This research paper answers the question of whether 3D TV will become a new trend or if it is a hype that will eventually fail to establish itself.
The paper is divided into a market research and a target group research. Both deal with the situation within the United States as the US has one of the highest market shares in 3D globally.
3D TV was introduced in 2010 and within that year the 3D TV sales made out 4% (3.2mio) of all TV sales. Within the US, 3% of the households purchased a 3D TV so far. According to E. Rogers’ book “Diffusion of Innovation” whose theory is used as a guideline throughout the whole research paper, those 3% make out the category of innovators.
The 3D TV technology has to face economic, sociological and technological challenges. Those challenges as well as the trends and developments influence the adoption of the technology. Those influencing aspects can be grouped into five categories: relative advantage, compatibility, complexibility, observability and trialability.
The research determines how the different aspects concerning the 3D technology influence these categories in order to come up with possible forecast of 3D TV.
The relative advantage is mainly influenced by the target group’s perception of 3D TV. While 3D TV aims to add an experience domain to the traditional experience of 2D TV, this is not especially valued among the target group. The price of 3D TV sets however does play a significant role – many consider the prices of 3D as too high. However the experience teaches that the prices are likely to decrease due to the price setting strategy called “price-skimming”.
The most important factor concerning compatibility is the unfavorable launch-date of 3D TVs in the US. On the positive side, the increased production of 3D content that fits the target group’s profile makes 3D perfectly compatible with the target group’s values.
Though 3D TV is a rather complex technology, especially in this time now that there is new technology developed all the time, creating an information jungle.
In the end and compared with the target group research, it seems as if the 3D TV technology will actually make it and become a new trend.
CONTENT
EXECUTIVE SUMMARY
MANAGEMENT SAMENVATTING
PREAMBLE
LIST OF ABBREVIATIONS
INTRODUCTION
Problem Statement & Main question
Research Questions
METHODOLOGY
Data used
Tertiary Information
Secondary information
Primary information
Constraints and Limitations
Budget
Constant changes in the sector
PART 1 -DESK-RESEARCH
RESULTS
What is 3D TV?
How is the 3D effect created?
3D - from 1838 to 2010
3D Costs and Revenues
The extra value of 3D
What is the market position of 3D TV in the US?
Consumer’s attitude towards 3D
The Challenges of 3D TV
Economic challenges
Technological challenges
Sociological challenges
Trends and Development of the 3D TV market
3D Content
3D TVs
Prices
3D Glasses
3D online streaming
How does the consumer-adoption-process work?
ANALYSIS
Relative Advantage
Compatibility
Complexibility
Trialability/Observability
CONCLUSION
PART 2 - TARGET GROUP RESEARCH
RESEARCH DESIGN & METHODOLOGY
Problem Statement
Target Group
Sample Size
Adjustment of the sample size
Topics
The Future of 3D TV - Bachelor Dissertation by Anita Theis
Research Questions
Decisions of making the questionnaire
Testing of the questionnaire
Fieldwork
Online survey
Paper Version
Process of the fieldwork
Determining data
Control of the fieldwork
Control with the help of accessible data
Bias
RESULTS
Research Question 1 - How are the innovators of the 3D TV technology characterized?
Research Question 2 - What is the target group ’ s TV viewing behavior and how affiliated are they with
new technology of the TV market?
Research Question 3 - What is the target group ’ s perception towards 3D TV?
Research Question 4 - How educated is the target group about 3DTV?
Research Question 5 - What are the obstacles to adapt to 3D TV?
ANALYSIS
Analysis of the research questions
How are the innovators of the 3D TV technology characterized?
What’s the target group’s TV viewing behavior & how are they affiliated with the technology in the TV market?
What is the target group’s perception towards 3D TV?
How educated is the target group about 3D TV?
What are the obstacles to adapt to 3D TV?
How does the target group ’ s perception towards 3D TV influence the adoption rate of 3D TV?
Relative Advantage
Compatibility
Complexity
Trialability/Observability
PART 3 - CONCLUSION & DISCUSSION
EXPLANATORY NOTES
SOURCES
APPENDIX I
Appendix 1 - Graphics
Appendix 2 - Questionnaire
EXECUTIVE SUMMARY
This research paper answers the question of whether 3D TV will become a new trend or if it is a hype that will eventually fail to establish itself.
The paper is divided into a market research and a target group research. Both deal with the situation within the United States as the US has one of the highest market shares in 3D globally.
3D TV was introduced in 2010 and within that year the 3D TV sales made out 4% (3.2mio) of all TV sales. Within the US, 3% of the households purchased a 3D TV so far. According to E. Rogers’ book “Diffusion of Innovation” whose theory is used as a guideline throughout the whole research paper, those 3% make out the category of innovators.
In order to reach out to other categories of the adopter categorization as well, the 3D TV technology has to face economic, sociological and technological challenges. Those challenges as well as the trends and developments influence the adoption of the technology. Those influencing aspects can be grouped into five categories: relative advantage, compatibility, complexibility, observability and trialability.
The research determines how the different aspects concerning the 3D technology influence these categories in order to come up with possible forecast of 3D TV.
The relative advantage is mainly influenced by the target group’s perception of 3D TV. While 3D TV aims to add an experience domain to the traditional experience of 2D TV, this is not especially valued among the target group. The price of 3D TV sets however does play a significant role - many consider the prices of 3D as too high. However the experience teaches that the prices are likely to decrease due to the price setting strategy called “price-skimming”.
The most important factor concerning compatibility is the unfavorable launch-date of 3D TVs in the US. In 2010 most people have just bought an HDTV and now are satisfied with the technology they have and do not see any reason to buy a new TV any time soon. Other factors influencing the compatibility are the need to wear glasses, which are expensive and uncomfortable. Also the digital revolution plays a role - TVs in general lose their influence while computers with the help of internet have the role of a multi-media device that makes TVs redundant. On the positive side, the increased production of 3D content that fits the target group’s profile makes 3D perfectly compatible with the target group’s values.
Though 3D TV is a rather complex technology, especially a this time now that there is new technology developed all the time, creating an information jungle - the target group research shows that the target group is surprisingly well educated about the technology and that this education positively influences the perception towards 3D TV.
Trialability/Observability - those two categories are grouped together within the research. Outside of the movie theaters, the trialability/observability is pretty limited . However there is a positive correlation between trialability/observability and the perception towards 3D. That shows that the people that actually have the chance to watch 3D at some place do like it and have an increased probability to purchase a 3D TV.
In the end and compared with the target group research, it seems as if the 3D TV technology will actually make it and become a new trend.
MANAGEMENT SAMENVATTING
Deze onderzoeksscriptie geeft antwoord op de vraag óf 3D TV een nieuwe trend zal worden of óf het maar een hype is, die zich niet door kan zetten.
De scriptie is opgedeeld in een marktonderzoek en een doelgroeponderzoek. Allebij gaan over de situatie binnen de Verenigde Staaten, omdat de VS globaal gezien een van de hoogste marktaandelen aan 3D heeft.
3D werd in 2010 geïntroduceerd en binnen dit jaar maakte de verkoop van 3D TVs met een totaal van 3.2miljoen verkochte toestelen, 4% van de hele TV verkopen uit. Binnen de VS hebben er tot zo ver 3% van alle huishouden een 3D toestel gekocht. Volgens E. Roger’s boek “Diffusion of Innovations”, diens theorie werd gebruikt als een leidraad door de hele scriptie heen, behoren deze 3% bij de categorie van innovatoren.
Om ook verdere categorieën te bereiken heeft de 3D technologie met economische, sociale en technologische uitdagingen te maken. Deze uitdagingen zowel als de trends and ontwikkelingen beïnvloeden de adoptie van de 3D technologie. Deze aspecten kunnen onderdeeld worden in vijf verschillende categorieën: relatief voordeel, compatibiliteit, complexiteit, observability and trialability.
De onderzoeksscriptie bepaald hoe de verschillende aspecten m.b.t. de 3D technologie deze categorieën beinvloeden om dan een mogelijke forecast op te zetten.
Het relatief voordeel wordt vooral door de perceptie van de doelgroep beïnvloed. Terwijl 3D TV het doel heeft om een nieuwe belevenis domain aan de traditionele 2D belevenis bij te voegen, wordt dit maar niet echt van de doelgroep gewaardeerd. Wat wél een belangrijke punt is, is de prijs: sommigen vinden de prijs van een 3D toestel té hoog. Maar de ervaring zegt wél, dat de prijs hoogst-waarschijnlijk nog zal vallen om een breder doelgroep aan te spreken.
Het belangrijkste aspect m.b.t. de compatibiliteit was het ongunstige introductie datum van 3D TVs in the VS. Omdat vóór de introductie van 3D TVs de meeste mensen nét een HDTV hebben gekocht zijn ze nu eigenlijk al tevreden met de technologie die ze in huis hebben en zijn dus niet van plan om straks weer een nieuwe TV te gaan kopen. Andere aspecten zijn b.v. de brillen die je moet dragen om 3D te kunnen zien. Ze worden van de doelgroep als te duur en te oncomfortabel aangezien.
Ook de digitale revolutie speelt er een rol bij. Over het algemeen verliezt TV meer en meer aan invloed omdat de computers de rol van een multimediale toestel hebbe gekregenn en daardoor TVs overbodig maken. Positief is wel dat er meer en meer 3D filmen en shows worden geproduceerd die bij het profiel van de innovatoen passen.
Ook al is 3D TV een relatief complexe technologie, de doelgroep schijnt wel goed op de hoogte van te zijn wat er op de markt is, en wat ze ermee kunnen doen. Dit beïinvloedt de perceptie van de doelgroep positief.
Trialability/Observability - binnen dit onderzoek worden deze twee categorieën samengevoegd. Afgezien van de mogelijkheden m.b.t. de bioscopen, is de level van trialability/observability relatief laag. Maar er is een positieve correlatie tussen de trialability/observability en de perceptie tegenover 3D. Gebruikers die erop staat zijn om ergens naar 3D te kijken hebben een hogere waarschijnlijkheid om ook over te gaan narar hun eigen 3D toestel.
Uiteindelijk schijnt het dat 3D op een goede weg is om een nieuwe trend te worden.
PREAMBLE
This bachelor dissertation makes out the last part of my undergraduate studies in Media and Entertainment Management at Stenden University of Applied Sciences in Leeuwarden, The Netherlands. It was written between February and June 2011 in Washington, DC where I have been working as a production assistant for Story House Productions, Inc. from July 2010 to June 2011. The first real-life project I worked on during that time had been a documentary for Discovery Channel & 3net which was produced in both 2D and 3D. The chance to be part of such an innovative team had been an incredible experience for me, which was why I decided to dedicate my bachelor dissertation to this topic - 3D TV.
Now as I am about to finish this study course I want to say thank you to everyone who supported me during my studies and especially throughout the last year.
I want to thank the whole Story House Productions team for giving me the great opportunity to work for them and for all the knowledge and competences I’ve gained during that time.
Especially I want to thank Julia Kelbling - for everything you taught me and the chances you gave me to prove myself. Working with you was a blast and a great experience!
Thomas Sassenberg - for supporting me in writing this dissertation.
Also special thanks to Carsten Obländer, Uwe Klimmeck, Stephan Kießling and Christin Brunkhorst.
I had a great time and I am leaving the States with a lot of good memories.
I also want to thank Mr. Alastair Wright, my great mentor throughout the past year. Your feedback and input were always helpful - not only for writing this dissertation but also throughout my internship.
And obviously I would not be where I am right now, if it wasn’t for my family and friends, who supported me all the time and contributed a lot to this dissertation as well:
Katharina Osterholt - for not only being a great friend during hard times, but also for the knowledge you have shared with me, especially in the field of statistics and your continuous motivation.
James P. Tanabe - for proofreading my dissertation, your feedback, your motivation, your belief in me and your great friendship.
And last but not least, I want to thank the whole Starbucks Crew from Glover Park that not only provided me with freshly brewed coffee from sunrise to sunset every day but also for providing me a space to work on my dissertation and the friendship we’ve developed during that time.
There are a lot more people that supported me in different - without out you I wouldn’t be here. I want to thank everyone who believed in me - even at times when I did not.
Anita Theis
Glottertal, June 14, 2011
LIST OF ABBREVIATIONS
Abbildung in dieser Leseprobe nicht enthalten
INTRODUCTION
The 3D technology is almost as old as the movie theaters and was invented by Charles Wheatstone in 1838. His discovery was followed by the production of the very first 3D movies in 1922 (Zone, 2007, p1). But despite of its early invention this technology had to go through a lot of ups and downs, changes and improvements for almost 90 years, before it made its debut to where TV established itself in the 1920s: the consumers’ living rooms.
2010 was the year in which the third dimension was introduced to private homes and has not been restricted to the movie theaters anymore (“An introduction to 3D Television”, 2010). Today, in 2011, the 3D technology is improved continuously in order to satisfy the consumer. But that does not make it easier to introduce it to the target group: Constant changes and developments create an information jungle for the consumer who therefore lacks the knowledge to make a well-informed decision about adopting to the technology. Because of that the danger is that 3D TV will fail to reach out to the broad mass.
PROBLEM STATEMENT & MAIN QUESTION
The major TV manufacturers such as Sony, Samsung, Panasonic or Toshiba introduced their first 3D TV sets in early 2010 reaching out to a global target group.
By the end of 2010, studies conducted by the Nielsen Company and Renub Research showed that only 2% of the US citizens have bought a 3D TV - globally a total of approximately 3.2 million 3D TV sets were sold, making out 4% of all TV sales in 2010.
The forecasts of 3D TV have been very ambivalent throughout: While some predictions expect 3D TV to become a major success for the entertainment industry and the new standard in the consumers’ living rooms within the next three to five years, other studies however conclude that the introduction of 3D TV had been too early and call it a hype that soon will be forgotten.
By taking the theory about diffusion of innovation into account, it seems the 3D TV technology has only been adapted by the category of innovators so far - the first 2.5% of people that adapt to a new product or technology. Several different reasons could account for the slow adoption rate: from the consumer’s perception of 3D TV to the challenges that this new market has to face.
At the same time however, the investment into 3D TV is high for both TV manufacturers as well as 3D content providers. Their challenge is to increase the adoption and reach out to a broader target group in order to turn 3D TV into a successful new niche product that has the chance to become a new trend and a new standard.
The key to success lies in the consumer - only if they are convinced of the new technology they be triggered to adapt to it.
This research is therefore determined to find an answer to the question of whether or not 3D TV will be able to increase its adoption among the target group and therefore become successful within the next 3 to 5 years.
This research is basically divided into two parts: Part 1 consists of an in-depth market and desk research of 3D TV and includes the challenges, trends and developments of this technology. Part
2 consists of a target group research that carrier the assumptions and conclusions of the market research part further and tests those on the target group directly. The results of both research parts then together will be able to answer the main question.
RESEARCH QUESTIONS
Several research questions were set up in order to find an answer to the main question of this research.
Part 1:
1. What is 3D TV?
2. What is the extra value of 3D TV?
3. What is the market position of 3D TV as of early 2011 in the United States of America?
4. What are the challenges of 3D TV?
5. What are the trends and developments of 3D TV up to Qt1 2011 worldwide and with a special focus on the US?
6. How does the adoption process of a new technology usually progress and how did the adoption process of the 3D TV technology progress in the US since its introduction in 2010?
Part 2:
7. How does the target group’s perception towards 3D TV influence the adoption rate of 3D TV?
JUSTIFICATION OF RESEARCH
This research provides an in-depth insight into the market situation of 3D television and both its challenges and developments. This is complemented by a target group research about the consumer’s perception of 3D TV and the possibilities of increasing the adoption of this innovation. By providing insight into different studies that have been conducted about 3D TV, this research paper unravels all the available information and puts them into a new light to give an indication whether 3D TV will make its way to ubiquity or oblivion.
Everett M. Rogers (Diffusion of Innovation, 2003, 5th ed.) defined five characteristics that influence the adoption rate of an innovation. Based on his book, this dissertation determines in how far those characteristics favor or disfavor the adoption process of 3D TV and how current trends and developments within the 3D TV sector might improve this process. These conclusions are then used in a target group research in order to determine whether they are feasible and will lead to a higher adoption rate of the technology within the next 3 to 5 years.
In this regard, this research paper can act as a guide for both TV manufacturers and TV content producers that invest or plan to invest into 3D TV.
However, the main purpose of this paper is to become the starting point for marketing managers of those companies that already have their stakes in 3D technology; this research gives insight into how the adoption process can be improved and therefore it can be used as a foundation of a successful marketing plan.
METHODOLOGY
DATA USED
This research dissertation is based on primary, secondary and tertiary data.
TERTIARY INFORMATION
Tertiary information that is for this dissertation are databases such as LexisNexis and summaries of papers or market researches, when the access to the full information had been limited or restricted due to the costs of such an access.
SECONDARY INFORMATION
The first research part consists of thoroughly researched information that was found in both print media and online media, accessible for a low or small budget and which was then analyzed in the light of the problem statement and main question of the paper. This information consists of up-to-date sources about 3D TV as well as theory of marketing, strategy and economy. Additionally, results of research e.g. MarketSearch, DisplaySearch and Nielsen were taken into account as secondary data.
PRIMARY INFORMATION
After the analysis of tertiary and secondary data, primary information for the second part of this paper was gathered by conducting a survey among the target group. By gathering primary information, it became possible to get results that exactly match the problem statement of the research. A detailed explanation of the methodology used for the target group research can be found in part 2 of this research paper.
CONSTRAINTS AND LIMITATIONS
Several limitations and constraints should be taken into consideration when reading through this research study.
BUDGET
This is a fully independent and non-financed research. There has been no budget available in order to conduct the research. However, the access to publicly available papers by market research companies cost between $1,500 and $10,500. As it has therefore been impossible to gain full access to those papers, this research relies to some extent on summaries of the above mentioned studies instead of official data.
CONSTANT CHANGES IN THE SECTOR
As 3D TV is a relatively new technology which is going through a lot of developments and changes, new information might have been released during the time this research was set up, conducted and analyzed. Though this research paper aims to give insight into the latest developments of 3D TV, some of the information laid out might not be up-to-date anymore at the time the paper is published. All information has been taken into account as of March 2011.
PART 1 -DESK-RESEARCH
RESULTS
The following chapter will answer the research questions of part 1 of the research.
WHAT IS 3D TV?
HOW IS THE 3D EFFECT CREATED?
3D refers to anything that has height, width and depth. The human eye itself however sees only height and width - 2D. The reason that we experience the surrounding world with a 3D effect is due to our brain. The human’s eyes are about 2.5’’ (6.5cm) apart from each other, so that each of the two eyes sees an object from a slightly different angle at all times (Koninklijke Philips Electronics N.V. [Philips], “What is 3D?”). The brain takes those two images and processes what we see into a 3D view: a 2D world with depth as an added dimension.
Modern 3D technology tries to achieve the same effect by showing two separate images, one to each eye at a time. By converting those two images together such as in “real life”, the brain creates the 3D effect for us. This is called stereoscopic 3D (Media College, “What is 3D?”.) and is often referred to as the “real 3D”, because there are also different ways to create 3D effects synthetically.
3D - FROM 1838 TO 2010
After the discovery of 3D by Charles Wheatstone in 1838, different feature films for 3D were developed with a major emphasis on the gimmicks that this new technology offered, for example objects that seem to fly towards the audience (Zone, 2009, p.1). But the 3D technology experienced its first real boom when more than 50 3D movies were produced between 1952 and 1955. The second boom of 3D occurred in 2005 with the release of the first digital projected 3D movie “Chicken Little 3-D”. But a new milestone in the history of 3D movies and a breakthrough of this technology occurred with the launch of James Cameron’s blockbuster “Avatar” (Sander, 2009) - the most successful movie in history. It even surpassed Titanic which held this position since 1997 (Box Office Mojo, “All Time Box Office - Worldwide Grosses”).
The booms of 3D movies in the 1950s and around 2000 had a specific reason: the everlasting competition between the movie theaters and home TVs (Mendiburu, 2009):
In the 1950s and 1960s a major development for TVs was when color TV sets were introduced globally, turning TV into the major competitor for the traditional movie theaters. People started to value watching TV at home more than going to expensive movie theaters. In order to gain back their market share, the theaters therefore had to come up with a new competitive advantage: the 3D technology (Mendiburu, 2009, p6-7). Back in the 50s and 60s, the 3D technology has obviously not been fully developed yet and 3D was shown in color anaglyph, requiring the audience to wear the well-known red/cyan or red/blue plastic glasses. Nevertheless - it created new revenues and the cinemas were once again filled with a huge audience. But the appearance of the Digital Revolution changed the TV sector once again: home entertainment, video-on-demand and file sharing became another stroke in the competition between TVs and cinemas. Those developments in home entertainment gave the consumer the freedom to watch whatever he liked whenever he wanted to. This resulted in a decrease of revenues for the cinemas once again and built the basis for the need invest into the production of a new generation of 3D which eventually lead to the next boom of 3D. A lot of money was invested for the production of new and better technology with the aim to create a better experience and an added value for the consumers.
3D COSTS AND REVENUES
3D in the cinemas stands for “Dollars, Dollars, Dollars”: During opening weekends, a 3D movie makes three times the revenue of a 2D movie. But yet, all 3D movies that are released need a supplementary 2D version in order to pay for the costs. So far there are not enough 3D capable theaters in order to pay for all the costs (Mendiburu, 2009, p4).
THE EXTRA VALUE OF 3D
Any new technology, product or service on the market should have at least one relative advantage to other similar products/services/technology in order to attract customers. The same goes also for the 3D TV technology. This paragraph unravels the unique selling point (USP) of the new 3D TVs.
Not only does 3D add depth as a third dimension to the TV experience - but by imitating the natural vision of the human eyes, 3D increases the immersion of the audiences and therefore positively improves the affect of identification and projection. By providing 3D images to the consumer, less brain activity is necessary. This results in a more immerged audience that can enjoy more of the TV watching activity (Mendiburu, 2009).
There are four experience domains described by Pine and Gilmore, differentiated by two variables: the degree of participation (passive or active) and the consumer’s relation to the environment (absorption or immersion). An experience belongs to at least one of these domains but is considered to be stronger and more valuable if it consists of more than just one domain (Nijs & Peters, 2006).
The four domains are:
1. Entertainment
2. Educational
3. Esthetic
4. Escapist
(Pine & Gilmore. 1999, p 30 - for the graphic please refer to graphic 5 in appendix 1)
Usually, watching TV is an activity in which the consumer absorbs the movie passively - which is why watching TV is considered to belong to the domain of Entertainment. With the introduction of 3D however, the same activity becomes more immerging and adds Esthetic values to the experience.
The domain of esthetic is characterized by style, beauty, art, etc. and a passive consumer who cannot interact with what is going on (Nijs & Peters, 2006). Or as Pine and Gilmore summarize: “While guests partaking of an educational experience may want to learn , of an escapist experience to do , of an entertainment experience want to — well, sense might be the best term — those partaking of an esthetic experience just want to be there.” (Pine & Gilmore, 1999, p35)
Watching 3D TV therefore creates a more valuable and memorable experience for the audience than traditional 2D movies and shows.
The perception however about what is a valuable experience cannot solely depend on theories like that alone: it depends always on the consumer’s perception. That is why the target group research in part 2 should give a more accurate answer to the question if 3D TV is able to create a more valuable experience compared to 2D TV.
WHAT IS THE MARKET POSITION OF 3D TV IN THE US?
In early 2010 the world’s biggest TV manufacturers such as Samsung, Sony, Toshiba and Panasonic launched the first 3D home TVs in the new market.
A market research conducted by Renub Research called “3D TV Market and Future Forecast Worldwide (2010 - 2014)”, published on January 19, 2011 at www.marketresearch.com expected a total of 3.2 million 3D TV sets to be sold globally in 2010, a number that makes out 4% of all TV sets sold in the same year. Additionally, their forecast for the 3D TV market expects the unit sales to grow with a compound annual growth rate of 79.12%, passing the landmark figure of $100billion worldwide by 2014 (Market Research, 2011).
A report published by Display Search called “Quarterly TV Design and Features Report, Q4 2010” expects 18million 3D TV sets to be sold in 2011 and 90 million by 2014. With a combined market share of 66.17%, the USA and South Korea are the main protagonists on the 3D TV market (Display Search, 2011; Gagnon, 2009; Tribbey, 2009).
The United States are a potentially big market for 3D TV: 115 million homes out of a total of 130million (U.S. Census Bureau, 2010) have at least one TV - a total of almost 88.5% of the households. The average US household is equipped with 2.5 TV sets while almost a third of them (31%) have 4 TVs or even more. According to the Nielsen’s National People Meter (NPM) from September 2010, the “average American” spends 25.6 hours per week watching TV (The Nielsen Company, 2011 - see also graphic 6).
These numbers show clearly that the USA has a great potential and a wide and diverse target group to introduce 3D TVs to. Nielsen’s NPM and Nielsen’s Global Survey from September 2010 also indicate a percentage of 46% of all Americans who own an HDTV of which 14% are connectable to the Internet. Their data also show that 2% of the Americans have already purchased a 3D TV with a total of 2million 3D ready HDTVs being sold in North America in 2010 (The Nielsen Company, 2011)1. Those percentages indicate that there is not only a broad target group for new technologies, and that the group of innovators within the States already adapted to this new technology.
CONSUMER’S ATTITUDE TOWARDS 3D
According to a large scale quantitative research with consumers, conducted by CBS Vision together with Nielsen and CTAM, consumers are generally positive towards 3D TV: 76% of the surveyed people state that they are at least likely to buy a 3D TV, 17% of which are even “definitely” likely. However only 14% intend to buy a 3D TV within the next 12 months, another 42% want to wait at least 2 years and 34% want to wait three to four years. So even though the consumers are generally positive towards the new technology they are not yet ready to adapt to it. 48% find watching 3D content more engaging than 2D and 57% say that it made them feel like being part of the action and another 48% state it makes them feel closer to the characters (The Nielsen Company, 2010)2.
THE CHALLENGES OF 3D TV
3D TV as a new product in the market faces a diversity of challenges. According to the PESTEL model, challenges can be divided into political, economic, social, technical, environmental and legal challenges (Johnson, et al., 2008).
When analyzing the 3D TV technology, the most important challenges can be grouped into sociological, technological and economic factors. The sociological challenges probably have the greatest influence on the adoption of 3D TV as those deal with the potential consumers’ perceptions and concerns and the marketing strategies of the 3D industry. On the other hand, technological problems and challenges need to be faced in order to make 3D TV more successful. The following paragraph analyzes those challenges in detail in order to come to a conclusion in how far which aspect needs to be improved in order to increase the adoption of 3D TV.
The major challenges on the 3D market that will be discussed are:
Economic Challenges
- Costs
- Launch-Date
Technological Challenges
- Standardization of technology
- 3D glasses
- Lack of content
Sociological Challenges
- Consumer’s wait-and-see approach
- Education of consumers
- Mistaking the 3D effect by 3D producers
ECONOMIC CHALLENGES
COSTS
Both the production of 3D content as well as the manufacturing of 3D displays is more expensive compared to their 2D counterparts. The costs of 3D movie productions are up to four times the costs of the same movie produced in 2D (Mendiburu, 2008). And at the end the consumers have to pay for these extra costs. Even though the prices dropped drastically since the introduction of 3D TVs in 2010, 3D sets are still more expensive than 2D sets. Also, in order to watch 3D at home - to buy just the 3D TV is not enough. The consumer needs to buy a whole set, consisting of the 3D display, a 3D BluRay Player, a transmitter and 3D glasses. All of that added together makes the 3D experience at home a rather expensive one. Especially for large households the 3D experience can get really expensive because they need to purchase multiple pairs of 3D glasses. And as long as the active shutter glasses (around $120 per pair) are the most widely used- this can sum up to become a huge investment just in order to watch 3D at home.
UNFAVORABLE LAUNCH-DATE
The introduction of 3D TVs to the North American market occurred after the majority of the household adapted to HDTV. Apparently some 21% of all US households bought a new TV within the last 12 months and consider themselves set with their TVs. Only 18% of the households plan to purchase a new TV within the next 12 months (Entertainment Marketing Letter, 2011). This unfavorable launch date of 3D TV might explain a low adoption of the technology.
TECHNOLOGICAL CHALLENGES
STANDARDIZATION OF TECHNOLOGY
There is neither a defined standard for 3D TV production right now but there are also a lot of different technologies on the market. The consumer has the choice between active or passive 3D TVs, maybe at some point even auto-stereoscopic 3D TVs; he has the choice between LCD or Plasma displays and much more different options. Even though it seems that there should be technology to fit all the different types of consumers, this huge choice actually creates an information jungle, confusing the consumer. The usual consumer is hardly able to keep up with all the latest developments and changes of the technology and therefore becomes confused. This confusion can lead to some sort of frustration that leads to the fact that the consumer develops a wait-and-see-approach (see sociological challenges - consumer’s wait-and-see-approach) and hesitates to adapt to the 3D TV technology.
3D GLASSES
3D glasses are a challenge for the 3D TV technology in different ways.
According to studies conducted by the Nielsen Company together with CTAM, the main reasons the target group named about why they do not buy a 3D TV are: costs (68%), and the need to wear 3D glasses (57%) (Nova Gazette, 2010).
The most widely used 3D TV technology is active 3D that requires so-called active shutter glasses in order to see the 3d effects. Those glasses cost - depending on the manufacturer - between $100 and $150 per pair. But those glasses only work with a 3D display from the same manufacturer and are not compatible with a 3D TV from another brand. That means that a consumer who decides to purchase a 3D TV from one brand and at some point might want to buy a new one from another brand, the glasses become useless. It also makes it impossible to “just bring your own pair of 3D glasses” to someone else’s place and watch 3D TV there together if this person does not have a 3D TV from the same brand.
According to the Nielsen&CTAM research, it is not only about the price of those glasses but the consumer also considers them to be very uncomfortable.
LACK OF 3D CONTENT
Even though the different manufacturers develop more and more 3D TVs of all sizes, the 3D content still pretty much limited to 3D movies that are available on DVD. For the consumer this obviously is a major issue that makes them hesitate to buy a 3D TV (Shein, 2010). According to The Nielsen report about the consumer’s perception towards 3D TV the Top 3 of content they want to watch in 3D are Sports, Nature/Animal and Action/Adventure shows (The Nielsen Company, 2010, see graphic 11).
[...]
1 Data from Nielsen’s Global Online Survey conducted 09/2010. Nielsen surveyed 26,644 online consumers ages 15+ in 53 countries. This numbers only include US and Canadian consumers.).
2 Nielsen Wire - quantitative and qualitative research conducted in collaboration with CBS Vision and the Cable & Telecommunications Association for Marketers (CTAM) among 12 groups and families being exposed to 3D content for 30 minutes at Sony’s 3D Experience Lab in Las Vegas plus an additional 425 participants watching 3D content in a more theatrical surrounding. Results published on December 20th, 2010 at www.nielsen.com
- Quote paper
- Anita Theis (Author), 2011, The Future of 3D TV , Munich, GRIN Verlag, https://www.grin.com/document/192383
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