Hollywood thinks in 3-D; theaters slow to catch on

LOS ANGELES -- Movies in 3-D are becoming such big moneymakers that Hollywood studios are cramming them into the nation's theaters, even though there aren't enough screens available to give each film its fullest possible run.

That will mean an unprecedented number of 3-D movies for film fans to choose from this spring, and smaller profits for Hollywood studios than they might otherwise get with fewer 3-D competitors.

The pileup was created in part because studios want to capture some of the excitement surrounding Avatar, the James Cameron epic released in December. At $2.4 billion in global ticket sales, it is the highest-grossing film ever. In addition to the novelty or richer experience that might drive more people to see a 3-D movie, tickets to 3-D movies cost a few dollars more.

Around the time Avatar came out, Warner Bros. decided to convert a remake of Clash of the Titans from 2-D to 3-D and push its release back a week, to April 2.

That will be the third 3-D movie to hit the market in a short span. DreamWorks Animation SKG's How to Train Your Dragon comes out a week earlier, and The Walt Disney Co.'s Alice in Wonderland hits theaters March 5. And Avatar might still be playing in some places as well.

But a limited number of theaters can show these movies in 3-D, because not all theater owners have bought new digital projectors and undertaken other upgrades necessary to show movies in the format. Converting each theater screen costs about $70,000.

About 3,900 to 4,000 3-D-ready screens are expected to be available in the U.S. and Canada by the end of March. Typically a movie in wide release might be shown on 3,000 to 10,000 screens in North America.

Screen scarcity

In the past, a smaller number of 3-D-capable screens was adequate when one major film at a time was being released in 3-D in addition to 2-D. Each movie had a longer run, and moviegoers who wanted to see it in 3-D could pick a convenient time to go.

"One or all three are going to suffer in some way," said Patrick Corcoran, director of media and research for the National Association of Theatre Owners. "It makes it a much harder decision on exhibitors on what to keep or what to drop or what to add and probably should have been avoided."

Because of the lack of enough 3-D theaters, all three studios will also release 2-D versions, as they have in the past.

Dan Fellman, head of distribution for Warner Bros., said that even with the competition, his studio will still meet its revenue targets for the 3-D version of Clash of the Titans. If not for the 3-D logjam, it might get even more.

"Maybe everyone won't have exactly the amount of screens they had wished for," Fellman said. "But it'll certainly be enough to cover all of the major markets."

Hollywood can also take solace in the fact that this spring's 3-D screen count in North America is on pace to be twice what it was a year ago. That means that Clash of the Titans will have 50 percent more 3-D screens available to it than the 800 used for Journey to the Center of the Earth two years ago.

DreamWorks declined to comment on the situation. However, its 3-D Monsters vs. Aliens took in $198 million in North American theaters last year on half as many 3-D screens as How to Train Your Dragon will have this spring. Even if the 3-D screen count for Dragon drops 50 percent on its second weekend, it'll be back to where Monsters began, with about 2,000 3-D screens.

Scheduling crunch

Not long ago, 3-D competition was small. Journey to the Center of the Earth had a free run of 3-D screens for several months after its summer 2008 release. As more 3-D movies came out the next year, one movie would largely wind down when another came out.

For example, when Monsters vs. Aliens came out in March, the number of screens devoted to Coraline, a 3-D movie released the previous month, dropped 75 percent.

Chuck Viane, Disney's president of distribution, said that despite a "temporary shortfall of 3-D screens," moviegoers are still primed for the experience.

Nineteen 3-D movies are scheduled for release this year, including Disney's Toy Story 3 and DreamWorks' Shrek Forever After and Megamind.

The next time such a scheduling crunch will occur is Dec. 17, when Tron Legacy and Yogi Bear will appear in 3-D. The number of 3-D screens in North America should reach around 5,000 by then, alleviating some of the problem.

Amy Miles, CEO of the Regal Entertainment Group theater chain , told investors last week that many of the company's large multiplexes have two or three 3-D screens, meaning competing 3-D films will just have to play side by side. After starting the year with 427 3-D screens, the chain will have about 525 by the end of March and more than 1,000 by the end of the year, as a large round of financing is expected to come through.