Content Remains Issue as 3D Expansion Costs Loom Large for Networks

CBS produced weekend coverage of the U.S. Open in 3D last summer and part of the Masters golf tournament in May. The network’s position toward 3D is not going to be “like HD,” said Aagaard, “where we broadcasters ended up paying for the party.” Aagaard said he’s still in the process of completing the transition to HD. As the network does more 3D, “there’s no way our company is going to allow us to get into the technology unless it’s paid for,” he said.

In response to a question about the amount of 3D TV content coming in the next three years, Aagaard said, “We have to wait and watch how it all plays out.” He said TV manufacturers have been upfront with broadcasters about plans to push 3D monitors, but his view was that gaming would drive 3D TV, followed by movies, and then sports -- “the opposite of what happened with HD."

As 3D rolls out, “then we'll be able to find business models to pay for it,” he said. But broadcasters are just coming off “10 years of spending millions and millions of dollars to upgrade our capital improvements with no return,” he said. The costs were “across the board” to affiliates, small stations and networks, “and we're not done paying for it,” or with getting HD gear installed, he said. There’s not a strong appetite to spend a lot of money “on the come,” he said, especially in light of changes in the TV broadcast world brought on by the Internet. “The business is changing drastically as it relates to what the audience is doing,” he said, saying the TV audience is changing. Ratings translate to revenue, he said, and there’s “more pressure than ever” to make the financial situation work. The likelihood of networks spending millions on 3D that that “might take off” is doubtful, he said. “I don’t see that happening.” Although he believes 3D will arrive, “it’s going to take time."

Because CBS doesn’t have a model to generate revenue from 3D, the network will limit its 3D exposure to “one-offs,” Aagaard said, with costs shared by sponsor, distributor or other broadcasters. For the future, CBS will take a wait-and-see approach to 3D, dependent on funding, Aagaard said, saving 3D coverage for “bigger events.” Aagaard’s plan is to “do everything I can to try to stay in the space in a way that’s not going to cost us money.” It’s his only route, since the network “is not going to give us the money to do it anyway,” he said. Aagaard himself is committed to the technology and “willing to share what we've learned,” saying “we're all trying to learn and produce 3D, and we're all in the same boat.”

Aagaard agreed with other panelists that getting the message out about 3D is crucial for its success, and in his case, getting the message to network people is the first step. He had spoken to 100 CBS network sales executives that morning who wanted to know about 3D, and only 25 percent had seen 3D on TV, he said. The majority reaction, he said, was “this is better than I thought.” With a better understanding, he said, sales people can now start to think about “how they can make 3D work and how to monetize it,” he said.

As for viewer acceptance, Aagaard said he thought a move to a 3D TV model based on passive glasses would be more attractive to viewers. “As more passive monitors get out there, that’s going to help,” he said, acknowledging the dilemma to manufacturers of higher costs in a passive-glasses design.

ESPN, so far the most aggressive network with 3D telecasts, is using a dedicated production crew for ESPN 3D as it experiments with different production techniques and camera angles to learn what works and what doesn’t with live 3D events. The network employs separate teams for 2D and 3D coverage of NCAA football games it’s shooting this fall, as it did for X Games coverage and the MLB Home Run Derby last summer. “3D has been a work in progress,” said Anthony Bailey, vice president of emerging technology at ESPN, and one that’s “probably never going to finish,” as the network keeps refining the process. After four years working on 3D, “We have to get costs down,” Bailey said. The network needs to evolve to where it brings one production unit to cover an event “versus the caravan we bring now to do 2D on one side and 3D on the other,” he said.

Mark Hess, senior vice president of Comcast, had a different take on 3D costs. The company has been doing 3D for four years, starting with VOD movies and concerts requiring anaglyph glasses that the provider either sent to viewers or made available in local offices. Today’s 3D is “not hard to deliver,” he said. “We didn’t have to add anything in our network to make 3D work,” he said, and “almost all” HD boxes with HDMI connectors could deliver 3D from the start. No adjustments had to be made at the head-end to accommodate 3D, he said, and “it’s not a significant drain” on bandwidth, already stretched by the demands of HD sports, he said. And 3D works well through coax/fiber cable system, he said. He compared the 3D rollout to HD, which was “a lot of chicken-and-egg,” he said, between availability of content, boxes and TVs. “For once, we were ready to go,” he said. As more content comes available, “We're able to handle it,” he said. Comcast has had “the usual customer service issues,” but most 3D customers are early adopters used to dealing with new technology, he said.

Discovery Communications will begin telecasting its 24-hour 3D channel in “early 2011,” said Glenn Oakley, executive vice president of media technology production and operations. Oakley said the channel will be “one of the first all-native 3D channels on TV” and boasts the largest library of “original, exclusive, native” 3D content.

That should help DirecTV, which has had to seek partnerships worldwide to beef up the library for its 3D channel, according to Patricia Ishimoto, vice president of entertainment and general manager at DirecTV. Ishimoto said challenges arising from “a dearth of content” have forced the satellite provider to form a “global network” to secure content for the channel. Partners include BSkyB in the U.K, Orange and Sky Perfect in Japan as well as U.S. partners ESPN 3D for live events and re-broadcast rights, Fox and others. Ishimoto likened the beginning of 3D to “the Wild West” where “anything goes.”