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It's been more than a year since Avatar changed everything we thought we knew about 3-D. Millions of movie patrons showed they would pay a few extra dollars for a 3-D experience at RealD (NYSE: RLD ) theaters, and even a few more dollars to see IMAX (NYSE: IMAX ) in 3-D.
Investors, analysts, and television manufacturers were giddy about the new technology. Some predicted the next step in television would start taking hold in the 2010 holiday season as Panasonic (NYSE: PC ) , Sony (NYSE: SNE ) , Samsung, and others began releasing 3-D TVs.
But consumers didn't buy into the new technology as quickly as hoped and manufacturers began to realize the 3-D revolution would take some time. Studios and movie theaters are starting to come to a similar realization about the big screen: 3-D has its place, but it won't make sense for every film.
Trading down to 2-D
Once the initial excitement wore off, 3-D's take of the box office began to become a concern. This week, RealD felt the disappointment when moviegoers enjoying Time Warner's (NYSE: TWX ) Harry Potter and the Deathly Hallows: Part 2 decided not to trade up for 3-D in the numbers analysts expected.
The slow realization that 3-D doesn't make sense for every film will be good for the industry in the long run. Films like Avatar, Alice in Wonderland, and Tron: Legacy will show 3-D's quality, while films that shouldn't be made in 3-D will stay where they belong in 2-D. This will actually help IMAX, which can demand a premium for both 2-D and 3-D films, but will force RealD investors to focus on consumer devices.
3-D isn't dead
Just because every movie isn't made in 3-D doesn't mean that 3-D isn't going to take a significant portion of the box office. This morning, Cinemark Holdings (NYSE: CNK ) and RealD announced they would be adding up to 1,500 more RealD 3-D-enabled screens, so there's still excitement out there.
After the mighty Harry Potter's disappointing debut in 3-D, studios and theaters will have to ask themselves: To 3-D or not to 3-D?
Keep up to date with 3-D's progress by adding these stocks to My Watchlist.