[Satellite News 01-03-10] 2010 was the year when 3-D TV went from being a far out technology to being part of the mainstream with a slew of announcements throughout the year in this exciting new medium. Here, we take a look at how the drama surrounding 3-D TV unfolded throughout 2010, and in particular the key announcements that impacted satellite players.
    The year certainly started with a bang with Discovery, DirecTV (with Panasonic) and ESPN making announcements in the first week of January planning to launch 3-D TV across the United States. Chuck Pagano, Executive Vice President, ESPN in one of his first interviews after ESPN announced plans to bring 3-D TV broadcasts to its customers was bullish about the potential take-up of 3-D TV across the United States. “Our first year strategy is doing 85 events. We are creating a 3-D network. We are doing events, rather than a 3-D channel. They will be sent to distributors (cable, satellite, telcos). I bet you in three years every new TV set will have 3D embedded into it. It is no different from HD in that sense,” said Pagano.
   However, while this represented an exciting launch for ESPN, it was not without its problems, as Pagano believed certain technology segments were caught off guard by the sudden rise of 3-D TV. He said in January, “No-one has got a stereoscopic production switcher on their catalogue. Standards converters are another segment. Routing switches are another area where there is a lack of equipment. MPEG are just getting their arms around 3-D. The MPEG industry forum just had their first 3-D meeting.”
    The momentum behind 3-D TV really did not waver throughout the year. Satellite operators remained at the forefront of developments. Operators such as SES and Eutelsat aimed to exploit new opportunities in this space. SES went about creating 3-D TV eco-systems to make things easier for broadcasters and DTH operators wanting to make the move to 3-D TV.
    Other broadcasters were also beginning to formulate their strategies in terms of 3-D TV. One such broadcaster was Discovery, which aimed to be one of the first non-sports broadcasters to bring the benefits of 3-D TV to its audience. John Honeycutt, Executive Vice President and Head of International Business Operations for Discovery Networks International (DNI) spoke to Satellite News at IBC about the broadcaster’s international aspirations for 3-D TV. “On a world-wide basis, we are talking to several people (about 3-D TV). I think the question really around this is what is the business opportunity for both of us, both for the distributor and the content provider. A lot of times in these conversations, it comes down to a particular situation, so where you in a carriage discussion, for example. Increasingly, if you look at VOD on a platform, if you can find someone that is generating revenues on a transactional basis, I would love to meet them. VOD, on the distributor side, has become a way, to develop a good customer experience, and create a good stickiness. From a content provider point of view, it gives them the opportunity to watch content, they may not otherwise have watched in a linear environment. It is a great sampling vehicle.
    He continued, “The measurement component of this has become more and more mature. If you look at VOD, which is generally free, it still has a huge amount of value. You look at 3-D, and it is the same thing. If you are a distributor in a highly competitive marketplace, 3-D presents an opportunity to differentiate. That is a valuable thing for them.”
In terms of which international markets may see a move to 3-D TV, Honeycutt said, “From an international perspective, the market places that are hot right now are predominantly Asia and Western Europe. Latin America and Eastern Europe are approaching 3-D more slowly. I think we are only now seeing HD in Eastern Europe, so that market is way too early for 3-D.”

Satellite Pay-TV Operators

By the end of 2010, a number of major satellite pay-TV operators had announced plans to launch dedicated 3-D TV channels. DirecTV (United States) and BSkyB (United Kingdom) pretty much led the way as expected, but what was perhaps a bigger surprise was the number of other operators that announced their plans in the latter part of 2010. In September, Sky Deutschland announced its plans to launch 3-D TV in Germany. The service launched in October. In October, Foxtel (Australia) announced the launch of Australia’s first dedicated 3-D TV channel. The channel launched Nov. 1 in Australia. BSkyB’s own dedicated 3-D TV channel, Sky 3-D launched with coverage of golf’s Ryder Cup. In Scandinavia, Modern Times Group (MTG)’s pay-TV subsidiary Viasat Broadcasting announced the launch of Viasat 3D, its 3-D TV service, in late December to bring 3-D TV to audiences across Scandinavia.
    In Eastern Europe, NTV+, the Russian pay-TV operator also launched a 3-D TV service. In terms of the reasons why the platform decided to launch a 3-D TV channel, Dimitry Samokhin, CEO, NTV+ told Satellite News, “The reason why we have launched a 3-D TV channel now is that the technology is now available at the customer level. We know 3-D TV sets are now being sold in Russia, so there is definitely an opportunity to tap into this. We have spent some time conducting a number of tests, so we can make the TV channel watchable in households. I think now we have gone past the point of it being just a technical experiment. The channel we have launched is a mixture between sports and movies.”
    In terms of how many have access to 3-D TV in Russia, Samokhin added, “We believe there around 4,000 3-D TVs that have been sold in Russia recently. I think a large amount of these people will be subscribers to NTV+. Our subscribers tend to be the ones that have the new stuff. I believe the sales growth will be quite positive.”
    BSkyB is also pushing 3-D TV aggressively in the United Kingdom. Brian Lenz, Director of Product Development, BSkyB, outlined to Satellite News what BSkyB needed to do in order to be successful in 3-D TV. “We have to make sure we have an approach and an operational model which produces quality all the time. That is on our side. We need to evangelize to the industry as a whole. The thing that will kill 3-D is if it done badly. If it is done well, we will have a good future ahead of us. If it is done poorly, it is not going to work. I think the other side on a day-to-day basis, it is about communication. We know the market gets a lot of different messages out there. There are a lot of different headlines around 3-D. We need to cut through the noise overall, and ultimately see 3-D. That is why we went to the pubs around. We need to make people understand the 3-D they see in cinema, they will see at home,” he said.
    In terms of the drivers for 3-D TV, Lenz added, “I think cinema is helping, and that will continue as long as you see great movies coming out. I think what we are doing will drive it, as well as blu-ray 3-D. I think what will different in this case compared to HD, is I think gaming will drive it a lot more. I think the gaming segment already has the options through the PS3 and Xbox to get stereo 3-D games. You have got plenty of different factors to drive the use of 3-D on that screen. Those who value those experiences right now will be willing to pay the premium.”

Research into 3-D TV

We also saw a lot of research into 3-D TV as analysts’ had to react quickly to this market and a number bought out research or related research on the subject. “We’re projecting that by the end of 2011, 13-15 dedicated 3-D channels will exist, worldwide Over the next five years, you will mainly see on-demand 3-D, PPV events in 3-D, and a few dedicated channels,” commented Anna Hunt, a research analyst at IMS Research.
    “We are being a bit cautious with our forecast for 3-D-ready TV sales.  We believe that the market will grow, but TV manufacturers are placing the technology in TVs without having a pull from consumers at this point,” said Jason Blackwell, senior analyst, ABI Research. “By 2015, 3-D TV will reach about 18 percent penetration of worldwide flat panel TV sales. In markets like North America and Western Europe penetration will exceed 20 percent of flat panel TV sales.”
   ESPN itself carried out a major research study after its first 3-D TV broadcasts in 2010. ESPN’s research was compiled from more than 1,000 testing sessions and 2,700 lab hours. The study confirmed that there appeared “to be an acclimation effect whereby participants adjust to 3-D over time under normal use”. The study said that enjoyment of the experience as well as presence went up. Interestingly, 3-D ads produced “significantly higher scores across all ad performance metrics”. The study said that on average, “purchase intent increased from 49 percent to 83 percent” and ad liking went from 67 percent to 84 percent.
    Artie Bulgrin, Senior VP, Research & Sales Development, ESPN Research + Analytics told Satellite News that 3-D TV bought greater levels of intensity from its audience, “There is clearly an enhancement and benefit in terms of the presence that the audience has in the content. It is clearly elevated. It is presence that has really moved up from what we have seen when doing the World Cup. That I think is significant in terms of the future of this medium. People feel like they feel more like they are there. Being in the sports business, there is absolutely what we want to succeed in doing,” he said.
   In terms of its key findings on the production side, and in particularly what it learnt through its coverage of the 2010 World Cup in South Africa, Bulgrin added, “The distance shots during the World Cup were less impactful than the onfield shots done from corner kicks for example. So, not only did those resonate more because they had more depth. But, they were shot a lot closer. They came off as being more spectacular. During our testing in Houston, and our users went through the lab experience, those were the kind of the shots that people remembered.  People think those low level shorts are spectacular. Over time, as we evaluate other sports, we will look at which shots have the most impact. We are learning and evolving.”

2011

2011 could be the year when 3-D TV establishes itself even more in some markets. In many ways, it is hard to predict just how customers around the world will take to 3-D TV, and whether many will be prepared to invest even more (and potentially discard their HD sets) to have 3-D TV enabled hardware. What is key is that 3-D TV is done well. It is a steep learning curve and it is likely to be events based TV. The satellite industry will likely play a vital role in underpinning this industry, from providing the capacity, to providing the right infrastructures to enable this technology to make the most of its potential. Satellite pay-TV operators throughout 2010 made announcements about launching 3-D TV. 2011 should provide some indications and just how successful these efforts have been.