3D - Not Enough Sales Dimension
It appears as though 3D TV is not the panacea that everyone predicted for electronics manufacturers and retailers this holiday season. While Apple products fly off the shelf, 3D TV's are being relegated to the price discounting game. The "build it and they'll come" paradigm isn't working. Instant sales gratification is proving to be extremely elusive for retailers. Marketers ignored all the warning signs that a cannibalization strategy wouldn't work this time around. There is only so much leap-frogging technology a consumer can take, either emotionally or rationally, with their discretionary entertainment dollars.
There were lots of mindset and market climate barriers in place that should have tempered everyone's enthusiasm for all things 3D. First - it's the glasses. That is a huge impediment to adoption of all things 3D. It's okay for two hours at a movie theater, but over a prolonged period of TV viewing time, many are saying "no thanks." From Apple to Toshiba, many manufacturers are working feverishly at overcoming this formidable market penetration obstacle.
The lack of 3D content is another driving force. In the entertainment world, content and context are vitally important elements that are inexorably linked. The scarcity of 3D content is a huge barrier that alienates and stifles the early adopters - the engine behind technology acceptance and outrageous profits for the manufacturers and retailers as well. There is lots of doubt and no guarantee that 3D programming will ever become as widespread as HD.
The phenomenon of too fast over too short a period of time is in play as well. It wasn't all that long ago that high definition TV came on the scene - 1998 was the year! Sales weren't measurably significant until 2003/2004. According to the Consumer Electronics Association, in 2009, 50% of U.S. households had an HD set, which leaves more room for further penetration, albeit at reduced pricing and profit margins. How many of these consumers are ready to toss their "new" HD sets for a 3D version? They haven't received the price to value return on their entertainment investment and are resisting paying up to a 3D set.
Sales numbers/shipments for 3D TV's were originally forecast by Display Search to be 1.6 million in North America for this holiday season - down from a 2 million forecast earlier in the summer. Final numbers won't come close. There is not enough demand or real consumer need - two important factors that have been forgotten. Not when there still will be 11 million flat panel TV's sold in the fourth quarter of this year.
It will be interesting to follow the news about all things 3D at this week's Consumer Electronics Show in Las Vegas. Many are betting big on 3D - from 3D eyewear, 3D in handheld devices and 3D technology in digital signage. 3D is still in its product life-cycle infancy. The opportunity is limitless for those that get it right.
3D has to add to the consumer's experience - either through entertainment or information. Can it make our lives better, which often is the driving premise behind the adoption of technology? The problem is 3D is perceived as a gimmick. Can you name more than one movie you went to exclusively to see the 3D effects? It is still always about the story - always has been and always will be in movie making. Hollywood has latched on to the revenue potential of charging $3.00 to $5.00 more per ticket for a 3D film. The question is, does 3D add anything of real substance to the experience? Thus far it is debatable.
Technology for the sake of technology doesn't get you anywhere. It has to appeal to both the heart and the mind. 3D will certainly have a strong place in your future use and consciousness. The question is, how deep it will be? Early returns on 3D TV's have fallen flat. Can 3D be the game changer that everyone predicts? It is a marketing/technology story worth watching and following.
Keywords: 3D TV; 3D TV Sales #'s; Holiday Season Electronics Purchases; Electronic Retailing - 3D TV's
It will be interesting to see if the real killer will be the report that young kids get nauseous watching in 3D. Sick kids would be a definite buzz kill for family TV watching.
Well said, Bill. One could also blame the economy for a lack of enthusiasm, but that does not hold water when you see the rush to drop $500-$800 on ipads. It's just too soon for the general public to catch on. When your neighbor has it and the prices drop then it may become a "got to have it" product which won't be until years from now.
The economy is doubtless a factor, but Bill's right that lack of compelling content is the main issue. I think 3D is here to stay, but a few gimmicky movies aren't enough to drive consumer demand.
It seems to me that the key to making 3D TV a "must-have" is sports programming. And I'd bet plans are already well under way for the first 3D Super Bowl broadcast.
That, and other "3D events" (NBA Finals, NCAA Final Four, World Cup, Olympics) will lead eventually to ESPN3D and other 3D sports networks.
In the meantime, the glasses will inevitably get less clunky (remember those shoe-size cell phones the slick early adopters used to haul around?). Maybe the glasses will even go away altogether.
And perhaps, the entertainment, news, and documentary folks will use the interval to figure out how to harness 3D in meaningful service of their content. Dancing with the Stars in 3D? This Old House? Discovery Channel and SyFy could have a field day. The potential is there, but the content needs to catch up.
Sony, a major manufactorer of 3D televsions, uses celebrities in their commercials, such as Peyton Manning and Justin Timberlake. The commercials depict these two celebrities wearing the 3D glasses and how they work. The use of celebrities can cause an increase in sales but it does not seem to be working in this case. Peyton Manning is an excellent tool for Sony commercials right now, especially with the Super Bowl coming up in February. Although his team may not be in the Super Bowl, it appeals to sports fans. Some of the commercials for the Super Bowl will be in 3D and require the glasses. However, with all the HD televisions sold this Christmas season, it doesn't seem that many viewers will be putting on their 3D glasses to watch the big game or the commercials.