By Michael Philpott, Ovum

Last week Ovum attended Panasonic’s 3D analyst event, which was being held alongside its annual European conference in London. Panasonic is a leading player in 3D technology, developing products and solutions for content producers as well as the consumer. Such players will influence and help drive the market, as they not only push the uptake of 3D-compliant devices but also work with content producers to identify those best practices that will generate the optimum user experience. This will be vital to mass-market adoption. However, although the supply of 3D-enabled devices will dramatically increase, Ovum believes it will take time to permeate the mass market and that content will remain a mix of 2D and 3D for many years to come. The impact to network operators therefore will be gradual, but cannot be ignored.

3D will quickly become the default

Regardless of whether you wish to watch your favorite soap opera or sitcom in 3D or not, it will soon become impossible to avoid the latest video craze as 3D technology at least will soon come as standard. Fifty percent of Panasonic’s TV/video product line in 2011 will be 3D-enabled, and by 2012 Panasonic aims to increase this to 80%. In the not-too-distant future all TVs will be 3D-capable. And this phenomenon will by no means be limited to the TV: laptops, tablets, mobile phones, and portable games consoles are heading the same way. TVs in general are not cheap and it takes years for any new technology to work its way through the market, but certainly the next time you do go out to buy a new TV, the chances are it will be a 3D one.

Different modes for different screens

As with other video technologies that have gone before it, there is no single standard for 3D. Today, 3D TV comes in three basic formats: passive glasses (what most people have experienced in the cinema); active or “shutter” glasses (as preferred by Panasonic); and glasses-free. Panasonic prefers active glasses technology as it provides true HD 3D quality, the downside being that the viewer must wear glasses to watch a program, and as they are active (i.e. contain electronic elements), they are currently priced at a premium compared to the passive equivalent (that contain no electronics) – although vendors claim that the price will come down with scale.

Although many people would prefer not to wear glasses at all, according to Panasonic glasses-free 3D technology has too many drawbacks to be used in large-screen devices such as a TV. Panasonic does believe that the technology is good enough for smaller screens such as a mobile phone, portable games console, or even a tablet/laptop-type device. It can also be used in advertising billboards where catching the eye of passers by is more important than achieving optimal quality. So glasses-free 3D technology certainly has its uses, as no-one wants to carry 3D glasses around with them, but for larger TV screens where picture quality is vital to the experience, glasses – and preferably the more expensive active ones – are (according to Panasonic) unavoidable, at least in the short to medium term.

Confusion is likely to reign, however, as some vendors are starting to produce glasses-free 3D TV products to appeal to a public that would prefer not to have to wear them. In a world where average Joe is already confused by technology jargon such as 720i, 1080p, 200Hz, LCD, LED, Plasma, etc., the added complication of whether to choose 3D technology with passive glasses, active glasses, or no glasses could be enough to put people off buying a new TV altogether.

Content remains an issue

Needless to say, a 3D TV is fairly pointless if there is no decent 3D content to watch on it. According to the International 3D Society, the number-one question asked by consumers in the US looking to purchase a 3D TV is not one of price but of content. However, the content industry is as excited by 3D as the vendors, as they see it as a way of boosting sales – especially in the HD DVD market, which has seen sales tail off to worrying levels. In 2011 there will therefore be a plethora of 3D content released onto the market, including many of the latest blockbuster films, games, and a greater number of live events. Adult content is also being pushed towards 3D as the industry sees it as a way of moving away from the Internet and back into DVD sales.

However, not everything works well in 3D. Live sporting events can be particularly tricky to film, and in many countries it is sport that drives pay-TV subscriptions. Directors still have a lot to learn about what works well, what doesn’t, and how to seamlessly blend it all together, if 3D is to truly enhance the watching experience rather than just be seen as a gimmick. Panasonic believes this can be achieved if the whole industry works together to identify and to educate each other on best practices for quality production.

Impact for operators will be more gradual

The flood of 3D devices and (to some extent) content onto the market sounds dramatic, but this will still take time to permeate the mass market. TV product lifecycles are still above five years for most people, so it will be some time before we reach a majority tipping point. Even when 3D technology starts to become more common in the home, it is Ovum’s belief that only certain genres will see early demand, such as blockbuster films and gaming. Much of what we watch will remain 2D in the short to medium term. Finally, not all 3D content will be true HD 3D. Content on smaller/alternative screens in the home is likely to be of a lesser quality and thus not as bandwidth-hungry. From the telecoms operator point of view, 3D TV is definitely on the near horizon, and certainly for those operators that have TV interests, it is something they will need to be planning for – but the network impact will be more gradual.

Michael Philpott is Principle Analyst at Ovum Ltd. Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions.

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Copyright Ovum 2011.