Is The 3D Price Hike Justifiable?

Before I go into this question, I have to get some things out of the way. I am not an economist. All I really know about economics is the basic supply vs demand rule. Hence, you will need to take what I'm saying here with a grain of salt. I'm just reacting to what I hear the market saying, and wondering out loud if there's a way to appease these oftentimes inconsistent potential consumers of 3D content. This isn't a researched marketing advice column.

That said, the loudest and most valid complaint I hear about 3D content is that it's too expensive, and that potential consumers can't justify the extra price for a 3D version of a show. Admittedly, if I wasn't trying to understand every failure and success that the 3D film medium has to offer by consuming every iota of it that I can, I would take the same approach. Most 3D films (e.g. Wreck-It-Ralph, Star Trek: Into Darkness, Hotel Transylvania) are not actually made to be viewed as 3D content. When a filmmaker makes their film with the 3D version intended as the foremost (e.g. Avatar, Hugo, Life of Pi, The Hobbit: An Unexpected Journey), they can accomplish wonderful things with the format. But if 3D is an afterthought, as it so often is, there is no advantage whatsoever to seeing the film that way, and you're usually wasting your money spending extra on the surcharge.

Maybe there's some chicken and the egg business going on here. The 2D version gets the most attention because that's how the grand majority of the audience is going to see the movie, and the audience goes to see the 2D version because that's obviously the one getting the most attention. But we're getting into my "why 3D content should be shown exclusively in 3D" argument, which I'm not on topic, so back we go to the original topic.

But while the surcharge pushes audiences away, I also understand how cinemas and executives justify the price hike. If you're not going the conversion route that most filmmakers are using these days, you're looking at buying twice as many cameras as an equivalently scoped 2D movie, buying rigs in which to store both of these cameras together, hiring a team of stereographers to keep the 3D from going wrong, and will require twice as much rendering time when you go to put the movie in post-production. Even if you're post-converting to 3D (which is relatively less expensive), you're still looking at delayed rendering, and hiring a (usually outside) company of hundreds of VFX artists rotoscoping objects and filling in black holes created by having to create stereo parallax where it doesn't actually exist. More effort to make the movie means more people to pay, and a greater risk in making the movie. If 3D won't pull extra people into the theaters, you're going to need to surcharge in order to make that money back.

I think that's the problem with their reasoning, though, and the lesson executives didn't learn from Avatar even though it was plainly obvious. Everyone was talking about the 3D film experience when Avatar came out. It was something unique that you had to experience. And 3D was the primary draw of the film, despite the surcharge. Yet Hollywood seems to believe that it's the Ferngully meets Pocahontas plot and characters that drove that movie to success, and that the 3D was just there to draw a few more dollars out of a standard audience.

My position is that 3D can carry itself, and that therefore they shouldn't charge more for it. It helped draw people in to see Life of Pi and Avatar, two films interesting for how they utilized their 3D techniques. That should be enough to justify the increased cost to production. 3D shouldn't be added to a movie if it's not going to help it tell the story it's trying to tell, but more movies can and should use it in their storytelling. This will draw in audiences, increasing income without increasing the ticket price of a 3D film. 3D ticket prices should be the same as their 2D equivalent to draw more people in.

Again, I'm not an economist, and given the 15-20% increase in 3D movie production costs, and the need for theaters to create 3D compatible screens, train employees in 3D exhibition (though that doesn't always work), and buy extra digital storage, I can really see why they feel they need a 30% increase in price vs. a 2D ticket. But the first theater to do away with the 3D surcharge I think will make that money back by seeing an increase in movie attendance, which is what Hollywood really needs right now. Despite a 30% increase in average movie ticket prices overall over the last decade, they've only seen a 17% increase in income (and that's with the boost 3D gave, according to MPAA statistics). This means Hollywood is making less money because of lesser attendance. They need a way to draw people back into theaters, and they're killing their first good answer to this problem by pricing people out of it!

It might actually be too late. So many people have derided 3D for the marketing gimmick Hollywood wanted it to be that audiences may be unable to accept that 3D can be used for non-manipulative purposes. Hollywood may have killed their chance. But there's so much untapped potential to 3D, I seriously hope not.