Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
Posted by: Kenji Hall on September 28, 2009
In recent years, TV manufacturers have tried to entice buyers with thinner screens and crisper images. Now Panasonic is trying to portray itself as a force in the tech industry by taking the lead in spreading high-definition TVs that can handle both 2D and 3D images. On Sept. 28, Panasonic unveiled a 50-inch plasma TV that it plans to launch sometime next year. The company won’t say when or where the product rollout will begin or at what price the sets will be sold.
Panasonic officials played up the TV’s new technology during a seminar the company held for journalists at its factory in Ibaraki, near Osaka. But tech advances only offer a partial explanation for why Panasonic and other consumer electronics manufacturers plan to release 3D TVs. The other reason: As Hollywood studios convert their growing list of 3D movies on DVD, tech companies see a chance to cash in. In 2010, studios are planning to release more than 30 3D movies, says David Wertheimer, who heads the University of Southern California’s Entertainment Technology Center.
For Panasonic’s strategy to work, it has had to cozy up to movie studios. The man behind the effort is Eisuke Tsuyuzaki, chief technology officer for Panasonic’s North American Operations. More than two years ago, Tsuyuzaki started offering studios Panasonic’s technical expertise in converting 3D movies to DVDs. The mission now is to get major studios to support Blu-ray as the standard DVD format for high-definition 3D videos, Tsuyuzaki said during a recent interview at the Panasonic Hollywood Laboratory, in Universal City, Calif.
If the issue is TVs why focus on Blu-ray? Industry executives say selling 3D content on DVDs is the fastest way to get it into consumers’ hands. (Broadcasts and video-on-demand services could take longer to develop simply because of the technical challenges of delivering huge amounts of video data to homes, says Wendy Aylsworth, engineering vice president of the Society of Motion Picture and Television Engineers and a Warner Bros. executive.)
Panasonic stands to benefit: Providing studios with the technology to convert 3D movies made for theaters to a size that can fit on a DVD could spur 3D TV sales. After TVs and DVD players, Panasonic can broaden the lineup to cameras and other gadgets. “As a business, 3D has a huge potential bang for the buck,” Tsuyuzaki said.
Studio executives say Blu-ray doesn't suffer from the "ghosting" effect that plagues other 3D technologies. "Nothing beats [Blu-ray] or even comes close," Walt Disney Studios Home Entertainment President Bob Chapek says.
Studios also like Blu-ray because it’s the de facto high-definition DVD format. So there’s unlikely to be another format war like the fight between Blu-ray and rival standard HD DVD.
Until Tsuyuzaki was appointed CTO in June, he led the Panasonic Hollywood Lab, located in a one-story building next to NBC Universal’s tower. There, technicians stare at flat-screen TVs and professional monitors in dark, windowless rooms as they turn films into Blu-ray master versions, which are used to mass-produce movies on disc. One tiny room has every Blu-ray DVD player on the market. Another room is crammed with servers that process the massive amounts of video data. There’s even a private theater with a 360-inch non-perforated screen--the largest in Hollywood—that engineers use to evaluate the picture quality of movies on disc.
One of Panasonic’s first moves was to sign on to 20th Century Fox’s live-action 3D film, Avatar, directed by James Cameron. Panasonic provided Cameron’s team with professional digital video cameras and high-end monitors. It also reached out to French video game developer Ubisoft, which was working on an Avatar game in 3D.
In mid-2007, Tsuyuzaki invited Disney executives to Panasonic’s Hollywood Laboratory to show them a 3D Blu-ray prototype. Impressed, Disney officials lent Panasonic a master copy of The Nightmare Before Christmas in 3D and asked to have it reformatted to a Blu-ray disc. What Panasonic brought back “wowed us,” says one official who declined to be identified because he wasn’t authorized to speak publicly. Panasonic also reworked a seven-minute 3D clip by Cars director John Lasseter that was shown to executives at a National Assn. of Professional Broadcasters event earlier this year.
Panasonic’s initiatives are paying dividends. The company now promotes its TVs alongside the movie Avatar, which is due for release in December. It is also in talks with Disney to reformat many of the studio’s 3D films on Blu-ray DVDs. Later this year, the Blu-ray Disc Assn., the consortium of electronics companies and movie studios that sets the format’s tech standards, is expected to finalize 3D standards that Panasonic helped create. That will allow tech companies to launch DVD players--and TVs that work with them--in 2010.
Convincing consumers could be more of a challenge. Some consumers might balk at having to wear special glasses to view at home. "Widespread rollout," says DisplaySearch senior vice president, Paul Semenza, "is going to take several years, at best."
To raise awareness, Panasonic has set up temporary 3D theaters to showcase its technology at events and conferences around the world. But a survey conducted earlier this year by USC's Entertainment Technology Center underscores how much work there is to do. The survey found that only 7% of U.S. consumers have seen a 3D TV demonstration, and just 3% say they bought a TV capable of showing 3D content. But it's Panasonic's ties with Hollywood that could end up being the marketing masterstroke.
BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.