Report: 3DTV Market is Ready for Takeoff

Table of Contents

  1. Summary
  2. Megatrends Surrounding 3DTV
    1. Large Trends
    2. Connecting the Dots
  3. 3DTV Technology
    1. Human Vision Depth Perception
    2. 3-D Displays: a Technology Taxonomy
    3. 3D-Capable HDTV Technology
  4. Market Dynamics and Ecosystem
    1. Market Ecosystem
    2. Market Dynamics
  5. Industry Economics and Business Models
  6. Competitive Analysis
  7. Recommendations
    1. Investors
    2. Incumbents
    3. Gatekeepers
    4. New Entrants


Among others, there are two key truths about technology. First, it often arises from expensive development projects designed for limited applications — such as medical or NASA programs —  and then slowly migrate to consumer use. This has been the case with many familiar markets, such as Global Positioning System (GPS) devices or the Internet itself. The second truth is that it takes a long time before a new technology comes to the consumer market. It is not unusual for three or four decades to elapse between an initial discovery and the time when the first products start commercial production.

After more than 50 years of toying with 3-D movies, Hollywood appears to have finally found a way to move beyond sensational special effects and bring the technology into the mainstream of movie production. The profound success of 3-D movies at the box office also has the studios searching for ways to capitalize on their development investments. The answer: move 3-D display technology into the home.

This follows a well-established history of technology migration from the local cinema to the living room. In the beginning, it was the moving picture itself that created demand for the original broadcast television that you could watch in the comfort of your own home. The theaters have advanced a series of new technologies to maintain an appeal over the in-home entertainment choices, but eventually consumer demand results in home versions. We have seen color, multichannel audio, wide screen, and high definition images debut at the cinema, only to have them eventually show up in the home.

So it only makes sense that 3-D will be the next frontier for cinema technology migrating to the home. We’re still in the Wild West stage, however, with many unanswered questions about just what form the technology will take, from how it is created and prepared by the movie studios (and other content creators), to how it will be delivered to the home, and finally how it will be displayed and viewed. Many different players are competing at different levels of the market. There will be some big winners, and there will probably be even more losers.

Some segments are heavily invested already in the success of 3-D TV in the home. Some have some proprietary technology that they hope will become keystones in the new market, such as those that can “synthesize” 3-D content from the enormous existing catalogs of 2-D content: both movies and television programming. Others hope to turn the advent of 3-D TV to a competitive advantage in an existing, crowded market. For example, 3-D TV could help plasma recover ground that has been lost to LCD technology in the flat screen HDTV business. And newer technologies such as Blu-ray discs hope that demand for 3-D TV content will help accelerate the initially sluggish adoption of these new devices.

It is most likely that other players, who may only have limited involvement in HDTV at this point, will emerge to show major gains. One important opportunity is delivery of 3-D content over the Internet. If traditional Internet distribution channels such as Netflix or newcomers such as Hulu can offer more programming on demand at a lower cost than other distribution methods such as Blu-ray or cable and satellite services, they could become the consumer choice for 3-D content. Similar opportunities exist in markets that are not directly related to HDTV, such as still photo and digital video cameras and playback devices, which could offer consumers affordable ways to create their own 3-D content.

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