Of the four major suppliers of add-on 3-D technology for digital cinema, three of them are reported on in this section. Dolby, the fourth, appears in the Servers section.
3-D tickets are sold with a premium added, typically in the $2-$3 range. The premium is split between exhibitor and distributor in the same manner as a normal ticket.
MasterImage is a supplier of 3-D add-on image polarizer, and low-cost, passive polarized glasses. As with RealD, the polarization method requires use of a silver screen. MasterImage has its roots as a Korean company, but was recently acquired by Symphony 3D Holdings in the US, and capitalized with $15M.
The company has slowly built a footprint in the US and Europe, but under new ownership, its sales effort is expected to get more aggressive. Unlike RealD, its technology is purchased by the exhibitor, either through a financing arrangement with per-ticket payments, or outright. Also unlike RealD, the polarization filters used are purely optical, switched in front of the projectors lens via a mechanical rotating wheel. The rotating filter assembly can be rolled to another projection system nearby, bring a degree of flexibility to a purchased asset. The mechanical rotation of filters also eliminates the need for the ghost reduction required by RealD.
Successive generations of the product have led to substantial improvements in both operation and safety. Efforts have been made to allow use of the same glasses as used by RealD.
MasterImage’s past weakness has been its sparse marketing and sales effort. Under new ownership, changes have already begun. Notably, sales expert Hannah Cash jumped ship with Qube to join MasterImage following the sale.
Users of MasterImage’s technology praise the quality of the product. While the company still has a significant hill to climb to grow sales, RealD may finally have a serious competitor.
RealD provides 3-D add-on technology for digital cinema projectors, and low-cost polarized glasses for viewing. It is a privately held startup, funded by venture capital. Shamrock and other capital sources provide the company with its funding.
The company’s primary product in the cinema space is an LCD-panel, called a Z-ScreenTM, that polarizes the light passing through it. When electrically stimulated, the panel changes polarity, such that a sequential display of left and right images can be uniquely polarized. Similarly polarized glasses direct left polarized images to the left eye, and right polarized images to the right eye. Polarized images must be displayed on high gain silver screens.
To compensate for optical crosstalk between left and right images, RealD has IP in a process called “ghostbusting,” where content is processed to eliminate ghosting, or the double images, caused by crosstalk. To date, RealD EQ, the name applied to its ghostbusting process, is performed pre-distribution, creating dual inventory content. (No other 3-D process requires ghostbusting.) To eliminate the dual inventory problem, server companies are now installing RealD EQ in their products to enable ghost busting in the theatre, post distribution. Some countries in Europe have been completely converted. To eliminate ghost busted distributions in the US, however, will require a significant hardware update by Doremi. (See the discussion of Doremi in the Servers section.)
RealD has established itself as the most popular provider of 3-D add-on technology. It has a substantial R&D effort behind it. It’s EX system is unique in its ability to provide the light necessary to support large screens. But its business model is challenging to exhibitors. The company does not sell its technology, but instead licenses it. Licensing arrangements vary, from a flat annual fee, to a fee per ticket, to arrangements that combine both flat and per-ticket fees. The fact that the exhibitor never owns the technology, however, has opened the door for competitor MasterImage.
Up until this year, distributors paid for RealD glasses, stemming from a deal originally cut with Disney. However, Fox challenged the need to pay for glasses when releasing Ice Age mid-year. With the high frequency of 3-D releases, the problem of managing on site inventory and payment for glasses, and with competing technologies entering the market, it is unlikely that distributors will continue to pay for glasses. The challenge for RealD is that acceptance of its model will be seriously impacted if the exhibitor has to pay for both license and glasses.
RealD successfully entered into an arrangement with Sony Electronics supplying filters for Sony’s 3-D projection system. However, Sony’s 3-D projection technology does not require electronically switched polarizing filters, and presumably would do just as well with fan-cooled static filters provided by MasterImage or others. There has been no announcement to this effect, but one would expect that Sony has a time limit on the relationship, and will be ready to go with a different solution in a year or so.
XpanD is a Slovenian company, providing 3-D shutter glasses to cinemas. Its glasses technology was acquired from Beaverton-based McNaughton Inc., also known as Nuvision. XpanD is owned by Sergej Racman, vice chairman of KD Group, a Slovenia-based holding company. Maria Costeira is CEO.
Shutter glasses deserve explanation. The technology takes advantage of the sequential nature of DLP 3-D projection. The glasses are battery-powered, employing LCD lenses that open one eye at a time, allowing the left eye to see only left images as they are sequentially displayed, and the right eye to see only right images. They are triggered wirelessly by an infrared transmitter. Note that Sony’s does not project 3-D sequentially, so XpanD’s glasses are not meant to work with Sony projectors.
As with Dolby 3-D, XpanD’s challenge has been its high cost of glasses, and the need to check that the battery-powered glasses work before each showing. Unlike Dolby’s method, XpanD’s system does not require modification of the projector and can theoretically be moved from screen-to-screen. However, XpanD currently prohibits such movement. The cost of XpanD’s glasses will look much better to exhibitors if they find themselves having to pay for RealD glasses. Notably, in Europe, Volfoni is now renting XpanD glasses to theatres.
Bob Pinkston, Dolby’s former head of sales, left XpanD. Bernard Collard, former General Manager for XDC, joined XpanD to lead its European sales effort.