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This topic comprises 3 pages: 1 2 3
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Topic: RealD Shares Collapse to All-Time Low, Lose Nearly 21% of Value
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System Notices
Forum Watchdog / Soup Nazi
Posts: 215
Registered: Apr 2004
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posted 07-28-2011 06:41 PM
RealD Shares Collapse to All-Time Low, Lose Nearly 21% of Value
Source: hollywoodreporter.com
quote:
Investors were mulling over earnings reports from Regal Entertainment and RealD after the closing bell on Thursday looking for clues as to the health of the exhibition industry. Their conclusion: 2D good, 3D bad.
In after-hours trading, shares of RealD were collapsing to an all-time low, shedding nearly 21% of their value after rising 3% to $18.42 in the regular session.
Earnings for Regal, on the hand, were called by one analyst, Michael Pachter of Wedbush Securities, “good” and the stock was up more than 6% in the after-hours session.
RealD posted quarterly revenue down 8% to $59.6 million and net income that fell 5% to $9.4 million.
Chairman and CEO Michael Lewis told analysts on a conference call Thursday that they should spend less time focusing on the percentage of tickets sold in 3D and more time looking at the total dollars generated by those sales.
Lewis, citing rough estimates, used Harry Potter and the Deathly Hallows Part 2 to illustrate his point. The film made more than $500 million worldwide opening weekend with half coming from 3D, he said, yet “media and pundits” called it “a disaster and disappointing” for 3D.
“I’ll take one of those disasters every weekend,” he said.
Lewis also boasted of a 133% year-over-year increase in RealD screens to 17,500, and he said results would have been better except for “competition for 3D screens domestically” that “clearly had a limiting effect.” Before earnings, in fact, RealD disclosed that AMC agreed to install RealD in up to 1,000 additional screens in the U.S. and Canada.
Judging from the reaction of the stock, down almost $4 a share in after-hours trading, analysts and investors weren’t buying into the CEO's positive perspective.
Lewis also said on a few occasions Thursday that exhibitors and studios were discussing lowering the premium charged to see a film in 3D – “everybody is addressing the tough economic times,” he said, but if a price decrease is coming it won’t immediately harm RealD’s business because its royalties are “locked in.”
Lewis also said that RealD took a small hit internationally because so many consumers were reusing 3D glasses, negating the need for purchasing new ones.
As for Regal, the exhibitor reported a 3% rise in revenue to $753 million while net income surged nearly 650% due to tax advantages and cost savings.
The company declared a 21-cent per share cash dividend, reiterated its intention to regularly pay quarterly dividends and said it was “encouraged by the early third quarter box office results and the prospects for the remainder of the year.”
The results were in stark contrast not only to RealD but also to Imax, which said Thursday that a weak film lineup led to poor second-quarter results. That revelation caused Imax shares to drop 17%, or $4.21 on Thursday to $20.21.
In breaking out its quarterly revenue, Regal said Thursday that ticket sales rose 2.6% to $519.3 million, concessions were up 3.3% to $200.2 million and the category of “other” rose 5.3% to $33.8 million.
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Steve Guttag
We forgot the crackers Gromit!!!
Posts: 12814
From: Annapolis, MD
Registered: Dec 1999
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posted 07-31-2011 07:18 AM
Actually, it isn't a good point...
What Real-D did was allow a single DLP projector to project a stereoscopic image. Unlike film, which used a split lens with two fixed polarizers, Real-D, with the Z-screen came up with a polarizer that switched, very rapidly, and in sync with the projector, the circular polarization that was applied to the image.
While the Infitec (Dolby like) single projector 3D system existed, it did and does not have the cost advantages, at the start that Real-D offered.
As such, Real-D got a BIG jump on the others, "Real" jump. It remains the cheapest cost of entry into 3D. Exhibitors that choose it often site "not having to deal with the glasses" (in terms of collecting, cleaning) and little to no cost of entry into 3D. Yes, it is the most expensive, but the pain is slow since one only sends a check after the tickets are sold. The other offerings are all up-front costs. However, these costs need to be recouped or there is no point in offering 3D and hence the up-charge.
As for film...3D in the 50s with dual-projectors was indeed a rather low-cost system. One needed polarizers (relatively cheap), a silver screen (long-term cost distribution so low-cost per-year) and selsyn-motors to keep the projectors in sync. (and I've heard of some that linked the motors with a gear-belt in lieu of selsyn (though I've never seen this set up nor pictures of it). In short, 3D in the 50s was relatively low-cost and the cost was not on-going.
In the 80s, it seemed like each 3D for the first year or two had a different lens system and the lenses were "rented" from companies like Stereovision (the most popular) and 3D was not so prevalent that one need own a lens. The glasses remained the cheap paper-frame things too. It was done on the cheap. It wasn't till the end that lenses that could be used with all over/under systems came out and the notion of purchasing a 3D lens started to make some sense...but then 3D ended (thankfully) and that was that. But again, the expense of showing it was minimal...mostly the screen...which could show 2D movies too.
With digital, what some just don't seem to get is the enormous expense it is to add to a 2D theatre...it is not like film. The apparatus itself is expensive, the extra light needed is expensive. And if one goes the Real-D route to not have the big upfront costs (but still likely to need more light), you now have a "partner" collecting money. No matter how you cut it, with digital 3D it costs significantly more to show than 2D. If 3D doesn't cover its up-costs, as a business, there is no point in fooling with it.
-Steve
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Steve Guttag
We forgot the crackers Gromit!!!
Posts: 12814
From: Annapolis, MD
Registered: Dec 1999
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posted 07-31-2011 09:10 AM
Frank,
The Sony/Real-D system is just that...an over/under system. The problem is the resolution...it relegates a 4K system to 2K...and worse than that, the total height of each image is 858, not 1080 since there needs to be a space between images. This yields two scope images of "2K" like resolution but fails at Flat since now FLAT is reduced to 858 x 1587...not even Home HD. Note film 3D also has issues with flat with the over/under systems for the same reason. Also, when film 3D was in its heyday(s), Scope images were WIDER (side movable) so if a Flat movie were to be produced...it used the same system. In the digital world, most cinemas now make Flat TALLER which means changing the focal length of the lens (zoom).
So an over/under 3D, while dispenses with the time-varient artifacts (both eyes are projected at the same time), it does inherently have resolution issues. This is a case where Real-D doesn't bring anything to the table yet has been able to collect royalties on their Real-D XLS lens (just a dual lens) with fixed polarizers.
Ad it begets the whole stupid running 2D movies with the 3D lens still in place...which, as I said, caps the resolution at 858 pixels tall..IF the installer gets the overlap perfect. Any misalignment comes off of resolution...a problem that Real-D XL in the DLP world suffers from. People judge this stuff from the booth too much. Put up a good crosshatch pattern like NEC's framing pattern and go down to the screen and look over the entire image...if those pixels do not align PERFECTLY over the entire image, your resolution just dropped. If you have a FLAT screen...you can get it pretty close unless the projection angles are great...if you have a curved screen...forget it. Without a doubt, as for Real-D, the best looking images are with the Z-screen, not the XL. However, the XL is twice as bright (half as bright a lamp is needed) so guess which one is favored?
-Steve
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Steve Guttag
We forgot the crackers Gromit!!!
Posts: 12814
From: Annapolis, MD
Registered: Dec 1999
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posted 08-01-2011 11:49 PM
Theatres normally use H x W...Vidiots have traditionally used W x H...hopefully that hasn't stumped you. Is 858 x 1587 more than 720P (1280 x 720)...yes...however, you will find that 720p a non-growning segment of the home market...it only gets any use by those worried about motion artifacts like sports (ESPN) since the home 1080 format is the evil interlace of 1080i. However, for movies, with BluRay and such, 1080p is becoming the norm as the players and displays can almost all deal with it.
Thus, in the home, most all movies are 1920 x 1080... 1.85 movies, if the ratio was preserved (though it rarely is since 16:9 is so close) would be 1920x1038. Theatres would still have an edge on scope since home is 1920x804. But seriously, a theatre with a screen many times the size of a home screen should not be competing with similar resolution, let alone lower!
-Steve
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