This is topic MasterImage 3D Glasses Who Pays? in forum Digital Cinema Forum at Film-Tech Forum ARCHIVE.


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Posted by Steve Guttag (Member # 268) on 01-18-2010, 09:13 AM:
 
As the topic asks...who pays for the Master Image 3D glasses? Do the studios pick up the tab as they seemingly do for Real-D? I know the Dolby 3D glasses are on the exhibitor.

If the exhibitor pays for the glasses on Master Image, they would almost have to collect them/clean/reuse if one were to want to make any money.

I've been working on calculations on just what the costs/profits are on the various systems and from an exhibitor's point of view...Dolby is by FAR in the lead of potential profit...even with losing half of their glasses before a "normal" 500 use cycle (and I mean in 5-digit more profit than Real-D or Master Image. I wonder how many exhibitors have looked at how much they wrote checks to Real-D for this past year.

In fact, Master Image stands to be the worst for theatre profit unless the glasses are free or reused. If they are reused, what is the life-cycle?

Steve
 

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Posted by Kris Verhanneman (Member # 5562) on 01-18-2010, 10:47 AM:
 
This is how they do it where I work.

The custumer buys the first time his glasses.
If the next time he brings his classes with him he doesn't need to buy new ones.
The custumor can also bring with him his realD glasses.
 

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Posted by Mark Gulbrandsen (Member # 72) on 01-18-2010, 10:54 AM:
 
Unless DTS has managed to get distribution to include them of recently all the locations that I've installed them at the customers have to pick up the tab. Oddly one of the locations still to this day gets cases of Real-D glasses with every 3-D film booked. Apparently the studios feel obliged to push the system they have money invested in. I know some of the customers have paid as much as .75 per pair for them in several thousand quantity. It's certainly one of the down sides of this 3-D unit. For those theater owners that know how to do very simple math it sure makes Dolby look like the el-cheapo one to own once you've initially bought all the stuff.

As much as I like Master Image and it's image quality it is way beyond being over priced. My ex employer was really pushing them much to my disgust... just another one of the reasons why I left there.

Mark
 

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Posted by Steve Guttag (Member # 268) on 01-18-2010, 10:54 AM:
 
That would make sense to me. I think Dolby should offer glasses for the consumer (With foldable ears and designed to look different than the loaner glasses). Then keep the glasses charge separate and out of the studio's split...if the customer has their own...eventually the glasses thing becomes a convenience item.

So how about in the USA with Master Image...how do you all handle it?

Steve
 

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Posted by Mark Gulbrandsen (Member # 72) on 01-18-2010, 10:58 AM:
 
Steve,

Don't forget that here in the US distribution is still going to charge the extra percentage for 3-D tickets even if the customer brings back his glasses to the next movie.

Mark
 

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Posted by David Stambaugh (Member # 1102) on 01-18-2010, 11:13 AM:
 
Steve, Does Dolby still win after you factor in all the associated Dolby costs like labor for handling the glasses, dishwasher(s), detergent, and utility use (water & electricity)?
 

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Posted by Steve Guttag (Member # 268) on 01-18-2010, 11:55 AM:
 
David...Oh yeah, it isn't even a close call.

Mark...for the ticket price you still do the split but one can do a lower up-charge $1-$2 rather than $2-$3. Then let the glasses be a separate $1.00 or so charge...if you have your glasses, then you save on the extra charge and end up with a lower cost 3D price than Real-D

I did a sample theatre that sold 100 tickets/day (average...slow days are less, busy days are more) for a potential annual ticket sales of 36,500. The number isn't too important to the profitability since it all scales at the same rate...the number affects payback (ROI). The Real-D system only works if the studios pick up the tab for the glasses. With a $2 up-charge, Real-D would actually lose the theatre money if they also had to pay for glasses...as almost happened this past summer with FOX.

Dolby will, on average, presuming you lose half of your glasses before their 500 use life-cycle and pay for cleaning...make the theatre twice as much as Real-D. Checking with my customers...it seems like the real-world number is about 1/6th shrinkage but I'm sure that will vary by location.

If you use my example theatre with 100 tickets/day. You will pay Real-D $18,250.00/year. That is equivalent to throwing away, at full list price ($27.50), over 660 glasses/year. At the money we are talking about, the payroll could easily have a staff to guard the exits for 15 minutes when the show is going to let out to keep shrinkage to a minimum. The potential profits WAY more than offset the labor costs. Especially since some/all of the "guards" would then need to clean the theatre too. Note, on slower days, one does not need as many to guard the exits since it is easier to keep tabs on a couple of dozen folks as would be for hundreds.

Heck, the theatre could even have incentives for keeping shrinkage to within "x amount"...bonuses or other rewards.

The more one analyzes the costs/profits the more Dolby stands to make the exhibitor the most.

Now all folks need to do is get their lawyers in action and start demanding a credit/ticket for glasses from the studios so long as Real-D gets them gratis. The studio should be uniform in its contribution and not favor one process.

Steve
 

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Posted by Elise Brandt (Member # 5552) on 01-18-2010, 12:54 PM:
 
Sorry, just to add something to the point already made; the extra labour cost is virtually non-existent if you look at a theater around that example admission number. For example with us, the same staff that is on duty anyway (and on hourly pay) takes that extra 15 mins to collect the glasses individually and clean them, the only extra cost is the washing machine (or nerves, if cleaned manually) and water + electricity which really isn't but peanuts. They get paid the same be there extra work or not, the only price you pay is complaints from the staff before they get the hang of it.

Have to say that in almost a year with reusable glasses, we have lost maybe one or two pairs, and even that is because we don't have the heart to make customers pay for glasses they accidentally broke.
 

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Posted by Julio Roberto (Member # 4976) on 01-18-2010, 01:57 PM:
 
Over here, some of theatres with Master Image do the following: collect the glasses w/o worrying too much about loss or inmediate cleaning with recycling bins.

Eventually, all the glasses returned get inspected/cleaned/repacked (labor-permitting) and get re-used. Theatre pays for the glasses, as Master Image has not yet pushed studios into buying them and set up a nice global distribution system like RealD has.

I have also run the same numbers that Steve mentions extensively on a spreadsheet under many different situations (i.e. different "realistic" numbers of 3-D films/year with different "realistic" numbers of patrons, different rate of glasses losses, etc, etc).

I pretty much reach the same conclusion as Steve EXCEPT in the case of Technicolor 35mm 3-D system, which almost always produces more profit than Dolby in a 10 year period if you consider 10 years the amount of time to depreciate your equipment 100% (which in case of DCI cinema is expected to be more like 15 years, but just in case) and show at least 8 3-D films per year (the more, the better for Technicolor, since they only charge anything at all for the first 6/year and it's free after that) to an audience of at least 1500 each.

Also, so it happens, that Dolby is only third in MANY more situations where XPAND is the ahead in profits. Think about it. XPAND is "just like Dolby" (reusable glasses), with a rated life cycle of 3000 uses (over 3 times Dolby's) and:

a) Doesn't require a high gain screen (light efficiency doubles Dolby)
b) Doesn't require a "filter wheel" (Dolby´s is ubber expensive)
c) Doesn't require a "high powered projector" and "high powered lamp" (compared to Dolby). A high powered lamp can also add $1000 more a year in recurrent costs for electricity and lamp purchases.
d) Can use cheaper servers as no Dolby color correction is needed.

Sure the price of XpanD glasses are $20 more per-unit than Dolby's and they require $1/each per month of battery cost. Still, if you have 300 seats, that's only $15.000 more than Dolby for glasses up-front, which it compensates by having cheap interface units/no filter wheel, no gain screen, etc. After that, it's about the same in replacements (xpand glasses are tough, less proned to be stolen due to size, but higher $ to replace one they break).

The thing is: if you are "lucky" with either Dolby or XpanD glasses (not a high rate of loss/brekage), then both systems pay off in the long run w/o trouble (by far, like Steve says) and allow you to keep more profit.

But if studios pick up the tab for glasses (so far only with RealD), or you can get a good rate of glasses re-use, or if the custome pays separately for the glasses and brings them back himself, then Master Image would get ahead of the pack as well.

-But if theaters pay say $0.65/glasses/ticket plus say $30.000 in system installation (i.e. Master Image)=fail
-If theaters pay say $0.50/ticket in Royalties (i.e. RealD) plus say $10.000 in system installation (RealD)=fail

System must be free of royalty fees AND glasses cost (as much as possible) to be profitable in the long run. Otherwise, the digital system doesn't EVEN pay for itself with the surcharges in 10 years, much less produce profits on many situations for small cinemas.
 

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Posted by David Zylstra (Member # 4230) on 01-18-2010, 03:21 PM:
 
My analysis (based on a $2.00 3D charge, 340 seat auditorium) always seems to put Dolby 3rd and even if I take away all ongoing costs for Dolby (glasses replacement, labor, maintenance) they still end up second to Master Image.

From what I was told Master Image (and 2-projector) exhibitors get their glasses provided by the studios just like RealD (provided there is an additional surcharge for 3D).

If I use 1 3D screen at a moderately attended location (2500 tickets ave per film, 10 titles per year) RealD is the quickest to profit if you are a CBG member, but Master Image wins long term followed by 2-projector. Dolby is 3rd with RealD last after 10 years (but Dolby beats RealD only by $1,000 total for those 10 years).

If I do the same as above but for a busy location (5500 ave tickets per film, 10 titles per year) Dolby beats RealD after year 3, but after 10 years Dolby is still 3rd behind Master Image and 2-projector (and there is a much bigger gap between Dolby and RealD due to the higher attendance).

I think a true comparison for Dolby vs. the others is by using re-usable polarized glasses (I've been told they are available for $3.00-$5.00 each and I forget the life cycle - but they carry the same labor to collect and clean as Dolby), I've never run the analysis that way because our ownership is resistant to the reusable glasses of Dolby and XpanD . . . . . For my analysis I ignore the Dolby life span and just assume a .2% loss rate (so the more attendance you have the more that will break or walk away), I also factored in some additional onging maintence costs for Master Image, Dolby and 2-projector.

I think overall potential attendance is a factor as well - i.e. the labor to collect and clean a maximum of 200 pairs per show is different than collecting and cleaning 400.
 

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Posted by Julio Roberto (Member # 4976) on 01-18-2010, 05:41 PM:
 
If you can get glasses from distributors for Master Image, then indeed Master Image jumps to the head of the pack. Otherwise, it remains at the bottom.

It all comes down to who pays for glasses. If it's 100% free (paid by studios from their share of the surchage) and there are no royalties attached, then that's the winner. Dolby/XpanD comes next. RealD would come last, since the glasses are free but they have a royalty attached plus a $10k "installation" cost (plus silver screen).

Technicolor, provided the glasses are shipped for free, is also a very good performer, specially for medium/large theaters with 10 or more 3D shows per year, as their royalties stop at 6 shows/year.
 

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Posted by Matt Fields (Member # 3211) on 01-18-2010, 05:43 PM:
 
When comparing costs of the different systems, is everyone taking into account deprecation? The tax savings makes the systems you own (Dolby, Masterimage) more attractive, especially if you are a profitable business paying in the higher tax brackets (in the US).
 

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Posted by Julio Roberto (Member # 4976) on 01-18-2010, 05:46 PM:
 
In my study, I didn't take in account depreciation nor financing costs, as you may deduct the taxes but you also have a $100k "loan for 10 years" in equipment with the systems that need digital (i.e. except Technicolor).

I did make a note that those numbers are not included in the analysis.
 

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Posted by Mark Gulbrandsen (Member # 72) on 01-18-2010, 06:09 PM:
 
David... The wash cycle is but three minutes long. In many theaters the glasses live in the metal wash baskets and are distributed fomr them and then put right back in them after a show to go back through the washer again. It's all very simple to do and the cost per cycle of a pair of glasse is... counting the cost of the glasses, labor, electricity, and wash chemicals... about a nickle per cycle of glasses.

Mark
 

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Posted by David Zylstra (Member # 4230) on 01-18-2010, 10:01 PM:
 
The observation I made at an IMAX location was 3 employees washing, drying, stacking and inspecting a single show's glasses for at least 30 minutes (I was in line for my chosen show of Avatar near the wash room for at least 30 minutes) . . . . so figure at least 8 busy shows over a weekend you get 12 hours labor, my analysis counts an additional 14 per week so I don't think I am too far out of line. Presumbably the collection and washing of IMAX glasses are similar to Dolby.

Are you sure it is a nickel per 3 minute cycle of glasses? if you take $0.05 times 20 wash cycles per hour you get $1.00 per hour . . . . minimum wage here in Michigan is much more than that - my calculation shows that labor alone per 3 minute cycle would be $0.40.

How many glasses fit per wash? Our busy weekend Avatar shows on 2 screens would have meant having to collect and wash 550 glasses every show cycle (300 from the larger screen and 250 from the medium).
 

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Posted by Elise Brandt (Member # 5552) on 01-19-2010, 04:28 AM:
 
I don't know what the sense is in having three people do the job of one, and obviously not very efficiently either. Obviously the labour cost also depends on who's doing the work, of course you can take five kids off the street to do it and take an age and a fortune, or you can have one experienced and motivated person take care of it in a flash, while doing everything else at the same time.

Of course if there's 500 glasses per show and the washing machine only takes 30 pairs at a time (which would be a serious miscalculation on the theater's part) I can understand the extra hands. otherwise... no. Just spending money where you don't have to. In the purpose of creating jobs perhaps?
 

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Posted by Mark Gulbrandsen (Member # 72) on 01-19-2010, 07:25 AM:
 

quote: David Zylstra

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The observation I made at an IMAX location was 3 employees washing, drying, stacking and inspecting a single show's glasses for at least 30 minutes

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quote: Steve Guttag

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give a glasses allowance to non-real-D systems, Dolby again would run away with being the most profitable....its all in the glasses.

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quote: Steve Guttag

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So what are the down sides to Master Image?

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quote:

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Julio Roberto
-Cheap glasses, no need to purchase anti-theft$$/dishwasher$$/chemicals/drying/labor/expensive replacements/etc.
-You can also use re-usable glasses if you want.

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quote:

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MI-G200 is washable circular polarized glasses for multiple time use purpose which is used with our Digital 3D cinema system, MI-2100. It has fashionable design and durable plastic frame and high quality and coated polarizer to satisfy its reusable purpose.

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quote:

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A spokesperson for RealD, the company that makes the 3-D glasses, informed me that every pair dropped in the recycling bin is sanitized and then reused, while those glasses that are broken or no longer functional are melted down to be recycled into other plastic products. Recycling bins are also provided to every theater worldwide using the glasses.

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quote: Dennis Benjamin

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Three separate times I have gone to see a 3-D movie there - I have a splitting headache afterwards.

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