Sony to Stop Paying for 3D Glasses in May 2012 (Exclusive)
UPDATED: Exhibitors aren't likely to react well to Sony letter saying the studio will stop footing the bill for RealD glasses, which can cost studios $5 million to $10 million per blockbuster release.
Sony Pictures Entertainment has notified theater owners in a letter that it will no longer pay for 3D glasses as of May 1, 2012, marking a major policy shift that many other studios are likely considering.
"This is an issue that has to be resolved between us and our exhibition partners. We are trying to give them a very lengthy lead time in regards to the change in policy," Sony worldwide president of distribution Rory Bruer said.
But the notificiation probably won't go over well with theater owners, since many feel like they’ve already coughed up enough money in converting their screens to 3D, and that they shouldn’t have to incur the cost of supplying glasses too, according to one source in the exhibition community.
The price tag for 3D glasses is no laughing matter — studios can spend $5 million to $10 million worldwide for a tentpole, but most of the cost is incurred in the North American marketplace (studios pay after the fact, based on how many glasses were actually used). Sony has two high-profile 3D tentpoles headed to theaters next summer — Men in Black III and The Amazing Spider-Man.
Glasses for smaller films can cost $1.5 million to $2 million. Translated, 3D glasses account for about 50 cents of a theater ticket.
Sony, along with other studios, is in favor of moving toward an ownership model, requiring moviegoers to buy their 3D glasses at the theater (the studios argue that it could be a new revenue stream for exhibitors).
Such a system is already in place in a number of foreign territories, including the U.K., Australia, Italy and Spain. However, American consumers are now used to getting the glasses for free when they pay a 3D surcharge (usually 3 or 4 dollars), and the habit could be hard to break.
The majority of 3D glasses are provided through RealD, which controls the majority of the 3D market domestically through its 3D projection systems. Other 3D systems such as the one offered by Dolby employ a model where the theater owns the glasses, which are returned, cleaned and reused following a screening.
In the U.S., RealD theaters often have recyling containers for the glasses outside the auitorium, but moviegoers may also keep them, meaning new glasses are still needed on a mass basis.
Several years ago, when digital 3D was first emerging, it was unclear who would pay for the glasses. In an effort to encourage movie theaters to convert their screens to the emerging format, Disney told theaters it would cover the cost.
Soon, other studios started following suit, but top executives say it was never their intention to make it an indefinite policy. And at least one studio, Fox, tried to stop paying for the 3D glasses, but was met with stiff resistance from exhibitors.
Carolyn Giardina contributed to this report.