What Happened to the 3-D Dream?

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A year ago the buzz around everything 3-D was beginning to drown out the normal buzz around furry talking holiday toys. If you believed the manufacturers of TVs and the movie studios, it was only a matter of time before we would be watching everything in 3-D.

But this holiday season the tone has changed dramatically. Best Buy isn't running as many 3-D TV ads, ESPN isn't advertising their 3-D network, and even films in 3-D seem to be less prevalent. So what happened?

Too far too fast
A year ago, 3-D was exploding on extremely optimistic projections. RealD (NYSE: RLD  ) was adding its technology to theaters by leaps and bounds, movie studios were thirsty for added 3-D revenue, and after the success of Avatar, it seemed as if 3-D was can't-miss.

But Panasonic (NYSE: PC  ) , Sony (NYSE: SNE  ) , and Samsung didn't sell as many 3-D TVs as expected, and ticket sales began to wane. RealD has been hit especially hard after seeing disappointing box office sales and having a partnership with Samsung fall apart. Even an all-3-D channel by Discovery Communications (Nasdaq: DISCK  ) , Sony, and IMAX (NYSE: IMAX  ) has been stuck in a rut.

Hope on the horizon
But disappointment early in a new technology's life doesn't spell doom. 3-D has a niche role in movies and maybe even television, but it doesn't belong everywhere. Studios are beginning to learn this and are using 3-D more prudently.

Costs are also falling for 3-D televisions, making the extra cost more palatable for consumers. 2011 may not be a big year for 3-D in the home, but 2012 could be. 3net Head of Acquisitions Mark Ringwald recently pointed to projections of 12 million 3-D TVs in the U.S. by the end of 2012 as a point of optimism. Remember that HD didn't take over standard television overnight. It was a long process.

Fool contributor Travis Hoium owns shares of IMAX. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

The Motley Fool owns shares of Best Buy. Motley Fool newsletter services have recommended buying shares of IMAX and Discovery Communications. Motley Fool newsletter services have recommended writing covered calls in Best Buy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (0)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 14, 2011, at 12:12 PM, lykitiz wrote:

    Well said. Nobody should ever have expected that "everything" was going to be in 3D... ever.

    That being said, I'm not 100% sold on RLD's business model even if 2012 is a huge year for 3D (which I think it might be).

    A better 3D play with more upside would be Sensio Technologies. They provide a superior 3D format for 3DTVs and Live3D events. The stock was hit in 2011 but could see a big bounce in 2012.

  • Report this Comment On December 14, 2011, at 7:14 PM, racchole wrote:

    It hurts my eyes. Enough said.

  • Report this Comment On December 16, 2011, at 2:03 PM, LMSolo2 wrote:

    3D has changed forever thanks to one word- HUGO.

    Martin Scorceses' newest film (HUGO) has changed the big picture forever. I dare say that HUGO will win the Oscar for Best Picture and Best Director. It is practically a love letter to the Film Industry. That the 3D is stunning speaks for itself. What Scorceses has done is groundbreaking in that it addresses the very language of film making. It is the close-ups, the intimacy 2-shot conversation that has changed. No dizzy headaches here! You are going to be seeing A LOT MORE serious 3D dramas down the road!

    So, what does this have to do with the Markets? Plenty! Keep an eye on IMAX. Keep an eye on Disney (all those animated classics are going to be re-released in 3D). You may not know it yet, but your next HDTV is going to be 3D! Prices will drop and the 3D "option" is going to become standard equipment.

    AVATAR was a brilliant start. HUGO will make 2D as offbeat as shooting in Black and White.

    Be alert. Be informed. Be ready to trade!

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