Men In Black 3 opens Friday and it’ll be on plenty of 3D screens despite disagreement between exhibitors and Sony Pictures Entertainment over who should pay for 3D glasses. Movie studios have been footing the bill for the glasses but Sony’s announcement last year that it would end payments with the release of MIB3 rankled major exhibitors. As discussions continue neither side is budging — at least publicly. Sony is keeping quiet but Bloomberg reports that executives from Regal Cinemas and Cinemark have said they won’t give in, and the National Association of Theatre Owners indicates nothing has changed on either side. The movie is obviously booked into theaters in 3D and 2D because as the saying goes, the show must go on. So will that surcharge for 3D tickets, which theaters and studios split as they do regular ticket prices. Meanwhile negotiations continue although Sony has already made clear it doesn’t intend to continue paying for the glasses indefinitely.
UPDATE, 6:40 AM: CEO Alan Stock made his comment in a conference call with analysts who asked what he’d do if Sony continues with its plan to stop paying for 3D glasses — leaving it to exhibitors to manage the expense. ”We think the way the glasses model works in the U.S. is a great way to work it,” he said. He added that there’s still a lot of time to negotiate before next summer, when Sony wants the change to take place. “I’m pretty confident we can work out a solution,” Stock says. “If we can’t, we’ll have to head in a different direction.” Regarding Universal’s plan, which it canceled, to show Tower Heist on cable VOD just three weeks after opening in theaters, Stock says the studio “thought they had something the exhibitors would comply with.” After Cinemark threatened to boycott the film, “there hasn’t been any further discussion of that particular test, or anything else they’re working on.”
The after-hours trades gave up the 9.5% gain in RealD shares on Wednesday before the market closed. And the strange thing is that earnings for fiscal 2Q were way ahead of forecasts: The 3D movie technology company had net income of $19.2M, up from a $4.2M loss in the period last year, on revenues of $88M, up 34.7%. The earnings, at 33 cents a share, compare to the Street’s forecast of 22 cents. But investors also expected revenues to come in at $94.4M. Fiscal 3Q could be worse: RealD says that only eight 3D films will be out in the quarter vs nine last year, including six that had domestic box office sales of more than $100M. Samsung’s decision not to make LCD screens for RealD’s 3D TV technology could be a big blow to its home entertainment ambitions. CEO Michael Lewis says that RealD now is ”pursuing other potential partners.” Samsung ”had a recent management change, reviewed all their projects and decided not to go forward with the RealD technology at the moment,” Lewis said. “We’re still bullish on the technology… despite the headwinds we encountered recently.”
RealD isn’t taking sides in the fight between Sony and exhibitors over who should pay for 3D glasses. “We are confident that the industry will reach a resolution” that benefits everyone, Lewis says. Meanwhile he defended RealD’s technology, saying that it offered “twice the brightness of our competitors.” He says that some studios including DreamWorks Animation and Relativity are …
UPDATE, 1:30 PM: A Sony spokesman has just responded to NATO’s letter from this morning, essentially saying there has never been an agreement about who bears what costs for in the 3D biz — but we can talk about it anyway.
NATO’s statement that it has been “understood” that distributors would always bear the cost of 3D glasses is incorrect, because there never has been any such agreement. In fact, we have been speaking with people in the industry for a long time about the need to move to a new model, so this certainly comes as a surprise to no one in the business.
We invite theater owners to engage in a collegial dialogue with us about this issue, including at ShowEast next month. By working together on a business-to-business basis, we are confident a reasonable solution can be reached that brings benefits to consumers, the entertainment industry and the environment.
PREVIOUS, 10:36 AM: The National Association of Theatre Owners has lashed back at Sony for the studio’s recent decision to stop providing 3D glasses to moviegoers. It’s not sitting well with the exhibitors’ group, which contends that there is an understanding that theaters would pay for the tech upgrades to their facilities and distributors would provide the glasses — NATO says any shift to that model is at least worth a phone call to discuss. Not to mention that if exhibition won’t absorb the cost, those who already have to cough up for premium-priced tickets to 3D movies will have to. Here’s the group’s statement; expect Sony to have a reply shortly.