[Satellite News 10-20-10] Being the first operator to announce a 3-D initiative and launch a dedicated 3-D channel has helped U.K. pay-TV giant BskyB establish a reputation for staying ahead of the pace in the broadcast market.
    However, this reputation also created a challenge. BSkyB said the quality of 3-D content would be the biggest selling point, and while BSkyB’s Sky 3-D channel is set to launch in the United Kingdom before the end of October, Brian Lenz, BSkyB’s director of product development, told Satellite News that the broadcaster has yet to find a third-party channel partner to deliver new content to the platform.

Satellite News: What immediate results do you expect from your 3-D channel?

Lenz: Initial expectations are that we are going to put out a high-quality experience to our customers. We are putting something out there that is free for our top-tier sports, movies and HD customers. I want customers to see 3-D as a different, exciting and engaging experience for them. We want to see 3-D develop into a standard, rather than remaining a niche. It is all going to be coming down to how we produce high-quality service and provide content that is engaging rather than doing it for the sake of doing it.

Satellite News: How many 3-D channels could you add during the first year?

Lenz: I see growth in the number of 3-D channels, but I am 99.9 percent certain that it will not be as rapid as the way HD took off. With HD, everybody converted to doing their TV from SD to HD, and even if it was broadcast on an SD channel, they were creating it in HD. They just got to that point in terms of how their content was made. Now, we have around 50 HD channels. The whole industry has changed over. You have to choose to create a 3-D program and understand that there is going to be less content. Your whole schedule won’t turn over to 3-D.

Satellite News: How do you plan to add content to the platform? Will you sign third party 3-D channel deals this year?

Lenz: As of now, there is no announcement imminent. Discovery is staying in the United States right now. There is nothing in train right now. Who knows what types of phone calls we might get soon? There is already been a couple of channels who have applied for a license, but nobody has gone into the launch period. Nobody has approached us about that.

Satellite News: Will the take-up of 3-D in cinemas have an impact on the migration of 3-D content into living rooms?

Lenz: I think cinema is helping, and that will continue as long as you see great movies coming out. I think what we are doing will drive it — as well as Blu-ray 3-D. However, I think that 3-D gaming will differentiate the way 3-D will develop, compared to HD. I think the gaming segment already has the options to get stereo 3-D games through Sony’s Playstation 3 and Microsoft’s Xbox. Those who value those experiences right now will be willing to pay the premium.
    We had a big event promoting 3-D gaming capabilities earlier this year where we went out to the game production community and talked about 3-D and what it meant to them. We are pretty active in trying to support this ecosystem, but I don’t think it will be necessarily come down to having formal partnerships with the gaming content and console providers. I am sure there are different ranges of things we could consider from a marketing or partnership standpoint, but there is nothing formal on the table at the moment.

Satellite News: How long will it take before 3-D TV prices make the technology more accessible to the general public?

Lenz: There is no reason to believe that you are not going to have a higher volume of 3-D TVs out there. I think you will get less of what happened with HDTVs. Most people bought HDTVs because they had flat screens and not because they were HD. There are 15 million HDTVs out in the market with only 4 million people connected to HD. I think you will see less of that as people to start to choose 3-D TV more consciously, but I think you will see 3-D capabilities standards in most new TVs and the base will continue to increase.

Satellite News: Do you think having to wear glasses will hold back 3-D TV in any way?

Lenz: There will be a segment of people who won’t wear the glasses, but all of our research points out to the fact that there are wide ranges of people who will wear the glasses if we provide really good content.
    In terms of glasses and cost, I think 3-D will start off as a premium. You will have passive and active options and a lot of choice. The glasses also will be bundled with TVs in promotions. The market is going to look different over the next year in terms of how they are sold.

Satellite News: Will 3-D TV increase advertising revenues?

Lenz: We already have a range of advertisers involved after we launched the commercial channel in April. Guinness is a partner. We have Mercedes and LG ads and a lot of market interest as we start to go into homes. Not every advertiser will play in that space, but I think those that like to be associated with the premium experience will be there.

Satellite News: How do you see the returns on investment in 3-D?

Lenz: I wouldn’t overstate the investment side of 3-D. The fixed initial investments have been in production and acquisition because of the low availability of the acquisition kits in traditional rental markets. The costs are almost all marginal. We figured out how to use our existing platform to deliver high quality 3-D that is compatible with all the new 3-D TVs coming out. The economics meant we did not have to invest in infrastructure. We just had to invest in production.