Consumers frustrated at paying an extra $3 for 3-D movies may have to shell out even more money next year — just to see them.
A rift between Hollywood studios and theater chains over who should foot the bill for 3-D glasses erupted publicly Wednesday after exhibitors lashed out at Sony Pictures’ plan to stop covering those costs starting in May. The nation’s largest cinema operator, Regal Entertainment Group, threatened to not play certain movies in retaliation.
At least one other studio said it was also considering revisiting its policy on 3-D glasses. Several others privately said they were hoping Sony would prevail and, if so, would take similar action to reduce their costs of releasing 3-D movies.
Sony’s controversial move comes as consumers have become more selective about the films for which they are willing to pay a premium to see images pop out of the screen. Several event movies this summer did surprisingly little of their business in 3-D, including “Pirates of the Caribbean: On Stranger Tides” and “Green Lantern.”
But the surprise success of the recent 3-D re-release of 1994 blockbuster “The Lion King” — which has grossed $65 million in 21/2 weeks — shows the public is willing to open its wallet for the right picture.
Sony sent a recent letter to exhibitors informing them that as of May 1, 2012, it will no longer pay 3-D technology companies such as RealD the average cost of 45 cents per ticket for 3-D glasses used by moviegoers. Sony has two major 3-D movies coming out after May 1 next year: “Men in Black III” and “The Amazing Spider-Man.”
Such costs can add up to more than $10 million for particularly popular films.
Instead, Sony wants theaters to follow a policy that’s already common in other parts of the world: having consumers pay for their own disposable 3-D glasses, either to rent for each movie or to own a pair they can take home. Such a cost would come on top of the roughly $3 surcharge moviegoers already pay for each 3-D movie ticket.
After news of the letter surfaced Tuesday in industry trade publication the Hollywood Reporter, exhibitors fired back the next morning with a public letter from the National Assn. of Theatre Owners. “NATO believes Sony’s suggestion is insensitive to our patrons, particularly in the midst of continuing economic distress,” the letter said. “Sony’s actions raise serious concerns for our members who believe that provision of 3D glasses to patrons is well established as part of the 3D experience.”
Regal Chief Executive Amy Miles issued a statement saying her chain might not show movies in 3-D for which it was forced to bear the cost of glasses.
A Sony spokesman responded that there has never been any agreement on who would pay for 3-D glasses and that studio representatives “have been speaking with people in the industry for a long time about the need to move to a new model.”
In its letter, a copy of which was obtained by The Times, Sony Pictures Releasing President Jim Amos said it is not the studio’s role as a movie maker to continue subsidizing the cost of glasses, suggesting instead that theaters encourage consumers to buy them. Another reason left unsaid by Sony but cited privately by several Hollywood executives is that studios have already spent tens of millions of dollars to subsidize the installation of 3-D projection equipment in theaters.
Bruce Snyder, president of domestic distribution for 20th Century Fox, told The Times, “I am revisiting this issue as well.” Fox was the first to try to stop paying for 3-D glasses, in summer 2009, but backed down when no other studios supported its decision. Warner Bros. Domestic Distribution President Dan Fellman said, “Right now, I’m comfortable with where we are,” but added, “If the marketplace were to change, obviously we would turn on a dime.”
Other studio executives declined to discuss the issue publicly, but people familiar with their thinking indicated that they would be happy to see Sony stop underwriting the cost of 3-D glasses — as all movie companies are looking for ways to reduce spending in response to plummeting DVD revenue.
The dust-up comes as relations between Hollywood and exhibitors are already frayed after a spat concerning studios’ tests this year of “premium video-on-demand,” through which consumers could pay $30 to rent a movie only 60 days after it debuts in theaters.
RealD, which provides most of the 3-D glasses used domestically, said it is staying out of the debate. “We are confident that studios and exhibitors will work together to find an appropriate resolution for all parties,” said Rick Heineman, senior vice president of marketing communications at RealD.
Who bears the expense of 3-D glasses varies in different foreign theatrical markets, Heineman said. In Latin America, as in the U.S., the studios pay, while in Europe, 3-D glasses are a separate concession item that moviegoers buy. In some theaters in China, moviegoers rent the glasses in exchange for a refundable deposit.
It’s in RealD’s interest to help broker a compromise, said Richard Greenfield, a media analyst with BTIG.
In 2012, studios plan to release more than 35 movies in 3-D, but they may start backing away from the format.
“Certain movies are doing well in 3-D and others failing terribly,” Greenfield said. “People are getting a lot choosier. I would be surprised if in 2013 and 2014 we didn’t see a more reduced slate that focuses on the films that deserve it.”