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Discovery, Sony, IMAX Detail 3D Plans

Will serve as equal partners in 24-hour network set for 2011 launch 1/05/2010 12:47:00 PM Eastern

Discovery Communications, Sony Corporation and IMAX
Corporation formally announced Jan. 5 that they are forming a joint venture to
create a 24-hour 3D television network in the U.S. to supply programming for new
3D HD sets. However, they didn't provide any details on carriage with pay-TV
operators or the technical infrastructure behind the service.

Discovery says it will start talks with distributors Jan. 6, and that there are no carriage deals currently in place, though it expects the channel to be a broadly distributed entertainment channel, not a premium offering.

The partnership
aims to launch in the U.S. in 2011 with a mix of 3D-friendly content, including
natural history, space, exploration, adventure, engineering, science and
technology, motion pictures and children's programming from Discovery, Sony
Pictures Entertainment, IMAX and other third-party providers. It will also
explore international distribution opportunities in the future.

ESPN announced ESPN 3D earlier Tuesday (Jan. 5), but has only committed to that network through June, 2011. Discovery, Sony and Imax say they are committed to their project long term. On a conference call with reporters, Discovery founder John Hendricks likened the launch to that of Discovery HD Theater in 2002. Hendricks said that the network will target primarily early adopters for the first 24-36 months, people who will likely be the first to buy television sets that are 3D capable. After that, the target households will be the 20 million affluent homes in the U.S., after which the technology and the price point will likely be affordable to the average consumer.

"That marketplace will come up pretty quickly, and then you start rolling out to the masses," Hendricks said. "In 2002, with the HD channel, few would be projecting we would be in 40 million homes by now."

The channel will require specialized glasses like one would wear at a movie theater 3D screening, though Sony CEO Sir Howard Stringer said they expect 3D sets that do not require glasses to be available in about 3-5 years.

"We intend to create the right experience, they are going to want to put on glasses," said Imax CEO Richard Gelfond.

The companies also say the channel will require about 6 megahertz of bandwidth.  That's about the size of a standard analog cable channel, but they can get two or three HDs down that capacity using 256-QAM Modulation.

The companies have signed a non-binding letter of intent to
form the JV, and have not released financial details of the agreement.
Discovery, Sony, through its U.S.
affiliate, Sony Corporation of America,
and IMAX each will be equal partners. Governance for the joint venture will be
handled by a board of directors comprised of members from each of the three
companies, with the day-to-day operations run by a separate staff and
management team reporting to that board. The JV has already begun searching for
a general manager to run the venture's general manager will begin immediately.

"Discovery's business strategy has always focused on
delivering groundbreaking content through new platforms, including the first
suite of digital channels launched in 1996 and the first 24/7 basic cable HD
channel in 2002," said Discovery Founder and Chairman John Hendricks in a
statement. "Now, as Discovery celebrates its 25th anniversary in 2010 as the
world leader in satisfying curiosity and bringing audiences the most realistic
viewing experience, we continue to change the face of television with the launch
of the first-ever 24/7 dedicated 3D television network."

Discovery will provide network services, including affiliate
sales and technical support functions, as well as 3D television rights to
Discovery content and cross-promotion across its portfolio of 13 U.S.
television networks.  Sony will provide
advertising/sponsorship sales support, and seek to license TV rights to current
and future 3D feature films, music-related 3D content and game-related 3D
content, while providing cross-promotion at retail stores.    IMAX also will license television rights to
future 3D films, offer promotion through its owned-and-operated movie theaters
across the U.S.,
and provide a suite of proprietary and patented image enhancement and 3D
technologies.

Discovery's involvement in the 3D venture is not surprising,
as Discovery executives have privately mentioned their interest in 3D for
months and have already considered which shows would work in 3D and which ones
wouldn't. For example, Deadliest Catch
was referred to by several executives as a show that wouldn't work, as it would
likely make viewers seasick. As discussed in the Dec. 30 Broadcasting &
Cable TechTalk (click
here to listen
), Chief Media Technology Officer John Honeycutt and other
Discovery engineers have been evaluating "dimensionalization" technology from
several firms as a potential way to convert 2D archive content to 3D in
post-production, which would be more cost-effective than shooting new 3D fare
with specialized cameras.

Sony and IMAX have already collaborated on 3D movies in
theaters for years, and are natural technical partners for the venture. While
Sony is obviously making a big push on the 3D display side, following its
efforts in digital cinema projectors with a new line of consumer 3D HD
displays, it is also heavily involved in 3D HD production technology.

Much of the 3D HD content shot in recent years has been done
with specialized rigs that incorporate Sony HDC-1500 cameras, including the
James Cameron movie Avatar and live
broadcasts of college football games produced last year by Fox and ESPN. Sony
is also expected to have a role in ESPN's
new 3D channel that was announced today
, as it has already formed a
partnership with FIFA to produce a number of 2010 World Cup matches in 3D.

"Sony is the only company with expertise in every part of
the 3D value chain," said Sir Howard Stringer, Chairman, CEO and President of
Sony Corporation, in a statement. "We are delighted to be partnering with
Discovery and IMAX, two premier companies also dedicated to leadership in 3D,
in this groundbreaking new venture.  It is clear to us that consumers will
always migrate to a better and richer entertainment experience, and together we
are determined to be the leader in providing that around the world."

Who will carry the new 24-hour 3D channel remains to be
seen. But the launch of a new DirecTV satellite last week has fueled
speculation that DirecTV will launch a 3D HD service next year, something 3D
insiders have suggested privately for months. The blog HDGuru.com
reported that DirecTV will use the new DirecTV 12 satellite to start an all-3D
HD channel
offering an assortment of movies, sports and programs in 3D, and
that it will announce the new service at the Consumer Electronics Show in Las Vegas next week.

According to the report, which cited unnamed sources,
DirecTV's current HDTV boxes will receive a firmware upgrade to allow existing
subscribers to receive HD 3D programming that will be compatible with new
3D-capable HDTV sets from Panasonic, Sony, Samsung, LG and other TV makers, as
well as existing Mitsubishi DLP sets that would require a 3D converter box. All
the sets would require DirecTV subscribers to wear special glasses to view the
3D content.

DirecTV spokesman Robert Mercer wouldn't comment on the HDGuru.com
story. But in an email message, Mercer did allow that "3D is something we are
very interested in and we're looking at all of the various pieces of the puzzle
that need to be put together."

While 3D has created buzz in movie theaters, delivering it
to the living room remains a challenge for multichannel operators. DirecTV is
seen as the most likely U.S.
pay-TV operator to launch a 3D service because it enjoys a national footprint,
it has already deployed bandwidth-efficient MPEG-4 set-tops with powerful
processing chips, and moreover, it has already established the precedent of
selling expensive subscription packages like "NFL Sunday Ticket" to sports
aficionados. Nascent 3D fare could be marketed in a similar fashion.

Alex Weprin contributed reporting.

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