Discovery’s 3D TV Venture

A pioneer in high-definition programming, Discovery Communications has now set its sights on the burgeoning 3D TV business. The company yesterday unveiled plans to launch a 3D network in the U.S. in 2011 in partnership with Sony and IMAX. John Hendricks and David Zaslav, together with Sony’s Howard Stringer and IMAX’s Richard Gelfond, spoke about the potential of this new business.

As the Consumer Electronics Show kicks off in Las Vegas tomorrow, 3D technology will be a prominent fixture on the exhibition floor. On the heels of the tremendous success of James Cameron’s Avatar at the box office, consumer electronics manufacturers will be keen to showcase devices that can bring the 3D viewing experience into the home. And content owners are angling for their piece of the pie. ESPN has already announced plans for its own 3D network, set to launch in time for the World Cup in June. Shortly after ESPN’s announcement came news of the joint venture by Discovery Communications, Sony and IMAX to deliver a 3D network to U.S. pay-TV customers in 2011.

Discovery, Sony and IMAX will be equal partners in the joint venture, which will deliver 3D programming from the natural history, space, exploration, adventure, engineering, science and technology, movie and kids’ genres.

"This is obviously an indication that Sony, Discovery and IMAX recognize the importance of 3D and are taking the lead in providing 3D content to consumers in the home," said Howard Stringer, the chairman, president and CEO of Sony Corporation, in a conference call with reporters yesterday. 3D technology, Stringer continued, "is the most important development since HD. We believe consumers will be driven to purchase 3D products and want 3D experiences and enjoy them, whether on IMAX or on television. It’s an opportunity for content creators to develop a new form of creativity and create a new experience for consumers all around the world."

Stringer pointed to Sony’s strengths in the 3D arena from both a device and content perspective, and stressed what IMAX and Discovery bring to the venture.

John Hendricks, the chairman and founder of Discovery Communications, cited the lead the company has already taken in the HD landscape. "We are all committed to this proposition that consumers will migrate and seek out closer-to-reality television experiences," Hendricks said. "We have certainly experienced that with Discovery HD Theater, which serves some 40 million households in the U.S. and around the world."

When asked about consumers’ willingness to embrace the new 3D TV sets that are set to hit retail this year, Hendricks stated: "There are about 5 million homes out there that we think of as early adopters. They will go over to 3D very quickly in the next 24 to 36 months. Thereafter, there are probably another 20 million affluent homes that relish having that home-theater experience. We think that marketplace will come on pretty quickly. And then you start rolling out to the masses."

Hendricks expects a mass rollout of 3D sets in five to ten years. For David Zaslav, the president and CEO of Discovery, being a leader in this new business is key. The deal with IMAX and Sony, Zaslav noted, gives the company "a new channel to take to our affiliate partners and further expand our pay-TV carriage. It establishes our position in the 3D marketplace in the U.S. and it positions us to take this venture around the world and build on Discovery’s unmatched global footprint."

Discovery will be bringing its large portfolio of content to the channel, as will Sony and IMAX. "Like our [partnerships] with Oprah Winfrey and Hasbro, we’ve found two industry leaders who bring great strategic advantages and market position to this venture," Zaslav said. "Sony and IMAX are synonymous with 3D. They have established libraries of content and a pipeline of upcoming television and theatrical releases that will bring great programming to this 3D channel. Sony and IMAX also have unmatched display and production technologies and, most importantly, are committed, like Discovery, to driving 3D as a new platform."

While Discovery is new to the 3D business, IMAX has been a leader in the arena for some time. "I’m glad people are joining us in the 3D world; it’s been lonely out there for the last 25 years!" quipped the company’s CEO, Richard Gelfond. "We’re happy to say that the changes in the environment in the last three years have brought in some of the greatest content makers in the world. It’s become a platform for choice for consumers. At IMAX, yesterday, we did 25 percent of the box office in the United States on only 2 percent of the screens. That gives you a sense of the power of 3D."

The partners have just begun conversations with U.S. carriers for the as-yet-unnamed network.