When Broadcasting Was Still High on the 3D TV Promise

This month’s NAB conference was a reminder that the satellite industry is always looking at the next big opportunity in the broadcast market. It wasn’t that long ago where many felt 3D TV could give the industry a significant boost. In a trip into our archives, we look at this interview with 3net CEO Tom Cosgrove back in 2011 about the future of 3D television. 3net, a joint venture of Discovery Communications, Sony and IMAX Corporation, was optimistic at the time. However, the future for 3D TV would prove to be quite short-lived. This article was originally published in the September, 20011 issue of Via Satellite.

January 2010 was a landmark month for 3D TV, as ESPN, DirecTV and Discovery made significant announcements at the Consumer Electronics Show regarding 3D TV content and channels. DirecTV aimed to be one of the first satellite pay-TV platforms to have a solid 3D offering. ESPN signaled its intention to become a leader in providing sports coverage in 3D. Discovery Networks also was quick out of the blocks with their own initiative. 3net, a joint-venture channel from Discovery, Sony and Imax, was created with a mission to become one of the early leaders in 3D content delivery to households in the United States.

A year and a half later, the initial optimism surrounding 3D TV has now given way to more circumspect forecasts about future take-up. U.K. research company Ovum was particularly downbeat in a forecast earlier this year saying “there is a clear lack of enthusiasm for 3D TV in the broadcast industry.” Despite this forecast, many DTH providers have been quick to launch 3D TV services, with DirecTV and BSkyB showing a clear appetite. While 3D TV may polarize opinions among broadcasting executives, many still believe this is an exciting new medium for consumers.

One man who is confident that 3D TV has a big future is Tom Cosgrove, president and CEO of 3net. Here, he explains why he is still a believer in 3D TV, and how he aims to make 3net a force on the 3D TV landscape.

VIA SATELLITE: What would you say have been the key 3D lessons to learn so far?

3net CEO Tom Cosgrove. Photo: 3net 2011

Cosgrove: There are a couple of things; 3D TV is more challenging than it seems, but when thought of in the right way, it is a fairly straightforward way of creating television. There is definitely a learning curve when you get into this business, and there are many things you have to figure out initially. There is a technology part, which plays an important role with 3D television that you really have to grasp and understand in order to use as an effective creative tool. Once you get through it, you realize what the key demands are and what you need to understand. It really then just gets back to making quality television that incorporates 3D TV as a creative medium. But yes, I think there is definitely a learning curve. Also, there are costs involved with 3D TV that are above and beyond HD. It is still a more expensive way to make television. But every day we see new technologies coming out and more efficiencies. One of the key challenges is to stay on top of the advances in the marketplace — new tools that provide more creative and efficient ways we can approach both production and post-production in making 3D TV.

The other challenge is to make sure people really understand 3D TV. There are some mis-conceptions around in the marketplace. But, they are starting to fade away. As one of the early 3D TV channels, we are intrinsically linked to people buying a 3D TV set. Getting through some mis-conceptions has been important. For example, when you buy a 3D TV, you are also getting one of the best (2D) HD TV sets on the market. There was confusion in the market place about that. There was also confusion in terms of what was available in the market place. We are seeing that change. People are understanding what 3D TV means, and that is part of the learning curve generally for any new technology.

VIA SATELLITE: What are the challenges on the production and technical side when producing 3D TV?

Cosgrove: Early on, the biggest challenge we really had was that myself and the team have worked with a lot of great producers in our previous positions, but there really weren’t any experienced 3D TV producers, because why would there be? So in the beginning, it was really about working with our production partners and figuring out how we get people up to speed and how we make sure they understand the things they need to understand in pre-production, production and then post-production to make the best possible 3D TV we can. We sent hundreds of producers, directors and people we worked with through the Sony 3D Tech lab — they have seen around 1,500 people so far, and many of those people have come from 3net. So we have done a lot to work with our producers to get them educated on how to produce in 3D TV. There also has been a lot of work with the partners of Discovery, Sony and IMAX, and with their technical and production teams to put together guidelines in terms of how we make 3D TV — to really work out production and post-production tools, software, cameras and stereo issues that need to be considered. We are going through the process here at 3net and with our JV partners and then sharing that knowledge with the production community at large. At this point, there is a virtuous cycle of knowledge where everybody is learning off of one another in this community.

VIA SATELLITE: What are your demands for satellite capacity as a result of going to 3D TV?

Cosgrove: The bandwidth issues have not been all that significant, no more than they would be for any other channel. As a 3D TV channel, we do take up a little more bandwidth than an HD channel. It is about 30 percent more. It is not double, which surprises some people. Bandwidth is an issue for everybody to some extent, but for us it has not been an over-riding concern.

VIA SATELLITE: What is the timeline for 3net being on platforms other than DirecTV?

Cosgrove: I fully expect the distribution side to grow. I can’t really tell you who is next and when, but we are in discussions with everybody and pretty far along in those discussions with several parties. The distribution is continuing to grow. There is interest from satellite, cable and telcos — so across the board. It is just a matter of time before those turn into commercial deals.

VIA SATELLITE: Outside of North America, what is your strategy? When do you expect to have an international presence?

Cosgrove: We are still working through what our strategy will be internationally. Obviously our partners in the business have international footprints, so there have been discussions on how we best work with them, and how to decide what our international strategy is going to be. We haven’t set that yet. It is still very much a discussion in figuring out the best model to send content around the world. It will go around the world; the question is how, whether as a standalone channel or a distributor. We will start to see our content showing up outside the United States this year. I think we will start to see it in bigger numbers next year.

VIA SATELLITE: How is 3D TV advertising developing? What levels of revenue do you hope to generate through this service?

Cosgrove: We have seen quite a bit of interest. All the research suggests that one of the really compelling components of 3D TV is engagement. This is one of the big things that advertising partners look at — how engaged consumers are going to be with the medium. All the research points to a very high level of engagement, well beyond what you see in HD. So they know it is a medium that can produce results. We have had a lot of interest. We have recently announced deals with Sony Electronics, which is one of our partners, and XpanD, which make the 3D agnostic glasses. We are also in serious discussions with quite a few other advertisers.

Currently, we are primarily looking at sponsorship models, so people coming in and sponsoring blocks of series. Several potential advertisers are in the early stages of production on 3D TV commercials. Some have not yet started the process, so we are trying to find other ways to partner with them and get their message out on the channel. There has been pretty significant interest. As we start to settle in as a channel, it starts to grow and as we get into our second year, we are going to see some pretty significant sponsorship deals on the channels. There is definitely not a lack of interest.

VIA SATELLITE: Ovum, a U.K. research company, has released a report noting there is a “clear lack of enthusiasm for 3D TV in the broadcast industry” and that it was of low strategic importance to most broadcasters. Do you agree with these sentiments?

Cosgrove: I don’t agree with that at all. We know there is quite a bit of interest from the distributors and we have done several co-productions with companies around the world in Europe and Asia. From where I am sitting, we have seen a lot of interest. We are at the stage where we have been on the air around three months here in the United States, and ESPN 3D has been on the same amount of time. The amount of content available is still on its way up. We will continue to grow and others will begin to offer content, and at the end of the day, content is going to motivate people. If they don’t have anything to watch, there is only going to be so much interest in 3D TV. But I think this year we are really starting to see that change. Between what we are doing and what we are seeing with platforms beyond television, this will help broaden 3D TV. There will be handheld devices. You have still and video cameras coming out able to shoot 3D, so that will create interest in user-generated content and more things on YouTube and services like that. All of those pieces will help develop the 3D TV platform broadly. So the more people put 3D on YouTube and other platforms is good for us, and likewise us putting stuff out on our channel, that is good for everyone else. I think we are starting to see that convergence in the market place where the content and the hardware are really starting to come together, where as they haven’t before. It is pretty early on its life span, but as a platform, we are starting to see it take-off this year. This is the year where we are really going to see that type of growth.

VIA SATELLITE: Has the adoption of 3D TV been slower than you anticipated?

Cosgrove: It has actually been faster than we anticipated. In terms of the adoption of technology in the home, it is running about twice as fast as the adoption of HDTV, at least in the United States. The projections we see in the marketplace show that it will only ramp-up even faster in the next years. The projections suggest there will be 18 million 3D TV sets in homes by the end of the year across the world. There will be that many in the United States alone by the end of the following year.

Early in 2010, there were some really high numbers out there that were perhaps unrealistic. By the end of 2010, the actual numbers were well above what HD was at the same stage. With the content coming into play, and with all the other platforms coming out into the market place, we are going to see that really spike in the next couple of years. There are more TV sets coming into the market place and a slew of 3D movies. I think all of that will lead to a broader interest in 3D TV.

VIA SATELLITE: How do you see the 3D TV landscape changing in the next year?

Cosgrove: We are going to see more demand in the marketplace. From everything we have seen, the TV sets are going to be there, the content is going to be there and we are going to be there. We are as bullish as we have ever been about 3D TV.

VIA SATELLITE: What role will 3net play in the 3D landscape?

Cosgrove: For us, it is all about seeking out the highest quality projects we can find. We really want to try and find projects that are going to motivate people to come to 3net and adopt the technology. We continue to work with production partners across the television landscape, whether that is fiction, non-fiction or other genres. We are looking for great television producers whom we can work with to become great 3D TV producers. The challenge for us is to set the highest bar we can set in the marketplace. We are going to see more demand in the marketplace. From everything we have seen, the TV sets are going to be there, the content is going to be there and we are going to be there. We are as bullish as we have ever been about 3D TV.