This will be a monster-size weekend at the movies, and I'm not just talking about box office numbers. Yes, if you have kids, you're sure to find yourself at a matinee of Monsters vs. Aliens, which is opening on 3,500 screens. The performance of this film is key for DreamWorks Animation (DWA), since it's the studio's only theatrical release this year. And the success of the film in the 3-D format it was made for will direct the future of the digital 3-D format. Right now 3-D is mired in the credit crunch; theaters and studios need $1.4 billion in credit to convert enough theaters to show the slew of upcoming 3-D movies. Without that financing, hundreds of millions of dollars of movie budgets could be for naught.
Monsters vs. Aliens debut on Friday is a far cry from the exclusively 3-D debut DreamWorks Animation CEO Jeffrey Katzenberg planned on. The film will be on 1,500 3-D screens, the rest will be regular old 2-D. The studio spent an additional $15 million to make the movie in 3-D, on top of of its roughly $160 million budget. But 3-D movies cost about $3 more than an average movie ticket, a premium that the movie studios and theaters share. So not having those 2,000 additional 3-D screens means lots of lost revenue.
What now? We'll see if people are willing to pay the premium for the 3-D experience at those 1,500 theaters. I'm guessing that they will pay up - it's still a really affordable entertainment experience compared to a sporting event or concert. Having gotten a sneak peek of the movie in 3-D last weekend I have to say that it was by far the most impressive example of 3-D technology I've seen yet. Cool glasses, no headache, awesome animation. If people do pack the movie's 3-D screenings, that could help accelerate the pace of the 3-D rollout, giving Wall Street bankers proof that underwriting 3-D projectors will pay off.
UPDATE: DreamWorks Animation just got me the most up-to-date numbers: The movie will play at over 4,000 locations on more than 7,000 screens. The company expects more than 2,000 3-D screens, including 147 in Imax.
A year ago Katzenberg told me he'd release the movie only in 3-D, fully expecting the rollout of digital 3-D screens would continue as planned, providing 5,000 3-D screens. Theaters and studios finally agreed on a plan to split the costs of the new technology. But last fall the credit crunch put a dramatic halt to financing the conversion of screens to Digital 3-D, at $70,000 a pop. In order for this technology to take off, the credit markets need to unfreeze.
This movie just can't escape the financial crisis. Now a stimulus from a bailed out bank might give its box office a boost. Bank of America (BAC) is subsidizing a free upgrade for its customers to see Monsters vs. Aliens in 3-D vs. 2-D. As anyone could have predicted, this sparked a storm of criticism: is this really the right way for the bank to spend its money? Is there a guaranteed return on investment? Bank of America was smart enough to clarify that this customer program will only cost the bank $175,000. And who knows, maybe Bank of America customers customers will use those taxpayer dollars to see the movie in 3-D, which could help the rollout of the technology. And that would give a stimulus to the entire movie industry.