With RealD-enabled screens "representing 75% of total domestic 3D box office in 2009," RLD is the obvious leader in this market. Its name is prominently advertised throughout the 17 of the world's top 18 "motion picture exhibitors," which license its technology, typically on five-year exclusive agreements.
Its RealD Cinema Systems can be installed in a matter of hours, instantly upgraded existing digital cinema projectors at a lower cost than competition 3D systems. Additionally, management claims its circular polarized passive RealD eyewear provides a more comfortable 3D experience, allowing viewers to move their heads with reduced image distortion and fewer headaches.
Just over the past quarter there was a 5.2% increase in locations worldwide and a 12.1% increase in RealD-enabled screens, now totaling 5,966. On a small scale, this is an impressive growth rate, providing a strong argument for RLD's potential.
However, to put things in perspective, there are approximately 149,000 total theater screens worldwide, leaving a lot of room on the table for competitors to penetrate the markets.Since RLD's story may seem almost too good to be true, it probably is. Although RLD has established a strong market share, it must compete with the IMAX experience, with screens and theaters specifically designed for 3D movies, and also the financial resources of Dolby, which creates direct competition with the newest 3D technology known as Dolby 3D Digital Cinema. Keep in mind the public has the final say, and while 3D movies are seeing a surge in production, with 23 expected to be released in 2010, nearly doubling the 13 released in 2009, there is no guarantee they will generate the box offices numbers that are necessary to promote further investments from Hollywood studios. Consumers have tolerated the need for 3D glasses thus far, but it is a drawback for the technology and may hinder the overall adoption of the 3D format. RLD realizes many trends that were once novel can quickly become a nuisance and are researching a 3D technology, which would not require glasses, but there has not been anything officially developed.
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