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3-D Backers Start Popping Out

10/08/2000 8:00 PM Eastern

New York-Chris Yewdall sat a visitor in a leather chair, facing a TV screen, and popped a videotape in the VCR. A fighter jet then flew out of the monitor, hovering about two feet in front of the screen.

Despite Yewdall's attempt to swat it with his hand, the jet performed some fancy stunts before flying back into the set.

No, there weren't any hallucinogens involved in the demonstration Yewdall held in a hotel suite here last week. You didn't even need 3-D glasses.

Yewdall, the CEO of Dynamic Digital Depth, showed off a prototype of the company's new, glasses-free three-dimensional viewing technology to Wall Street firms and the press. Come December, you may find fighter jets and other 3-D images flying around Motorola Inc.'s booth at the Western Show, where DDD plans to demonstrate the glasses-free 3-D product on a large-screen prototype display.

Chad Greulach, a top executive at Chrysalis Entertainment Inc., hopes cable and satellite subscribers will soon see something else flying out of their TV screens: body parts. Chrysalis plans to distribute the first 3-D adult pay-per-view movie this January, Greulach said last week.

"It will feel like you can reach in and touch things. [Body parts] will seem like they can come off the screen," said Greulach, whose company plans to distribute new shutter 3-D glasses that would allow viewers to see adult stars in a new light. (Incidentally, Liberty Media Corp. holds a large stake in the company that distributes the glasses, i-O Display Systems LLC.)

Though activity has picked up in the 3-D space, no company has made a significant dent in the cable industry.

Last week, shares in C3-D Digital Inc., which had boasted the first 3-D cable network, hit an all-time low of $1 after the company said it would switch its focus from the 24-hour cable network to pay-per-view distribution.

CEO J. Michael Heil said the company hasn't decided whether it will pull the plug on the network, which only has carriage deals with a few small cable systems.

"Some of these cable operators feel there is not enough content and not enough good quality programming to support a network," acknowledged Heil, who said his company owns about 60 hours of 3-D programming, ranging from extreme sports shows to vintage 3-D movies from the 1950s.

C3-D is now pitching cable operators a pay-per-view 3-D version of theSports Illustratedswimsuit-edition video, which the company licensed from the magazine, Heil said. The firm also plans to demonstrate a glasses-free 3-D product by the end of the year, Heil added.

Yewdall, the DDD CEO, said he expects it to be three to five years before television manufacturers ship glasses-free models. Japanese manufacturers such as Sony Corp. and Sanyo Corp. are developing sets that would likely cost about as much as high-definition televisions, he said.

In the meantime, DDD, which Yewdall calls "the Dolby of 3-D," plans to license its technology to companies looking to sell 3-D programming through broadband Internet outlets, IMAX movie theaters, pay-per-view and DVD distribution.

The company has also talked with major studios and about converting existing two-dimensional content to 3-D, Yewdall said, noting that the post-production conversion typically costs $5,000 per minute. And at least one major cable network has shown interest in incorporating the company's technology into new shows.

In addition to the glasses-free demo, which involved a prototype television monitor, last week the company demonstrated 3-D programming over the PC. One monitor required use of shutter 3-D glasses, while a second $4,000 monitor offered glasses-free 3-D video of the New York skyline.

Emphasizing the advertising potential for 3-D, Yewdall described how the company can insert the video image of an airplane towing a billboard, which could then weave its way around an image of Manhattan's skyscrapers.

"The advertisers are going to want to get their message across in the most indelible way possible," he said. "And the content creators, once they begin to realize that they can get all of that depth and visual richness back into the image and onto the consumer without the need to wear glasses-will demand that their content is built and made in 3-D."

Next week, DDD will launch a U.S. cable trial in which 3-D programming will be delivered to the PC via cable modems, Yewdall said. He wouldn't name the cable system or say how many households are involved, citing a nondisclosure agreement.

The company also cut a deal with Apple Computer Corp. through which the computer maker will support DDD's technology in the next version of its "QuickTime" streaming-media platform.

Yewdall said the company wants to deploy its 3-D technology through Motorola's "DCT-5000" advanced digital set-top by the second quarter of 2000, or possibly sooner.

The company cut a development deal with the set-top manufacturer last year. In January, Motorola bought an 8 percent stake in DDD.

Motorola Broadband Communications Sector chief technology officer Geoffrey Roman said he's bullish on the potential of 3-D programming.

"To me it just adds a whole degree of realism. When you first look at it, it seems strange for two seconds. And then it seems almost unnatural to look at [programming] without 3-D," said Roman, who sits on the DDD board.

In the near term, Roman said, there may be a market for glasses-free 3-D advertising kiosks in malls and airports.

Discovery Channel incorporated 3-D into an hour-long "Shark Week" program in August. The network cut a deal to distribute 3-D glasses for free through LensCrafters outlets, and also handed out glasses through its Discovery Channel Store chain.

"The real challenge at this point is to go beyond it just being a gimmick, but to gradually build [3-D] into sequences," Discovery executive vice president and general manager Mike Quattrone said.

He said the company would like to develop additional 3-D shows in which "it's not just, 'Here's a 3-D sequence built into the program, 'but to weave it into the storytelling."

DDD and C3-D Digital also distribute 3-D programming through their respective Web sites, ddd.com and 3-D.com. And Chrysalis plans to offer adult programming through two Web sites, deeppictures.com, and a gay site, deeppicturesman.com.

The company will also distribute other types of programming-including extreme sports and animation-through vrprimetime.com, beginning in January, Greulach said.

In the long term, Yewdall said he expects all programming will be 3-D.

"If we had been meant to see the world in 2D, we'd have been born with one eye," he added.

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