With the digital 3-D release of Chicken Little, which was also the first release for RealD, Disney offered to reimburse the exhibitor for RealD’s polarized 3-D glasses. It was a deal that was not popular among Disney’s peer studios, but appeared to be even more cemented in place after Shamrock Holdings took a 20% stake in RealD in 2007. Shamrock was founded, and, at the time, chaired by the late Roy Disney, who was also a major shareholder of Disney and member of its Board of Directors. The reimbursement policy was limited to polarized glasses, which eventually included MasterImage, but continues to exclude Dolby, Xpand, and Panavision.
With the possible exception of Disney, no studio has ever shown glee for having to pay for glasses. After its first 3-D release, one studio relayed to your author its disappointment with the process. With so many 3-D movies a year, exhibitors maintain a running inventory of glasses, replenishing the supply as needed. For the studio questioning the payment policy, there was no way to know if it was paying for glasses used with its movie, or glasses headed for the storeroom in wait for the next 3-D release. More than one studio expressed dissatisfaction that they were stuck with a payment policy instituted by Disney.
For many US exhibitors, the subsidy for glasses made it practical to buy 3-D add-on equipment for their digital projectors. But outside of the US, a different model emerged. 3-D drove the conversion to digital projection around the world. Exhibitors outside the US paid out-of-pocket for digital projectors and 3-D add-on technology. These same exhibitors were not held back when the studios said they wouldn’t pay for glasses – they simply passed the cost on to the audience. It’s a model that the studios want introduced in the US.
One should expect that US exhibitors are not going to readily give up turf that they now possess. But some exhibitors haven’t helped their case, either. AMC, Cinemark, and Regal negotiated lucrative deals with RealD when each signed up for 1500 3-D add-on systems in 2008. Each of the three exhibitors were given pre-IPO warrants, and Regal and Cinemark, both public companies, reported healthy profits following RealD’s IPO in 2010. Profiting from the willingness of studios to pay for RealD’s glasses does not build empathy. Unfortunately, market factors haven’t been working to the advantage of US exhibitors, either. In 2010, 70% of 3-D box office came from outside the US, giving the studios a high degree of motivation to stand their ground.
In 2009, Fox said it would no longer pay for 3-D glasses. The announcement was awkwardly timed only a few months before its blockbuster release of Ice Age 3. US exhibitors fought back, and Fox caved. This month, Sony publicly stated that it would stop paying for polarized glasses, but with 8 months notice. That gives time to stage talks with exhibitors, but it also gives time for other studios to make similar moves. The odds are that the outcome won’t be as favorable to exhibitors as in 2009.