Of the four major suppliers of add-on 3-D technology for digital cinema, only three of them are reported in this section. Dolby, the fourth, appears in the Servers section. Panavision and Technicolor are reported, but note that neither is active in the digital cinema space at this time.
3-D tickets are sold with a premium added, typically in the $3-$5 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 acquired in 2009 by Symphony 3D Holdings in the US, and capitalized with $15M.
Under new ownership, the company is building a strong presence in the US and Europe. 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. Efforts have been made to allow use of the same glasses as used by RealD. Users of MasterImage’s technology praise the quality of the product.
While it has no product as yet on the market, Panavision presented its version of 3-D add-on technology at Cinema Expo. It employs a spectral method, similar to that of Dolby. Like Dolby, it requires a filter wheel inside a DLP projector, and filters for Sony projectors. Like Dolby, it requires glasses that must be washed, but along with that comes the benefit of a non-silver screen. Like Dolby, its method isn’t very efficient. Panavision first got into this project when partnered with Deluxe, exploring a method that could work for film as well as digital. At the time, it was envisioned that the method would be more efficient and would lead to lower cost glasses. Sadly, these factors haven’t yet materialized.
RealD provides 3-D add-on technology for digital cinema projectors, and low-cost polarized glasses for viewing. At present, it is a privately held startup, funded by venture capital. Shamrock and other capital sources provide the company with its funding.
RealD will go public in the coming months. The company is planning its IPO with 10.8 million shares to be priced between $13 and $15 per share, for a market cap between $140M and $162M. The company said it expects net proceeds of about $75 million and plans to use $25.1 million to repay debt, with the rest for general corporate purposes.
The company’s primary product is its polarized 3-D glasses, which it sells for around $.65 a pair. In the US, RealD glasses are sold to the distributor, while in other territories the exhibitor pays. On the projector side, RealD makes an LCD-panel called a Z-ScreenTM, that polarizes 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, the RealD polarized glasses direct left polarized images to the left eye, and right polarized images to the right eye. The polarized images must be displayed on high gain silver screens. While the Z-Screen is designed for DLP projectors, RealD is the only 3-D add-on company whose product also works with Sony projectors.
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 largely 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.) It’s EX system is unique in its ability to provide the light necessary to support large screens.
RealD has established a significant footprint for its technology. In the US, it largely did so by giving AMC, Cinemark, and Regal warrants for its stock. Licensing arrangements vary, from a flat annual fee, to a fee per ticket, to arrangements that combine both flat and per-ticket fees. Some exhibitors prefer to own their system, which steers them to the other add-on technologies.
Technicolor offers an over-under lens for 35mm film for the purpose of projecting polarized 3-D images. It has over 150 sites installed in North America with the technology. Being a polarized technology, it requires a silver screen, but low cost glasses. But the degree to which this film format is supported is questionable. Of the larger studios, only Paramount/Dreamworks, Universal, and Warner support it. It’s unlikely that Disney and Fox will ever support it as it undermines the purpose of their digital deployment programs.
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.