Interview with Josh Greer, Real D

Beverly Hills-based Real D ( develops digital cinema equipment which enabled 3D movies. The firm's equipment is behind this season's Journey To The Center Of The Earth, was rolled out with Chicken Little, and has been used for a large number of recent 3D titles at theaters. We spoke with Josh Greer, President and Co-founder of Real D, about the traction the firm is seeing, how the company started, and how it convinced producers and theaters to adopt its technology.

It seems like 3D movies have really hit their stride lately -- what's the current reach and penetration you have in the market?

Josh Greer: It's gone very well. We were lucky that we were very early into the space. Many people thought we were crazy, at first, but putting in that time and energy paid off. With the recent deals in Mexico and Canada, we've not got 98 percent of the market in North America for 3D theaters. I always joke that our CEO always asks me -- why don't we have that last two percent? We're excited about what we're providing, we've gotten buy off not only from the content side and the studios, but also from exhibitors as well. They recognize that we have a great, high quality product, that it's the easiest to deploy, and cost effective for theaters. Of the top ten theater chains, we support seven of them right now.

What is that, in terms of screens?

Josh Greer: To date, we've deployed 1350 screens in 25 countries around the world. We expect that will increase dramatically as theaters adopt new digital cinema technology. We've got contracts and commitments for rolling out with digital cinema to 5,500 screens.

How difficult is it to deploy your technology?

Josh Greer: The first thing is the most important, which is they must upgrade to digital cinema. For theaters to use Real D, they must have a digital projector server package. There are a number of companies that have DCI compliant equipment which meets the standard from the studios. Once they have digital, we upgrade that to include 3D presentation capability. The nice thing is that it's completely backward compatible, and they can switch back and forth from 2D to 3D in about two seconds.

What's the story behind Real D and how it got started?

Josh Greer: It's interesting. Myself and my partner, Michael Lewis, had an epiphany that a good 3D experience was like nothing else -- it transcends pictures as you know it. But, for the last five to seven years, there was no place to see it. There were only a few theaters with the capability, and it was extremely expensive. For me personally, I was working with James Cameron on Ghosts of the Abyss, and talking with him, realized what he went through creating things with stereo cameras. I realized that if he can change his production paradigm, why not change the presentation? That was the genesis of me starting Real D. I recognized, talking with the most talented and gifted filmmakers, that if you could create a platform for this, it could be a revolution in filmmaking.

Was it difficult to sell studios and movie producers on the technology, and how have you managed to get people to adopt your technology?

Josh Greer: For the first couple of years, putting together Real D was a very tough sell. The challenge is that we really needed to re-invent a cinema system that made sense in the digital age. That required us to go out and license technology, actually having to acquire entire companies. It took a tremendous amount of money to perfect the system for theaters. Once we actually locked it down, at a level we're proud of, we had Walt Disney come in. Two or three weeks after that, Disney greenlighted Chicken Little. Once that happened, the pieces fell into place relatively quickly--though it still felt like a long time. It was pretty gratifying. We had one film in 2005, two in 2006, and we had four films in 2007. We have six films in 2008, and expect to have 13 films coming out in 2009. We're really seeing the pipeline fill up, and have studios embracing it. It feels like there's now an entire ecosystem, and it's kind of picking up momentum and becoming self sustaining.

What's driving the shift into 3D?

Josh Greer: 3D is a very different experience. It heightens the experience, much like color and sound did when they came along. For us, we don't want to see any films in 2D anymore. My first reaction to films now is -- I wish I'd seen that in 3D. More and more people are embracing it, because it's more fun, more intensive, and how much more immersive it is. I don't think anyone will want to come back.

How do the overall trends in the theater market -- with the number of people going to films declining, etc. -- affect Real D?

Josh Greer: Frankly, digital 3D is the biggest godsend for theater chains. It's a unique experience you can't get anywhere else. And face it -- what's really driven it is the economics. From the first film, Chicken Little, Real D screens have outperformed 2D screens by three times. That means, theaters are seeing three times the revenue from Real D versus 2D screens. That's held up at 100 screens, and got even better over 1000 screens. From an economic standpoint, the cinemas love it. I think the audiences get their first great new experience in a long time. For filmmakers, it's a bonus, too, because they get something new and creative to play with in filmmaking. It's stirring up a lot of discussions on how to look at cinema for 3D, and how it changes filmmaking. I haven't found a director we have talked to, who has not walked out wanting to make a 3D film. It's been 100 percent universal.

It looks like this technology is for more than just movies?

Josh Greer: Yes. actually, the technology is based on technology being used by mission critical industries in the past -- used by NASA to navigate the Mars Rover, check on the Space Shuttle, for military aerial reconnaissance, drug discovery and modeling, and for the aviation industry to design planes. That's where we found the technology. In the process of figuring out how to build our 3D equipment, we acquired many of these companies to perfect those technologies. We're probably one of the larger suppliers in the world of 3D technology.

How big is the company now, in terms of employees?

Josh Greer: In North America, we have just over a hundred people, in our Beverly Hills, Boulder, and Toronto offices. We also have a joint venture in Japan, and factories in Shanghai, but there's around a hundred core people in the US.

What's the market for this in terms of screens?

Josh Greer: We've just begun. There are 120,000 theaters in the world, but there's only 5000 theaters so far with digital technology. The market is really ripe. We see lots of opportunities, and big opportunities around the world. In the US, we certainly see a rapid rollout in digital cinema, and we've still got work ahead of us in Europe and Asia.

Finally, does shooting in 3D make equipment a lot more expensive for filmmakers?

Josh Greer: It depends on the filmmaker. Certain filmmakers gravitate to it quickly. Looking just at straight economics, for a live action 3D film, it adds somewhere 5-15% to the below line budget. It depends on what studio you're talking to, and what the delta is for investing in 3D. For someone like DreamWorks, it might be as big as adding $50 million per film for 3D; but they're looking for the next greatest thing they can come out with. But overall, prices will continue to plummet until it's just as easy to shoot 3D as 2D, and why would you even consider doing 2D anymore?



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