Fox chose ShoWest to announce that it would not pay for Real D glasses with the release of Ice Age in June. This has caused tremendous backlash from exhibitors, particularly Regal. The implicit agreement for using Real D was that exhibitors pay for the Real D license, and studios pay for the Real D glasses. Fox’s decision puts a hole in that understanding.
Despite the backlash, it’s unlikely that Fox can change its mind. Glasses are said to have a three month lead time, and the deadline for ordering has passed.
While the press will portray this as a battle between exhibitors and Fox, the real battle is with Real D. The sale of glasses is a profit center for Real D, as evidenced by those who have attempted to substitute with similar glasses from less expensive sources. Real D’s licensing agreements require that Real D-approved glasses be used, and Real D does not approve glasses that are not sold by them.
In the Real D arrangement, studios don’t have the clout to change Real D’s business practice, as the studios aren’t the licensee. But as the parties that pay Real D’s licensing fees, exhibitors do have clout. Real D has now signed 1500 screen supply agreements with each of AMC, Cinemark, and Regal. If exhibitors have to buy the glasses themselves, we should expect them to find a better deal. Now that the deadline for ordering has passed, this should present an opportunity for new suppliers to enter the market.
