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Has digital cinema finally found its killer app?

Filmless movie projection has been lurking just around the corner for nearly a decade, while movie studios and theater owners have bickered over the cost of scrapping the old projectors and installing the new. Now, for the first time, there’s a sign that moviegoers are willing to walk past a conventional movie theater and line up for a digitally projected movie -- at higher ticket prices, yet.

The unlikely herald is Disney’s computer-animated “Chicken Little,” which received atrocious reviews before its Nov. 4 opening, but has been packing ‘em in at digital 3-D presentations around the country.

The film grossed about $11,000 per screen at conventional theaters during its first weekend, but $25,000 per screen at more than 80 locations showing the 3-D version. The difference can’t be accounted for by the extra $1 to $1.50 some 3-D theaters tacked onto admission prices, and if it held up this past weekend, the excitement in the digital-cinema community will be palpable. Unconfirmed reports are already swirling that several blockbuster 3-D features are heading our way, including Peter Jackson’s remake of “King Kong.”

3-D backers say that the technology is snazzy enough to overcome the main obstacle to a nationwide rollout of digital projection -- theater owners’ doubts that it will be enough of an audience-pleaser to justify the $150,000 conversion cost per screen.

This isn’t your father’s 3-D, the novelty that turned B movies like 1952’s “Bwana Devil” into objects of enduring mockery. It dispenses with the traditional red-and-green glasses in favor of polarized spectacles, which are supposed to eliminate the eyestrain that cursed old-style 3-D. The jitterless image produced by digital projectors can make the 3-D effect especially striking.

Two Southern California companies, In-Three Inc. and Real D, are leading the 3-D revival. Agoura Hills-based In-Three specializes in converting 2-D images to 3-D, a process it calls dimensionalization. Lucasfilm Ltd. has hired In-Three for the 3-D conversion of the “Star Wars” movies for a new cycle of releases starting in May 2007, the 30th anniversary of the original’s premiere. The company says it has so much business now that it has expanded its workforce tenfold to about 150 and is moving into a 40,000-square-foot production complex.

“We’ve been telling people forever that 3-D is digital’s killer app,” says Gary Friedman, the company’s vice president for corporate development.

In-Three founder Michael C. Kaye is a 3-D photography aficionado and former post-production executive. For years, he says, 3-D’s potential as a selling point for digital cinema eluded the studios and even Texas Instruments Inc., which manufactures the industry-leading digital cinema technology.

“We told TI that people didn’t know their projectors could do 3-D,” Kaye recalls. “And TI told us they didn’t think 3-D would sell digital projectors.”

The dime dropped after a 3-D Imax version of “The Polar Express” became a big hit last year. In March, Disney gave Lucasfilm’s Industrial Light & Magic a 104-day crash deadline to extract a 3-D image from the already completed 2-D “Chicken Little.” Meanwhile, it hired Beverly Hills-based Real D, which owns proprietary 3-D projection technology, to install the hardware in 88 North American theaters.

For Real D, the contract was the first step in what it hopes will be a nationwide conversion. “Our business model is not a niche, but to enable every multiplex,” says co-founder Michael V. Lewis, whose resume includes the production of two 3-D Imax features in the 1990s.

Theater owners, a notoriously wary bunch when it comes to new technologies, aren’t yet proclaiming the dawn of the 3-D era.

“It’s nice value added,” John Fithian, president of the National Assn. of Theatre Owners, told me, choosing his words carefully. He scoffs at the contention of some 3-D mavens that the digital process will turn 2-D movies into historical artifacts like silent pictures. 3-D waves have come and passed in Hollywood since the ‘30s, and no one knows whether this one will be any different. “As a technical proposition it is way cool,” he says. “As an economic proposition it clearly doesn’t work everywhere.” Real D’s system effectively adds as much as $50,000 to the per-screen cost of digital conversion.

Fithian says that the driver of digital expansion is still likely to be pure economics. The recent emergence of third-party financing schemes through which the studios will shoulder most of the conversion cost over time is a more important breakthrough than 3-D, he says.

Another big question is whether Hollywood will treat the new 3-D tools with appropriate respect. If filmmakers use 3-D merely to rescue lousy scripts, the public could grow just as jaded with the new technology as it is with the current surfeit of exploding helicopters on screen. There’s talk in the industry that Disney’s hasty conversion of “Chicken Little” had something to do with its underwhelming buzz.

3-D backers understand that it will be lethal for their technology to be seen as a mere gimmick, or for audiences to read a 3-D marketing campaign as a signal that the underlying movie is a turkey.

“There needs to be a real high-quality product out there unlike what’s been seen before,” Kaye says.

Lewis echoes that sentiment. “We’re waiting for the ‘Citizen Kane’ of the medium,” he says. Still, he firmly believes that once digital 3-D takes hold, audiences will never go back.

“We don’t think this is a novelty at all,” he says. “We think it’s as fundamental as color and sound.”

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Golden State appears every Monday and Thursday. You can reach Michael Hiltzik at golden.state@latimes.com and view his weblog at latimes.com

/goldenstateblog.