDTVs in the past two years, and that many spent good money to move to do so. It’s also true that there’s still a vast number of folks — about 50 percent — have yet to complete that upgrade cycle. Sweeting argues that these digital laggards aren’t likely to spring for 3DTVs, but I think that misses the point. The first generation of 3DTVs will be bought by the same early adopters that bought HDTVs before there was enough HDTV content to justify the purchase. And those that follow will be purchased as prices fall and as 3-D becomes a standard feature set, just as HD did.

But there’s another important aspect that separates an HD upgrade cycle to a 3-D upgrade cycle. As Alfred Poor argues in his GigaOm Pro report on the 3DTV transition (subscription required), unlike the transition from analog to HDTV, the difference between 2-D and 3-D picture is readily apparent. While a large number of consumers still view analog images on their HDTV sets and don’t know the difference, very few will make the same mistake when upgrading to 3-D.

That’s not to say that we can expect the home 3-D market to take off in 2010, or even in 2011. But with a blockbuster success story behind it and the support of consumer electronics manufacturers and the film industry, we can probably expect 3-D to take off sometime in the next five years.

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