Panasonic CTO: 3D TV Is 'Chicken Or Egg' Story


Newark's Liberty International Airport should probably install a revolving door for Eisuke Tsuyuzaki, chief technology officer at Secaucus, N.J.-based Panasonic. Not only must Tsuyuzaki shuttle back and forth between the wetlands of New Jersey and the digital aerie of San Jose, Calif., (Panasonic laboratories) but also to and from the boardrooms of network and cable broadcasters.

That's because the company is counting on making the majority of its flat-panel TVs 3D-capable by next year, so a big part of his job is to serve as 3D evangelist to content producers: the goal is to get them to see 3D content as an affordable revenue opportunity. After all, if there is more 3D content, people will buy more 3D TVs.

It helps that the company, which is now marketing its second generation of 3D televisions, also happens to make the equipment to broadcast in 3D. Panasonic just signed a deal with the International Olympic Committee that will result in some 200 hours of 3D content broadcast from the London games next year. Tsuyuzaki spoke to Marketing Daily from the U.S. Tennis Center in Flushing, Queens, where Panasonic is a sponsor, and is involved in 3D broadcasts of U.S. Open tennis matches.



Q: To use an optic metaphor, you seem to have a bi-focal job description: you're in both product development and marketing.

A: My focus is on developing new technology and new markets in the U.S. I talk to every broadcaster you can name at least once a month, the majors and others. My job isn't really only technology, it's [also] understanding the dynamics of the market and helping grow the right kind of partners.

Q: What are the barriers to consumer acceptance of 3D?

A: The great interest in 3D theatrical content suggested there would be strong demand for 3D television; when they see it in a theater, it's the natural expectation for people to want that kind of functionality in the home. Then you have to figure out if you look at markets, who do we need to work with to create an industry? If you're a movie studio, by having [a 3D] theatrical release you can amortize costs; you get more revenue and it's more profitable, so they love 3D.

Q: How about bringing it into the home -- why is that easier now?

A: HD technology is mature and it's inexpensive. So instead of having to compromise by sticking two crappy images into one high-definition frame you can have two pristine high-definition frames. That's the difference. The bandwidth is no longer as much of an issue. And high-definition is a benchmark now; consumers expect that level of quality, and I do not want to compromise on that.

Q: Even with limited content, do people seem interested in 3D?

A: Introducing big technology that will transform the industry is always chicken and egg. If I'm going to make content, I need to know how many people are going to watch. But last year, the difference in price between a 3D TV and a 2D TV was about $200 -- not a heck of a lot. And we sold, as an industry, about 1.3 million 3D televisions. This year, as an industry, we will sell about 3.5 million 3D TVs. That means in two years that's 4.5 to 5 million TVs. If you compare that to the introduction of high-definition television 12 years ago, in the first five years [after the introduction of HD] the industry sold less than half a million TVs. It was something like that. This time, it's 5 million in two years, so the velocity is much higher.

Q: But as a percentage of total TV sales this is still a tiny slice...

A: Say 200 million of any kind of TV was sold in the world last year, or 100 million of the ones that make a difference -- the big TVs you see at the big-box retailers. Given this growth curve of 3D, most flat-panel TVs will have both an Internet and 3D functionality by 2013, or 70% of all our screens will have a 3D feature by then. The ramp-up is getting quicker and quicker.

Q: What will drive the market in terms of 3D content?

A: Obviously movies -- but also sports, traditionally, is a huge driver, which is why we spend a lot of money pushing these programs, and it's why we're here. The key is the variety of different genres available in 3D: scripted dramas, documentaries, nature, movies, music, Broadway ... you want a wide range of programming. What's really going to push it is big tentpole events broadcast in 3D, such as Major League Baseball's All Star game.

Q: Why is the U.S. Open so important for Panasonic?

A: We make lots of revenue outside of the consumer realm: the professional cameras, the signage, the solar panels, the laptops. We have a lot of stuff. From a corporate standpoint, since New York is our home base, it's important to reach out to the community and you know what the makeup of this community is -- it's very affluent. Ultimately, when we integrate not only the [grassroots consumer] activation, but during the 2D broadcast where we say: "Do you know that this is also available in 3D," the awareness really pops. That's where we always see a huge lift. That's why it's worthwhile doing this.

Q: What strategic advantage do you have over other consumer electronics companies making 3D TVs?

A: One point is that we have the capability to make the professional gear to do this. Other people don't do that. They want to do it, but it might take them a while or they won't do it as well. I'm biased, but I think we have done a better job because we have spent a lot of time with the production community.

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