What do Alice in Wonderland, Avatar, Despicable Me, Shrek Forever After, and Toy Story 3 all have in common? They’re all 3D films—and this third-dimension has been receiving quite the buzz lately. With so much hype surrounding 3D, the question everybody wants answered is if it’s here to stay or soon to go?

Most people I talk to are shocked when the find out 3D isn’t a new technology. In fact, the first 3D films were introduced in the 1950’s. However, due to the complexity and high costs of the hardware and production to produce the content, 3D viewing was only made available to a very niche market. Then we saw a rebirth of 3D in the 1980’s and 90’s thanks in large part to high-performance venues from IMAX. In the 2000’s we’ve experienced yet another huge surge of 3D film popularity, sparked by the unprecedented success of James’ Cameron's Avatar in Jan. 2010. Since then, dozens of 3D films have been announced, such as Alice in Wonderland, Up, Toy Story 3, Shrek Forever, Harry Potter and the Deathly Hallows: Part 1, Pirates of the Caribbean: on Stranger Tides, Saw 3D, and many more. These are all major box-office films and the fact they’re all being offered up in 3D is quite impressive. It’s clear that Hollywood is on board with 3D, but what about consumers? Are we ready for 3D or is this just another ploy for Hollywood to increase revenues as they struggle to differentiate themselves from the home movie experience?

Looking back through the history of television, color TV was the first major technical advancement since the original introduction of TV. Black and white screens quickly became obsolete. I think that high-definition was the biggest improvement since color and I believe 3D is now the biggest improvement since high-definition. Sure, there are higher resolution formats still on the horizon but most people are happy with the high-definition quality available today. Consumers want a big, impactful improvement that will draw them into the experience and capture the emotion of the film like never before. I believe that’s exactly what 3D is doing for us right now. Don’t just take my word for it. The Consumer Electronics Association (News - Alert) (CEA) said shipments of 3D TVs will double the organization's January projections to 2.1 million in 2010. By 2011, the CEA predicts, more than six million 3D TVs will be sold in the U.S., generating more than $7 billion in revenue.

That’s a lot of 3D folks! Rawr!

Consumers are embracing 3D, according to IMS Research, who estimates that over 218 million 3D TV sets will ship cumulatively from 2010 to 2015. The biggest difference between today and the 1950’s through 90’s is the cost and quality of 3D production. When I’m consulting my clients on a new TV purchase, I tell them for 50-inches and above, go 3D. The premium for 3D over a 2D display when comparing a popular 55” LED model from any leading manufacture is typically around $200-$300, and that higher price usually includes other features and enhancements as well. This small premium is the driving force behind the rapid growth of 3D displays which will continue to fuel quality 3D content creation – another key essential to 3D market success. 

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However, there are additional costs which could create barriers to mass market consumer adoption of 3D for home entertainment. One issue is the required 3D glasses needed to watch 3D content. At approximately a $150 a pair today, 3D glasses represent a significant investment for a family, or anyone who wants to enjoy their new 3D set with a group of friends. Manufactures are clearly going to have to work really hard to bring cost of these essentials. Early adopters will also need to buy a new 3D Blu-ray player for about another $400 and then finally the 3D Blu-ray discs themselves which cost an average of $35 each. 

For now, this is quite costly for the average consumer. But like any emerging electronic technology, the prices will continue to drop. Anna Hunt, report author and principal analyst at IMS Research, said in a statement, “Within five years, the majority of high-end large-screen TV sets and Blu-ray Disc players are likely to offer 3D capability. The price premium of 3D models in these markets over similar 2D products is expected to diminish quickly. Without a significant price premium, consumers are likely to future proof their purchases by opting for devices with 3D.”  

The company forecasts that by the end of 2015, over 241 million homes will have a 3D Blu-ray Disc player and over 280 million TV households will have an HD set-top box. The report concludes,  “With such a large installed base of 3D-capable devices, content makers should see enough of an incentive to aggressively pursue 3D content creation.” Numerous pay-TV operators are offering or planning to offer 3D content to HDTV subscribers at no additional cost over the existing HDTV package pricing.  Initially, this may be a common practice until more 3D content is available. The growing consumer interest is also confirmed by research firm In-Stat (News - Alert). By 2013, one in five new TVs sold in the US will be 3D, according to the company.

Evidence suggests rapid growth of 3D TV purchases through 2015 and beyond, with the barrier to entry decreasing on a regular basis the analysts’ predictions mentioned above will likely continue to grow.

Quality 3D content creation is going to be one of the most important factors in the success of 3D technology. Without it the technology simply won’t survive. If movie-goers don’t like what they see in the theaters, they’re not going to purchase it for their home. “3DTV promises to be the next significant innovation wave for living room entertainment,” said Stephanie Ethier, In-Stat analyst. As founder and technology expert of a leading home automation company, I couldn’t agree more.