Disney's "Alice in Wonderland" has made the majority of its profits off 3D ticket sales, but did the technology justify the higher ticket price?

There is a big debate going on about the influx of 3D movies that has been going on the past few years, and continues going on strong. Some claim that the technology has already reduced itself to a gimmick, while others believe wholeheartedly that it is the future of cinema. Who is right? Can anyone be wrong? In order to come to any kind of conclusion, we first have to look at the facts.

Much of this topic comes down to economics. An article in Variety by Pamela McClintock examines this angle in-depth, and answers a lot of questions regarding why the film industry is so keen on this latest and greatest technology. To put it simply, there is a lot of money in it. The unfathomable success of James Cameron’s Avatar has driven a number of studios into a frenzy, spurring them to make some 2D movies into 3D in order to cash in on the popularity. The upcoming Clash of the Titans (April 2^nd) is one such film that was made into 3D at the 11^th hour. For some, these half-baked conversions are one of the major points of contention. The claim is that such last-minute conversions are adding to the thinking that 3D technology is nothing more than a money-grabbing gimmick. This may be true, but consider this: producing a film in 3D from the get-go adds $20 million to its budget almost automatically, while converting a film into 3D during post-production only adds $10 million to the budget (some studios even claim $5 million). The issue over post-production conversions, then, may not entirely be an issue about getting more money from audiences, but also about saving money. So, it is not completely about the first goal of business (making profit) but also the third (reducing cost). But what about the second goal (increasing revenue)?

In terms of economics, perhaps the biggest issue is ticket prices. A typical $9 adult evening ticket can jump to $14 or $15 for 3D depending on which theater you go to or which region you reside (a New York City AMC theater will obviously demand more than a Harford County, Maryland Flagship Cinemas). Why the steep upswing in prices? For starters, studios must pay to distribute the 3D glasses to all theaters that buy their prints (which cost even more than regular digital prints), which cost anywhere between $5 million and $7 million domestically. But this alone does not justify such a high price increase. What has added to it is the fact that exhibitioners (theaters) want to get in on the 3D profits as well, and who is to argue? For any given film on its opening weekend a theater can expect to get as little as 10% of the ticket sales. For a $9 ticket that means only 90 cents goes to the theater. For the same movie to release in 3D the ticket price increases automatically due to the theater having to pay more for the print itself (an extra $1000 on average, reportedly), which might bump up the price to about $10.50 or $11. So how do we go from $11 to $14 or $15? In order for theater owners to make a profit off of showing 3D movies they must make more from ticket sales than just enough to cover the extra cost of the prints. How much higher the price goes could indicate how much extra profit that theater is looking to make. Suddenly, a 90 cent profit from a $9 ticket turns into a $1.50 profit for a $15 ticket. If the movie is a success, like Avatar, Alice in Wonderland, or the recent How to Train Your Dragon, then it behooves both studios and exhibitioners to push 3D, and hard.

The fallback about higher ticket prices is that they are beginning to conflict with the industry’s long-standing declaration that movies are the cheapest form of entertainment (comparing itself to sporting events, live theater, and theme parks). For the longest time this was largely true. However with more and more 3D movies coming out, many of them animated, families are finding it harder on the wallet to treat themselves. If the average 3D ticket price for an adult is $13, and a child’s is $11.50, that means that a family of four can expect to pay in the range of $49 for tickets alone (2 adults, 2 kids), just to see one movie. Add in popcorn, drinks, etc., and a night out at the movie theater can cost upwards of $70. A total like that begins to compare with some sporting events like baseball games. Four $20 tickets for moderately good seats will be $80, and many parks allow you to bring your own food and drink.

In her article, McClintock advises that the film industry be careful about pushing 3D too hard. The reason for this is that all new cinematic innovations eventually lose their novelty factor (talkies, color, CGI, to name a few). 1922′s The Jazz Singer, with its integration of sound, made huge strides towards creating what would eventually build up to big Hollywood musicals. The Wizard of Oz helped propel the shift from black and white to full-time color, and Pixar’s Toy Story paved the way for an entire new branch of the animation genre. What eventually became the case for the first two breakthroughs is that they became normal and customary, and the advent of computer animated movies quickly became commonplace due to the subgenre’s quick dilution over the subsequent 10 years. Will the same happen to 3D? One postulation is that though the technology is still drawing audiences based largely on novelty alone, eventually those same audiences are going to pick their jaws up off the floor and demand an overall high-quality product. What people can’t agree on is whether that eventuality has arrived yet.

What are your thoughts on 3D? Do you love it? Are you sick of it? Tell us what you think and let your voice be heard!

Quick Opinion: Concerning movies that were converted into 3D during post-production, I believe we can all agree that the quality of the technology does not match up to films that go through the trouble of actually filming in 3D. I dare anyone to say after seeing Clash of the Titans in 3D that its quality of 3D is better than or just as good as Avatar. A small solution to the issue already presented itself when studios decided to release 2D editions of their films along with the 3D prints. As long as people continue to be given a choice between the two I don’t see much of an uproar happening. However, if studios and exhibitioners decide to push 3D to the point where choices start to become limited and audiences are forced to pay the extra money to see technology they don’t want, that is when serious problems can potentially arise. And what’s perhaps most unfair if that moment comes is that smaller theaters who can’t afford to use 2 screens to show both 2D and 3D editions of the same movie will be subject to possible money losses.