Panasonic Readies 3D TV Bundle with ‘Avatar’

The lack of widespread availability of 3D content has been a significant barrier to sales, although many retailers set low expectations for 3D TV sales this year. Nebraska Furniture Mart forecast 3D would account for 2-5 percent of its 2010 TV business and sales thus far have matched that projection, CE Merchandising Director Mark Shaw told us.

"If somebody wants the best picture out there, the 3D TVs are it whether you happen to use them for 3D or not,” said Rick Souder, executive vice president of merchandising at Crutchfield. “But that is a limited base of customers right now and I don’t know if the software is where they thought it would be at this point. You still hear people say ‘it’s cool, but what would I watch? It’s still a big draw to stores because consumers want to see it. There is a high level of interest, but whether they pull out their credit cards is another issue."

There have been 14 3D Blu-ray titles released thus far, including promotional discs. That’s short of the projection for 100 Blu-ray 3D titles former Panasonic executive Robert Perry gave a year ago without giving a time table for their availability. New 3D Blu-ray titles are expected to be released this fall including Monster House on Sept. 14 from Sony’s home entertainment unit. Disney is shipping A Christmas Carol on Nov 16. While DirecTV and ESPN have launched dedicated 3D channels and programming is increasingly available, it’s still short of what’s needed to get consumers to buy 3D TVs, retailers said.

While U.S. 3D TV sales this year will likely be 2-4 million units, Carlson conceded “it’s been more challenging than we thought” due partly to the need for content to help boost TV sales. The Avatar 3D title will be available to current Viera plasma 3D TV owners, although how they get a copy hasn’t been finalized, Carlson said. While 80 percent of consumers in a recent Panasonic survey were aware of 3D technology and the majority believe it is a “terrific experience,” getting them to buy the sets remains a challenge, Carlson said.

"From an awareness perspective people know about the technology and understand it, but now what we are working on, and the economy isn’t helping, is the purchase and that will change with time,” Carlson said. “We often measure success in unit sales, but in the long term we have to seed the marketplace and so part of the success measure is the extent to which consumers know, understand and finally want the technology."

While Avatar Producer Jon Landau said a 3D Blu-ray version of Avatar wouldn’t be released until an “acceptable” level of 3D TV penetration was achieved in the U.S., Panasonic isn’t using the same measure, Carlson said. “We haven’t timed an appropriate launch window based on the penetration rate,” he said. “We try to be a bit more longer term and it’s a situation where we have to prime the pump and get the content out there. From our perspective there is nothing to be lost and everything to be gained from getting Avatar out to consumers as soon as possible. That mind set of waiting until we have a critical mass before we make a great thing available to consumers is unfair to the early adopters."

While Samsung has frequently undercut Panasonic’s 3D TV pricing by $200-$400 and is marketing a 50-inch 720p plasma set at $989, Panasonic has no plans to match them, Carlson said. While Panasonic “can’t be insensitive” to price moves by its competitors, it won’t alter it’s “strategic focus,” he said. “Obviously we don’t want to be the price brand and we are not the price leader,” Carlson said. “That is not what we are all about, which is delivering best in class entertainment experiences to consumers. We need to offer value at the same time, but we don’t want that to be driving our offerings."

Panasonic’s 3D Blu-ray players are being sold virtually at a 1:1 ratio with 3D TVs, due largely to their being bundled with the sets, Carlson said. Unclear is whether Panasonic is replicating the 3D Avatar title. It has facilities in Japan and the Hollywood Advanced Authoring Center in California that was expected to start production last spring. A Panasonic spokesman declined comment. Avatar has recorded $2.7 billion in box office revenue since being released in December. Twentieth Century Fox released a 2D version of the movie in the spring. Avatar collected another $4 million with the theater release last weekend of a special edition of the movie.

Despite its recent purchase of the majority stake in an LCD joint venture with Hitachi, Panasonic has no immediate plans to introduce 3D-capable LCD TVs, a spokesman said. Consumers are better served with the picture quality delivered by plasma TVs, the spokesman said. Panasonic markets up to 42-inch LCD TVs in the U.S. It also fields 42-inch plasma sets, having dropped 37-inch models a few years ago.

Panasonic also has no plans to introduce new WirelessHD-capable plasma TVs, Carlson said. It shipped the 50-inch Z1 WirelessHD-equipped plasma TV last year, but didn’t return the technology to its line this year, Carlson said. “There isn’t so much a problem-solving that is taking place with wireless TVs,” Carlson said. “It’s a nice sort of thing to talk about and some may value it” but consumers haven’t been requesting it, Carlson said. Panasonic invested in WirelessHD chip developer Sibeam in late 2008.