The Rise Of 3D: How Sports Drives The New Economy

I was struck by an article from the Associated Press earlier this month that led with the headline, "Basketball, hockey championships gain TV viewers." And that's just the sporting events that wrapped this summer. Back in February, we witnessed the record-setting, most-watched Super Bowl. I bet we will see similar trends with FIFA World Cup. With attendance down at most sporting events due to the economy -- among other factors -- more Americans are relying on their family room entertainment. The fan experience at home has been vastly improved, largely in part to the availability of HD products and programming.

In that same article, the Associated Press cites the following Nielsen statistics -- an estimated 52% of American homes had HDTVs and were actively using them in 2010. That's compared to 33% in 2009 and 17% in 2008. HD television, movies, videogames, etc., have been a boon for the media and sports industries. But, there are early signs that the hardcore sports fans are already hungry for the next level -- 3D.

3D is all about improving the consumer experience at home. And like all things in sports, advancements in technology are welcome only if they look and feel authentic. While there's a lot of room to grow, there's no doubt that 3D makes the experience of watching an event more realistic. But, is it just a fad? Television manufacturers and media companies are betting that it isn't. I tend to agree, as 3D has opened yet another door to a host of new revenue streams and marketing channels -- and that's good news for the economy.

ESPN launched its ESPN 3D network on June 11 in conjunction with the launch of the 2010 World Cup. ESPN 3D is expected to broadcast more than 100 events during the next 18 months. So far, 3D seems to lend itself nicely to some of most high-profile events in sports, i.e., the Masters, World Cup, X-Games and Major League Baseball's Home Run Derby. Currently, leagues and rights holders are angling for more content. Sony is leading that charge by signing on to be an official sponsor of ESPN's 3D network. Sony will be the exclusive 3D sponsor of the 2011 BCS National Championship Game, 13 regular season college football games and Summer X Games, at which ESPN will utilize Sony professional HD cameras.

It's also worth noting that the television manufacturers, in addition to the movie studios, video game platforms and media companies, are all pushing 3D to the forefront. Sony, for example, is not only an official FIFA partner, but also one of the few companies to advertise during the World Cup on ESPN 3D. Samsung, on the other hand, is not a World Cup sponsor, but it purchased airtime to promote 3D televisions during the World Cup, scoring high marks for its spot that features a boy bringing a mural of a soccer scene to life and removing the ball from the image. With Samsung the #1 television brand by sales in the United States, I expect it to make great strides in advancing 3D.

Manufacturers are also beginning to compete at the retail level. There are mixed reviews in terms of how to create the best consumer experience or even whether stores have enough salespeople with knowledge of 3D features. When I ventured into a big box electronics store to learn more about the 3D TVs, I gave the early edge to Samsung's models. While the real competition has not fully arrived yet, i.e., Sony, Panasonic, LG, etc., Samsung appears to be recommended more and has more product displays, and the retailer's salespeople are better informed about its products.

As with most emerging technologies, i.e., mobile, online video, etc., 3D is opening a window to new revenue streams beyond retail. From how sporting events are filmed to their distribution, new opportunities exist for both technology and media companies. But, perhaps, most impacted by the shift to 3D are the advertisers. According to a recent Wall Street Journal article, the costs for advertisers to create 3D ads are cited at 30 to 40% more than a traditional television ad. The question for now seems to be, when will the investment pay off? If HD growth is an indication, it won't take long.

As more sports fans and consumers turn to 3D, there are advertisers who will want to be there first to make the early connection, with the new technology, in the minds of the consumers. And if the experts are right, the consumers are coming. For example, the Consumer Electronics Association estimates that one million 3D TVs will be shipped to U.S. retailers in 2010, with the number tripling to four million in 2011. According to a Displaybank report, 6.2 million 3D television sets are expected to be sold worldwide this year, growing to 83 million in only four years.

For now, 3D is a novelty for early adopters. But, if the sports industry continues to partner with manufacturers to push 3D to the forefront of the consumer/fan experience, mainstream is just around the corner.

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