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Business

3-D television makers grapple with slow sales

3-D TV was one of the buzzwords at last year's CeBIT tech fair, but consumers have been reluctant to invest in the new appliances. Manufacturers hope improved technology and a wider range of 3-D content will boost sales.

Two men watch a 3-D television

Viewers need special glasses to watch 3-D television

Television is increasingly competing against other forms of home entertainment. The industry's most promising weapon: 3-D television. Despite modest sales of 3-D gadgets in 2010, electronics companies and the film industry alike still have high hopes for the new technology.

Equipment sales are rising, albeit slowly; content can be delivered through new pay-television channels; advertisers have a whole new playing field available; and 3-D content may even be more resistant against piracy.

Moviegoers wearing 3-D glasses

Cinema buffs can now watch 3-D features without leaving the living room

All parties involved have a strong interest in bringing 3-D television sets into every home as soon as possible, though it looks like that will take some time. From their rollout in April 2010 until the end of that year, some 200,000 3-D television sets were sold in Germany.

The German Association for Consumer Research (GfK) predicts that sales will rise by 500 percent to one million sets in 2011. It expects the national market to approach 10 million television sets in the long term.

Sales figures give researchers at GfK a reference point for how consumers are using their new 3-D sets. Only 200,000 pairs of the special glasses needed to watch films in 3-D were sold along with the 200,000 television sets. Considering that families would buy several pairs of glasses per television, a large number of owners apparently still do not make use of the 3-D capability in their living rooms.

Sales trail expectations

The entertainment industry has made sporadic attempts at popularizing 3-D films since the 1950s, but the big breakthrough only came in 2009, when the James Cameron film ‘Avatar' hit cinemas. Since then, little of the content made available in 3-D has been anywhere near as successful as 'Avatar'.

In order to boost television sales, Japanese electronics producer Panasonic is looking to strike deals with European broadcasters to put more 3-D content on the small screen. Without more content, Panasonic says, meeting its global goal of one million sets sold by March will be "difficult".

A scene from 'Avatar'

The 2009 film 'Avatar' was the first 3-D blockbuster

Other equipment makers have been similarly disappointed in their sales figures. Sony is seeing sales of 3-D sets trail expectations, said Chief Financial Officer Masaru Kato in October.

Toshiba's latest range of 3-D televisions, which don't require viewers to wear a special set of glasses, failed to achieve even half its sales target during its first month on the market. This may be due to the fact that the glassless viewing experience still does not meet expectations.

Jürgen Boyny, Director of Consumer Research at GfK, predicts that this technology will take some time to mature: "I don't expect that we'll see 3-D sets without glasses become the norm until 2015."

Quick profits remain unlikely

Market research shows that consumers tend to replace their television sets every six years. With high definition television (HDTV) out only a few years ago and improved glassless 3-D viewing just around the corner, consumers may not be willing to invest in the current state of technology.

The latest models come at a steep price. 3-D content is best viewed on large screens costing between 1,000 and 2,000 euros, with the price of 3-D glasses adding another 50 to 100 euros apiece.

A pair of 3-D glasses

New models of 3-D glasses will be shown at the CeBIT fair in March

The greatest beneficiaries of the 3-D effect are video games, animated features and sports. Those appeal mostly to a younger audience that does not necessarily have the buying power to drive up sales. Despite electronics manufacturers' aspirations, mass market adoption may thus be slow to come.

"Quick profits are wishful thinking," market research firm Prognos said in a study. The growth rate of 3-D equipment sales between 2010 and 2014 will be much slower than that of HDTV between 2002 and 2006, Prognos predicts.

The problem of content scarcity is expected to diminish in 2011. At least 40 3-D films are already planned for this year. By 2015, 15 percent of all movies will be produced in 3-D format, professional services firm PricewaterhouseCoopers predicts. Once moviemakers harness the 3-D effect for better storytelling, allowing it to become more than a mere gimmick, consumers will be more willing to pay a premium for 3-D televisions.

Author: Annika Reinert
Editor: Sam Edmonds

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