A forecast on the development of the 3D TV market in the US: Will 3D TVs become the next big thing in our living rooms?

Content

Executive Summary

Preamble

Content

List of abbreviations

Introduction
Problem Statement & Main question
Research Questions

Methodology
Data used
Tertiary Information
Secondary information
Primary information
Constraints and Limitations
Budget
Constant changes in the sector

Part 1 –Desk-Research
Results
What is 3D TV?
How is the 3D effect created?
3D – from 1838 to 2010
3D Costs and Revenues
The extra value of 3D
What is the market position of 3D TV in the US?
Consumer’s attitude towards 3D
The Challenges of 3D TV
Economic challenges
Technological Challenges
Sociological challenges
Trends and Development of the 3D TV market
3D Content
3D TVs
Prices
3D Glasses
3D online streaming
How does The consumer-adoption-process work?
Analysis
Relative Advantage
Compatibility
Complexibility
TrialAbility/Observability
COnclusion

Part 2 – Target Group Research
Research Design & Methodology
Problem statement
Target group
Sample Size
Adjustment of the sample size
Topics
Research Questions
Decisions of making the questionnaire
Testing of the questionnaire
Fieldwork
Online survey
Paper Version
Process of the fieldwork
Determining data
Control of the fieldwork
Control with the help of accessible data
Bias
Results
Research Question 1 – How are the innovators of the 3D TV technology characterized?
Research Question 2 – What’s the target group’s TV viewing behavior and How affiliated are they with new technology in the TV market?
Research Question 3 - What is the target group’s Perception Towards 3D TV?
Research Question 4 – How educated is the target group about 3DTV?
Research Question 5 – What are the obstacles to adapt to 3D TV?
Analysis
Analysis of the research questions
How are the innovators of the 3D TV technology characterized?
What is the target group’s TV viewing behavior and how affiliated are they with the technology in the TV market?
What is the target group’s Perception towards 3D TV?
How educated is the target group about 3D TV?
What are the obstacles to adapt to 3D TV?
How does the target group’s perception towards 3D TV influence the adoption rate of 3D TV?
Relative Advantage
Compatibility
Complexity
Trialability/Observability

Part 3 - Conclusion & Discussion
Explanatory Notes
Sources
Appendix i
Appendix 1 – Graphics
Appendix 2 – Questionnaire

Executive Summary

This research study answers the question of whether 3D TV will become a new trend or if it is a hype that will eventually fail to establish itself.

The paper is divided into a market research and a target group research. Both deal with the situation within the United States as the US has one of the highest market shares in 3D globally.

3D TV was introduced in 2010 and within that year the 3D TV sales made out 4% (3.2mio) of all TV sales. Within the US, 3% of the households purchased a 3D TV so far. According to E. Rogers’ book “Diffusion of Innovation” whose theory is used as a guideline throughout the whole research paper, those 3% make out the category of innovators.

In order to reach out to other categories of the adopter categorization as well, the 3D TV technology has to face economic, sociological and technological challenges. Those challenges as well as the trends and developments influence the adoption of the technology. Those influencing aspects can be grouped into five categories: relative advantage, compatibility, complexibility, observability and trialability. The research determines how the different aspects concerning the 3D technology influence these categories in order to come up with possible forecast of 3D TV.

The relative advantage is mainly influenced by the target group’s perception of 3D TV. While 3D TV aims to add an experience domain to the traditional experience of 2D TV, this is not especially valued among the target group. The price of 3D TV sets however does play a significant role – many consider the prices of 3D as too high. However the experience teaches that the prices are likely to decrease due to the price setting strategy called “price-skimming”. The most important factor concerning compatibility is the unfavorable launch-date of 3D TVs in the US. In 2010 most people have just bought an HDTV and now are satisfied with the technology they have and do not see any reason to buy a new TV any time soon. Other factors influencing the compatibility are the need to wear glasses, which are expensive and uncomfortable. Also the digital revolution plays a role – TVs in general lose their influence while computers with the help of internet have the role of a multi-media device that makes TVs redundant. On the positive side, the increased production of 3D content that fits the target group’s profile makes 3D perfectly compatible with the target group’s values.

Though 3D TV is a rather complex technology, especially a this time now that there is new technology developed all the time, creating an information jungle – the target group research shows that the target group is surprisingly well educated about the technology and that this education positively influences the perception towards 3D TV. Trialability/Observability – those two categories are grouped together within the research. Outside of the movie theaters, the trialability/observability is pretty limited . However there is a positive correlation between trialability/observability and the perception towards 3D. That shows that the people that actually have the chance to watch 3D at some place do like it and have an increased probability to purchase a 3D TV.

In the end and compared with the target group research, it seems as if the 3D TV technology will actually make it and become a new trend.

Preamble

This research study would not have been possible without the help and the endless support of my friends, family and the team behind Story House Productions in Washington, DC.

Conducting an extensive research study such as this one cannot be done without a group of people that offers support – not only concerning the needed knowledge, but also mentally. Therefore, this paper will never be a work that has been done all by myself, but was only possible with the help of a lot of people.

First of all I want to thank the team of Story House Productions in Washington, DC for giving me the great opportunity to work with and for them, and for all the knowledge and competences that I have gained.

I want to thank Katharina Osterholt for not only being a great friend during hard times, but also for sharing knowledge and in being an awesome motivator.

James P. Tanabe – not only for proof-reading, but also for your belief in me and your great friendship!

There were a lot more people that have supported me in different ways and without whom I would not be where I am right now.

I want to thank everyone who believed in me – even at times when I did not.

Anita Theis

List of abbreviations

illustration not visible in this excerpt

Introduction

The 3D technology is almost as old as the movie theaters and was invented by Charles Wheatstone in 1838. His discovery was followed by the production of the very first 3D movies in 1922 (Zone, 2007, p1). But despite of its early invention this technology had to go through a lot of ups and downs, changes and improvements for almost 90 years, before it made its debut to where TV established itself in the 1920s: the consumers’ living rooms.

2010 was the year in which the third dimension was introduced to private homes and has not been restricted to the movie theaters anymore (“An introduction to 3D Television”, 2010). Today, in 2011, the 3D technology is improved continuously in order to satisfy the consumer. But that does not make it easier to introduce it to the target group: Constant changes and developments create an information jungle for the consumer who therefore lacks the knowledge to make a well-informed decision about adopting to the technology. Because of that the danger is that 3D TV will fail to reach out to the broad mass.

Problem Statement & Main question

The major TV manufacturers such as Sony, Samsung, Panasonic or Toshiba introduced their first 3D TV sets in early 2010 reaching out to a global target group.

By the end of 2010, studies conducted by the Nielsen Company and Renub Research showed that only 2% of the US citizens have bought a 3D TV – globally a total of approximately 3.2 million 3D TV sets were sold, making out 4% of all TV sales in 2010.

The forecasts of 3D TV have been very ambivalent throughout: While some predictions expect 3D TV to become a major success for the entertainment industry and the new standard in the consumers’ living rooms within the next three to five years, other studies however conclude that the introduction of 3D TV had been too early and call it a hype that soon will be forgotten.

By taking the theory about diffusion of innovation into account, it seems the 3D TV technology has only been adapted by the category of innovators so far – the first 2.5% of people that adapt to a new product or technology. Several different reasons could account for the slow adoption rate: from the consumer’s perception of 3D TV to the challenges that this new market has to face.

At the same time however, the investment into 3D TV is high for both TV manufacturers as well as 3D content providers. Their challenge is to increase the adoption and reach out to a broader target group in order to turn 3D TV into a successful new niche product that has the chance to become a new trend and a new standard.

The key to success lies in the consumer – only if they are convinced of the new technology they be triggered to adapt to it.

This research is therefore determined to find an answer to the question of whether or not 3D TV will be able to increase its adoption among the target group and therefore become successful within the next 3 to 5 years.

This research is basically divided into two parts: Part 1 consists of an in-depth market and desk research of 3D TV and includes the challenges, trends and developments of this technology. Part 2 consists of a target group research that carrier the assumptions and conclusions of the market research part further and tests those on the target group directly. The results of both research parts then together will be able to answer the main question.

Research Questions

Several research questions were set up in order to find an answer to the main question of this research.

Part 1:

1. What is 3D TV?
2. What is the extra value of 3D TV?
3. What is the market position of 3D TV as of early 2011 in the United States of America?
4. What are the challenges of 3D TV?
5. What are the trends and developments of 3D TV up to Qt1 2011 worldwide and with a special focus on the US?
6. How does the adoption process of a new technology usually progress and how did the adoption process of the 3D TV technology progress in the US since its introduction in 2010?
7. How does the target group’s perception towards 3D TV influence the adoption rate of 3D TV?

Justification of Research

This research provides an in-depth insight into the market situation of 3D television and both its challenges and developments. This is complemented by a target group research about the consumer’s perception of 3D TV and the possibilities of increasing the adoption of this innovation. By providing insight into different studies that have been conducted about 3D TV, this research paper unravels all the available information and puts them into a new light to give an indication whether 3D TV will make its way to ubiquity or oblivion.

Everett M. Rogers (Diffusion of Innovation, 2003, 5th ed.) defined five characteristics that influence the adoption rate of an innovation. Based on his book, this dissertation determines in how far those characteristics favor or disfavor the adoption process of 3D TV and how current trends and developments within the 3D TV sector might improve this process. These conclusions are then used in a target group research in order to determine whether they are feasible and will lead to a higher adoption rate of the technology within the next 3 to 5 years.

In this regard, this research paper can act as a guide for both TV manufacturers and TV content producers that invest or plan to invest into 3D TV.

However, the main purpose of this paper is to become the starting point for marketing managers of those companies that already have their stakes in 3D technology; this research gives insight into how the adoption process can be improved and therefore it can be used as a foundation of a successful marketing plan.

Methodology

Data used

This research study is based on primary, secondary and tertiary data.

Tertiary Information

Tertiary information that is for this dissertation are databases such as LexisNexis and summaries of papers or market researches, when the access to the full information had been limited or restricted due to the costs of such an access.

Secondary information

The first research part consists of thoroughly researched information that was found in both print media and online media, accessible for a low or small budget and which was then analyzed in the light of the problem statement and main question of the paper. This information consists of up-to-date sources about 3D TV as well as theory of marketing, strategy and economy. Additionally, results of research e.g. MarketSearch, DisplaySearch and Nielsen were taken into account as secondary data.

Primary information

After the analysis of tertiary and secondary data, primary information for the second part of this paper was gathered by conducting a survey among the target group. By gathering primary information, it became possible to get results that exactly match the problem statement of the research. A detailed explanation of the methodology used for the target group research can be found in part 2 of this research paper.

Constraints and Limitations

Several limitations and constraints should be taken into consideration when reading through this research study.

Budget

This is a fully independent and non-financed research. There has been no budget available in order to conduct the research. However, the access to publicly available papers by market research companies cost between $1,500 and $10,500. As it has therefore been impossible to gain full access to those papers, this research relies to some extent on summaries of the above mentioned studies instead of official data.

Constant changes in the sector

As 3D TV is a relatively new technology which is going through a lot of developments and changes, new information might have been released during the time this research was set up, conducted and analyzed. Though this research paper aims to give insight into the latest developments of 3D TV, some of the information laid out might not be up-to-date anymore at the time the paper is published. All information has been taken into account as of March 2011.

Results

The following chapter will answer the research questions of part 1 of the research.

What is 3D TV?

How is the 3D effect created?

3D refers to anything that has height, width and depth. The human eye itself however sees only height and width – 2D. The reason that we experience the surrounding world with a 3D effect is due to our brain. The human’s eyes are about 2.5’’ (6.5cm) apart from each other, so that each of the two eyes sees an object from a slightly different angle at all times (Koninklijke Philips Electronics N.V. [Philips], “What is 3D?”). The brain takes those two images and processes what we see into a 3D view: a 2D world with depth as an added dimension.

Modern 3D technology tries to achieve the same effect by showing two separate images, one to each eye at a time. By converting those two images together such as in “real life”, the brain creates the 3D effect for us. This is called stereoscopic 3D (Media College, “What is 3D?”.) and is often referred to as the “real 3D”, because there are also different ways to create 3D effects synthetically.

3D – from 1838 to 2010

After the discovery of 3D by Charles Wheatstone in 1838, different feature films for 3D were developed with a major emphasis on the gimmicks that this new technology offered, for example objects that seem to fly towards the audience (Zone, 2009, p.1). But the 3D technology experienced its first real boom when more than 50 3D movies were produced between 1952 and 1955. The second boom of 3D occurred in 2005 with the release of the first digital projected 3D movie “Chicken Little 3-D”. But a new milestone in the history of 3D movies and a breakthrough of this technology occurred with the launch of James Cameron’s blockbuster “Avatar” (Sander, 2009) – the most successful movie in history. It even surpassed Titanic which held this position since 1997 (Box Office Mojo, “All Time Box Office – Worldwide Grosses”).

The booms of 3D movies in the 1950s and around 2000 had a specific reason: the everlasting competition between the movie theaters and home TVs (Mendiburu, 2009):

In the 1950s and 1960s a major development for TVs was when color TV sets were introduced globally, turning TV into the major competitor for the traditional movie theaters. People started to value watching TV at home more than going to expensive movie theaters. In order to gain back their market share, the theaters therefore had to come up with a new competitive advantage: the 3D technology (Mendiburu, 2009, p6-7). Back in the 50s and 60s, the 3D technology has obviously not been fully developed yet and 3D was shown in color anaglyph, requiring the audience to wear the well-known red/cyan or red/blue plastic glasses. Nevertheless - it created new revenues and the cinemas were once again filled with a huge audience. But the appearance of the Digital Revolution changed the TV sector once again: home entertainment, video-on-demand and file sharing became another stroke in the competition between TVs and cinemas. Those developments in home entertainment gave the consumer the freedom to watch whatever he liked whenever he wanted to. This resulted in a decrease of revenues for the cinemas once again and built the basis for the need invest into the production of a new generation of 3D which eventually lead to the next boom of 3D. A lot of money was invested for the production of new and better technology with the aim to create a better experience and an added value for the consumers.

3D Costs and Revenues

3D in the cinemas stands for “Dollars, Dollars, Dollars”: During opening weekends, a 3D movie makes three times the revenue of a 2D movie. But yet, all 3D movies that are released need a supplementary 2D version in order to pay for the costs. So far there are not enough 3D capable theaters in order to pay for all the costs (Mendiburu, 2009, p4).

The extra value of 3D

Any new technology, product or service on the market should have at least one relative advantage to other similar products/services/technology in order to attract customers. The same goes also for the 3D TV technology. This paragraph unravels the unique selling point (USP) of the new 3D TVs.

Not only does 3D add depth as a third dimension to the TV experience – but by imitating the natural vision of the human eyes, 3D increases the immersion of the audiences and therefore positively improves the affect of identification and projection. By providing 3D images to the consumer, less brain activity is necessary. This results in a more immerged audience that can enjoy more of the TV watching activity (Mendiburu, 2009).

There are four experience domains described by Pine and Gilmore, differentiated by two variables: the degree of participation (passive or active) and the consumer’s relation to the environment (absorption or immersion). An experience belongs to at least one of these domains but is considered to be stronger and more valuable if it consists of more than just one domain (Nijs & Peters, 2006).

The four domains are:

1. Entertainment
2. Educational
3. Esthetic
4. Escapist

(Pine & Gilmore. 1999, p 30 - for the graphic please refer to graphic 5 in appendix 1)

Usually, watching TV is an activity in which the consumer absorbs the movie passively – which is why watching TV is considered to belong to the domain of Entertainment. With the introduction of 3D however, the same activity becomes more immerging and adds Esthetic values to the experience.

The domain of esthetic is characterized by style, beauty, art, etc. and a passive consumer who cannot interact with what is going on (Nijs & Peters, 2006). Or as Pine and Gilmore summarize:“While guests partaking of an educational experience may want to learn, of an escapist experience to do, of an entertainment experience want to—well, sense might be the best term—those partaking of an esthetic experience just want to be there.” (Pine & Gilmore, 1999, p35)

Watching 3D TV therefore creates a more valuable and memorable experience for the audience than traditional 2D movies and shows.

The perception however about what is a valuable experience cannot solely depend on theories like that alone: it depends always on the consumer’s perception. That is why the target group research in part 2 should give a more accurate answer to the question if 3D TV is able to create a more valuable experience compared to 2D TV.

What is the market position of 3D TV in the US?

In early 2010 the world’s biggest TV manufacturers such as Samsung, Sony, Toshiba and Panasonic launched the first 3D home TVs in the new market.

A market research conducted by Renub Research called “3D TV Market and Future Forecast Worldwide (2010 – 2014)”, published on January 19, 2011 at www.marketresearch.com expected a total of 3.2 million 3D TV sets to be sold globally in 2010, a number that makes out 4% of all TV sets sold in the same year. Additionally, their forecast for the 3D TV market expects the unit sales to grow with a compound annual growth rate of 79.12%, passing the landmark figure of $100billion worldwide by 2014 (Market Research, 2011).

A report published by Display Search called “Quarterly TV Design and Features Report, Q4 2010” expects 18million 3D TV sets to be sold in 2011 and 90 million by 2014. With a combined market share of 66.17%, the USA and South Korea are the main protagonists on the 3D TV market (Display Search, 2011; Gagnon, 2009; Tribbey, 2009).

The United States are a potentially big market for 3D TV: 115 million homes out of a total of 130million (U.S. Census Bureau, 2010) have at least one TV – a total of almost 88.5% of the households. The average US household is equipped with 2.5 TV sets while almost a third of them (31%) have 4 TVs or even more. According to the Nielsen’s National People Meter (NPM) from September 2010, the “average American” spends 25.6 hours per week watching TV (The Nielsen Company, 2011 - see also graphic 6).

These numbers show clearly that the USA has a great potential and a wide and diverse target group to introduce 3D TVs to. Nielsen’s NPM and Nielsen’s Global Survey from September 2010 also indicate a percentage of 46% of all Americans who own an HDTV of which 14% are connectable to the Internet. Their data also show that 2% of the Americans have already purchased a 3D TV with a total of 2million 3D ready HDTVs being sold in North America in 2010 (The Nielsen Company, 2011)^[1]. Those percentages indicate that there is not only a broad target group for new technologies, and that the group of innovators within the States already adapted to this new technology.

Consumer’s attitude towards 3D

According to a large scale quantitative research with consumers, conducted by CBS Vision together with Nielsen and CTAM, consumers are generally positive towards 3D TV: 76% of the surveyed people state that they are at least likely to buy a 3D TV, 17% of which are even “definitely” likely. However only 14% intend to buy a 3D TV within the next 12 months, another 42% want to wait at least 2 years and 34% want to wait three to four years. So even though the consumers are generally positive towards the new technology they are not yet ready to adapt to it. 48% find watching 3D content more engaging than 2D and 57% say that it made them feel like being part of the action and another 48% state it makes them feel closer to the characters (The Nielsen Company, 2010)^[2].

The Challenges of 3D TV

3D TV as a new product in the market faces a diversity of challenges. According to the PESTEL model, challenges can be divided into p olitical, e conomic, s ocial, t echnical, e nvironmental and l egal challenges (Johnson, et al., 2008).

When analyzing the 3D TV technology, the most important challenges can be grouped into sociological, technological and economic factors. The sociological challenges probably have the greatest influence on the adoption of 3D TV as those deal with the potential consumers’ perceptions and concerns and the marketing strategies of the 3D industry. On the other hand, technological problems and challenges need to be faced in order to make 3D TV more successful. The following paragraph analyzes those challenges in detail in order to come to a conclusion in how far which aspect needs to be improved in order to increase the adoption of 3D TV.

The major challenges on the 3D market that will be discussed are:

- Economic Challenges
- Costs
- Launch-Date
- Technological Challenges
- Standardization of technology
- 3D glasses
- Lack of content
- Sociological Challenges
- Consumer’s wait-and-see approach
- Education of consumers
- Mistaking the 3D effect by 3D producers

Economic challenges

Costs

Both the production of 3D content as well as the manufacturing of 3D displays is more expensive compared to their 2D counterparts. The costs of 3D movie productions are up to four times the costs of the same movie produced in 2D (Mendiburu, 2008). And at the end the consumers have to pay for these extra costs. Even though the prices dropped drastically since the introduction of 3D TVs in 2010, 3D sets are still more expensive than 2D sets. Also, in order to watch 3D at home – to buy just the 3D TV is not enough. The consumer needs to buy a whole set, consisting of the 3D display, a 3D BluRay Player, a transmitter and 3D glasses. All of that added together makes the 3D experience at home a rather expensive one. Especially for large households the 3D experience can get really expensive because they need to purchase multiple pairs of 3D glasses. And as long as the active shutter glasses (around $120 per pair) are the most widely used– this can sum up to become a huge investment just in order to watch 3D at home.

Unfavorable launch-date

The introduction of 3D TVs to the North American market occurred after the majority of the household adapted to HDTV. Apparently some 21% of all US households bought a new TV within the last 12 months and consider themselves set with their TVs. Only 18% of the households plan to purchase a new TV within the next 12 months (Entertainment Marketing Letter, 2011). This unfavorable launch date of 3D TV might explain a low adoption of the technology.

Technological Challenges

Standardization of technology

There is neither a defined standard for 3D TV production right now but there are also a lot of different technologies on the market. The consumer has the choice between active or passive 3D TVs, maybe at some point even auto-stereoscopic 3D TVs; he has the choice between LCD or Plasma displays and much more different options. Even though it seems that there should be technology to fit all the different types of consumers, this huge choice actually creates an information jungle, confusing the consumer. The usual consumer is hardly able to keep up with all the latest developments and changes of the technology and therefore becomes confused. This confusion can lead to some sort of frustration that leads to the fact that the consumer develops a wait-and-see-approach (see sociological challenges – consumer’s wait-and-see-approach) and hesitates to adapt to the 3D TV technology.

3D glasses

3D glasses are a challenge for the 3D TV technology in different ways.

According to studies conducted by the Nielsen Company together with CTAM, the main reasons the target group named about why they do not buy a 3D TV are: costs (68%), and the need to wear 3D glasses (57%) (Nova Gazette, 2010).

The most widely used 3D TV technology is active 3D that requires so-called active shutter glasses in order to see the 3d effects. Those glasses cost – depending on the manufacturer – between $100 and $150 per pair. But those glasses only work with a 3D display from the same manufacturer and are not compatible with a 3D TV from another brand. That means that a consumer who decides to purchase a 3D TV from one brand and at some point might want to buy a new one from another brand, the glasses become useless. It also makes it impossible to “just bring your own pair of 3D glasses” to someone else’s place and watch 3D TV there together if this person does not have a 3D TV from the same brand.

According to the Nielsen&CTAM research, it is not only about the price of those glasses but the consumer also considers them to be very uncomfortable.

Lack of 3D content

Even though the different manufacturers develop more and more 3D TVs of all sizes, the 3D content still pretty much limited to 3D movies that are available on DVD. For the consumer this obviously is a major issue that makes them hesitate to buy a 3D TV (Shein, 2010). According to The Nielsen report about the consumer’s perception towards 3D TV the Top 3 of content they want to watch in 3D are Sports, Nature/Animal and Action/Adventure shows (The Nielsen Company, 2010, see graphic 11).

Sociological challenges

Consumer’s wait-and-see approach

Due to former format battles such as the battle between Plasma vs. LCD displays or BluRay vs. HDTV – consumers learned to not adapt to a new technology that is available on the market right away. They tend to wait until there is one “winner”; one clear format that gets implemented for mass production to which the consumer then adapts, in order to rashly adapt to a technology that might fail in the end (Stagliano quoted in Entertainment Marketing Letter, 2011).

Yet another reason that contributed to the consumers’ wait-and-see approach was Toshiba’s announcement in 2010 to launch its first auto-stereoscopic (means: glasses-free!) 3D TV worldwide during the second half of 2011 (Lilly, 2010). As seen earlier, the 3D glasses are of a great disadvantage for the 3D experience – so the idea of eventually having a 3D TV soon that does not even require glasses at all anymore, leads to a consumer who is happily waiting for this improvement of the technology before he goes and settles for a 3D TV that will not completely satisfy his needs, while a glasses-free 3D TV will bring an essential advantage. Additionally, the consumers are aware of the fact that if they wait until the technology settles, the prices will drop. In that case that means instead of purchasing a 3D TV now – if they wait some more time they will get a better product for a cheaper product. This is called delay of gratification and increases the consumer’s wait-and-see-approach.

So while the consumer might be interested and excited about this new technology – he is not yet ready to buy (The Nielsen Company, 2010).

This is also the reason why only innovators and early adopters are likely to adapt to a new product/technology during its first phases of the product-life-cycle, while the mass waits and needs to be persuaded of it by strategic marketers.

Not sufficiently educated consumers

One problem of the 3D industry is still that the potential consumer just knows too little about the technology and the possibility that it holds. A lot of people seem to be unaware of the fact that a 3D TV does not mean that you can only watch 3D content on it, but that it works as a very good 2D HDTV (Roberts, 2010). The manufacturers therefore need to concentrate on selling the 3D technology not only as a 3D TV itself but as a high-quality HDTV with the ability to also show 3D content.

Mistaking the effect of 3D

This challenge refers mainly to the 3D content producers. A danger of producing 3D is to think that everything that is made in 3D will attract the consumers. However, people go and see movies or shows because of the content, the story and the concept – not because they want to “see technology”. The 3D technology adds a new dimension to the experience of watching TV, but does not create a completely new experience as it is not standing on itself but acts as an addition to something that already exists. Therefore for 3D the same rules apply as they do for 2D – in order to get people behind the screen there needs to be a good concept and a good story, and a bad 2D movie will not make a good 3D movie either – but a good 2d movie might become more attractive in 3D (Mendiburu, 2008). Humans seek per definition for diversification (Nijs & Peters, 2006). They are attracted by 3D because it adds a thrill to their experience if e.g. objects are flying towards them. The challenge for 3D producers is to combine the experience-domain-adding gimmicks with the essential part of a good story-telling (Mendiburu, 2009).

Trends and Development of the 3D TV market

The following paragraph deals with the current trends and developments on the 3D TV market as of March 2011:

- New 3D content on the market
- New technology
- Passive 3D TVs
- Auto-stereoscopic 3D
- Universal 3D glasses
- Decreased prices
- 3D Online-Streaming Services

3D Content

Though so far there is only a limited amount of 3D content, within the next few months there will be more than 40 new 3D movies released and additionally, some TV shows starting in 2011 will also be available in 3D. Combined with a great number of sport events broadcasted in 3D, both networks and production studios spend a huge amount of money in order to make more 3D content available for the customer (Oshannessy, 2010).

Also several broadcasting channels unveiled their plans on launching 3D based channels in 2011 – all of which together help to broaden and diversify the available 3D content for the consumer.

Some examples are:

3Net – on February 13, 2011, 3Net was launched, a joint venture of Discovery, Sony and IMAX, offering 3D content 24/7 (www.3net.com).

XFinity 3D – launched on February 10, 2011 by Comcast. A 24/7 3D channel that broadcasts concerts, sport events and movies (Inside Satellite TV, February 18, 2011).

ESPN 3D – launched by Comcast in June 2010. They broadcasted some of the 2010 World Cup matches live in 3D and nowadays broadcast diverse sport events live such as boxing, golf or NBA games (www.espn.com).

3D TVs

As 3D TVs are still new to the market, a lot of improvements and changes are constantly made to this technology. The two most important developments of 3D TV technology are discussed here.

Autostereoscopic 3D TVs

Auto-stereoscopic 3D refers to a new technology in the 3D sector which does not require the need to wear 3D glasses in order to see the 3D effects. This technology is already used for the new Nintendo console, the 3DS, which was launched in North America, Europe and Australia in early 2011 for a retail-price of $249,99 (www.nintendo.com). Also LG uses this technology with the world’s first auto-stereoscopic 3D cell phone, the Optimus 3D (www.lg.com).

After Toshiba announced their plans in 2010 to launch the first auto-stereoscopic 3D TVs worldwide in late 2011, they started introducing the first 3D TVs without glasses in Japan on December 22, 2010. For about $3,400 the consumers can buy a 12” or a 20” 3D TV for which they do not require 3D glasses (www.toshiba.com). Despite the presentation of larger auto-stereoscopic 3D TVs at the CES in Las Vegas in 2011, there is no indication to be found on how much progress they made for their planned global introduction.

Even before Toshiba’s announcement of launching glasses-free 3D TVs, Philips has already started producing those displays but discontinued the production due to a slow adoption rate, stating that the market is not yet ready for this technology (www.philips.com).

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^[1] Data from Nielsen’s Global Online Survey conducted 09/2010. Nielsen surveyed 26,644 online consumers ages 15+ in 53 countries. This numbers only include US and Canadian consumers.).

^[2] Nielsen Wire – quantitative and qualitative research conducted in collaboration with CBS Vision and the Cable & Telecommunications Association for Marketers (CTAM) among 12 groups and families being exposed to 3D content for 30 minutes at Sony’s 3D Experience Lab in Las Vegas plus an additional 425 participants watching 3D content in a more theatrical surrounding. Results published on December 20th, 2010 at www.nielsen.com