Katzenberg sees rosy 3-D view

DreamWorks Animation chief stumps for format at ShowEast

ORLANDO -- DreamWorks Animation chief Jeffrey Katzenberg was positively animated Tuesday in tub-thumping 3-D animation to ShowEast 2008's assembled exhibitors.

"If a picture is worth a thousand words, a 3-D picture is worth 3,000," grinned the energetic Katzenberg, whose personal and executive zeal for the technology has made him the industry's 3-D poster boy during the past couple of years.

But as head of the world's biggest pure animation studio, he said, the proselytizing is traceable to a need to make DWA stand out in a suddenly crowded marketplace.

"A couple of years ago, there was something of an onslaught of animated films," Katzenberg said. "Suddenly, our films were a little less special."

But if his 3-D fervor was borne of business necessity, the advent of 3-D filmmaking and exhibition also is "an opportunity for a game-changer for your business," he told exhibitors filling a large ballroom at the Orlando Marriott World Center.

Studios haven't been inclined to fund the rollout of 3-D hardware like they've helped fund basic digital projection, arguing that there is a clearer value-added component for theater chains installing 3-D systems. Also, the cost of digital installations -- required before an exhibitor can install 3-D equipment -- is much higher, at up to $100,000 per screen compared with 3-D system costs starting at less than $20,000.

Distributors are helping exhibitors install basic digital because they know studio savings are in the offing from the elimination of substantial print costs.

As for exhibitors, they still are waiting to see a truly big 3-D title and how consumers embrace such a release. Previous dabbling has included Disney's using some 3-D screens for its release of the animated feature "Chicken Little" and Warner Bros. going 3-D with the animated "The Polar Express" -- neither a real paradigm shifter but notable as early mover efforts.

But there already are some true believers in the exhibition community, including a theater executive sharing the stage with Katzenberg.

"It certainly delivers an audience and can invigorate the exhibition industry," said Chris Johnson, vp at suburban Chicago-based Classic Cinemas.

Classic, which operates 88 screens in 12 theaters, has three 3-D screens. With "Chicken Little," the chain enjoyed grosses more than one-third higher than would have been true without 3-D availability, Johnson said.

"Literally, with one picture, you will have paid for the cost of the installation of one screen," Katzenberg said.

Johnson, however, couldn't let the opportunity for some good-natured ribbing of his podium partner slip by.

"The unfortunate part is, you have to share some of that (extra) gross with the studio," he jibed.

Katzenberg said DWA is investing heavily in 3-D through higher production costs -- about $15 million per film. "We believe that incremental investment in our movies will be more than compensated in a number of ways," he said.

The studio topper added that he expects exhibitors will be able to charge upward of $1 per admission more for 3-D movies.

There are more than 4,000 movie-quality digital screens in the U.S. but fewer than 1,000 3-D screens. So when Paramount/Warner Bros.' animated "Beowulf" rolls out next month, even rival 3-D-avid distributors will be hoping the studio enjoys screen grosses impressive enough to spur further investment by theater owners in 3-D hardware.

Katzenberg is hoping to have 6,000 3-D-equipped screens by March 27, 2009, when DreamWorks releases "Monsters vs. Aliens." The DWA chief promised to bring a meaty clip from the movie to ShoWest in March to stoke exhibitors' appetite for what could prove to be a watershed animated release.

National Association of Theatre Owners CEO John Fithian also participated in the 3-D discussion, placing a special emphasis on studios' financial support for digital-cinema installations.

The majors have agreed to underwrite the rollout of thousands of d-cinema systems by paying third-party installers the equivalent of what distributors will save in print costs during the next few years. Such agreements have been dubbed virtual film print agreements, or VPFs.

"Let's remember that digital is the dog, and 3-D is the tail -- a very important, wagging tail," Fithian said.

Katzenberg replied that the metaphor might fairly be reversed and went on to predict that within just a few years two-thirds of all major movies will be released in 3-D -- about 40 or more 3-D titles per year.

"Let's get the digital-cinema platform there, so we're not doing hodgepodge 3-D installations," Fithian said.

Indeed, exhibitors in smaller markets are still waiting for help with digital startup costs.

Greg Razmus, who operates an eight-screen theater in Corbin, Ky., said the closest digital screens in his area are in distant Lexington, Ky., and Knoxville, Tenn.

"We're still struggling with digital," Razmus said. "I think the 3-D part of that is going to be great, but at this point it's still a dream."

Tuesday's other ShowEast activities included a screening of the upcoming literary adaptation "Atonement" from Focus Features and Working Title, and Picturehouse's romantic comedy "Run, Fat Boy, Run" and stand-up comedy documentary "Vince Vaughn's Wild West Comedy Show: 30 Days & 30 Nights -- Hollywood to the Heartland."

ShowEast continues through Thursday.