Three-dimensional displays captured hearts and eyeballs at January's Consumer Electronics Show in Las Vegas. What those ogling lush demonstrations from the likes of Intel and Samsung didn't know was that the technology was developed over the past 17 years in Australia.
Chris Yewdall: In 2006 to 2009, the 3D experience was far more popular than the same film in 2D and Avatar was a great example. The film grossed US$430 million (A$ 483 million), 78 percent from the 3D screen.
That's given the content owners a very pragmatic understanding of the value of 3D content and if you have high-quality 3D content then consumers will pay a premium for the experience. It's a long way from the experience decades ago with red and blue glasses; it's now a high-definition experience with no compromised colour.
[But] 3D content is very expensive to create. So at CES you've got major consumer electronics companies saying they will deliver TVs to market this year that will deliver a theatrical experience to the living room.
If you're in Myer and ask, "What 3D content can you watch on the new 3D TVs?" once you've burned through the 20-30 titles, that's it. There's clearly a need for content and that's what we've homed in on.
At DDD, we develop and exploit 3D intellectual property. There are two types - technology intellectual property (the ability to convert 2D to 3D for games, videos and photos automatically) and in post-production.
We exploit copyright intellectual property [content] with video-conversion technology. If you were at Samsung's stand at CES you would have seen a soccer game in 3D using the 2D conversion capability that is in a chip built-in to the TV. We licence the conversion technology to Samsung much like Dolby would license its audio technology. We get a royalty and it's packaged as PC software.
With the Acer 3D notebook [which uses CineReal Technology], underlying that is DDD's automatic 2D to 3D video, photo and game conversion technology.
Other products our licensees brought to market [include] a 3D-without-glasses mobile phone by Samsung in Korea in 2007 [that converted the video on the fly]. Sharp used a precursor to what Acer is using in 2003.
Back in 2004, as part of work we were doing with the 3D Consortium, we met with Arisawa who have a technology that you can layer on to TVs that's similar to a 3D cinema experience. Arisawa is a materials company and they want to sell lots of sheets of their polarising material to put on TVs and the key driver is they needed lots of 3D content in the market. Arisawa now owns about 22 percent of DDD.
If you look at what Intel showed at its keynote, [its CEO Paul] Ottelini showed Codemaster's video game Dirt 2 converted to 3D using our technology [Tri-def Ignition] that sits between the game and the PC to turn those games into 3D.
Last November we released the yabazam.com content site. It has 18 3D movies including shorts and a 40-minunte Imax feature. What we've done on the Acer laptop is provide trailers [to] download the movie and we share the revenue with the content creator. About 50,000-60,000 laptops were shipped between October and December.
CRN: What are the market projections?
CY: We see the 3D market growing to 20 percent of the laptop PC market over the next three to four years. The key driver in TVs is a new generation of 240Hz LED backlit LCDs. Analysts DisplaySearch forecast these TVs to have 10 percent of the market this year, 14 percent next year.
In 2010, 3-3.5 percent of all TVs shipped will be 3D-capable; that's 4 million to 5 million of the 154 million shipped in total worldwide. All 200Hz to 240Hz models are candidates for 3D capability so that's about four million units.
Next year, LCD will grow to 170 million units worldwide but the 200Hz to 240Hz backlit models will be 14 percent or 16 million TVs. In 2012, the market will grow to 175 million units, 20 percent will be LED LCD or a 28 million-unit market. That doesn't include the mobile phone market and laptop and desktop PC market.
CRN: Where does the DDD brand sit in the channel?
We're a B2B company. Our goal is to build a very successful licensing business that generates royalties. Revenue in 2008 grew 82 percent; 2008-09 revenue is likely to grow more than 130 percent.
CRN: How much of DDD's technology is in upcoming displays?
CY: If you look at volume production in 3D notebooks we're dominant, the alternative is shutter glasses. Asus has some 3D shutter glasses notebook computers however, the monthly production volumes are lower than with polarisation.
Quartics has a chip to deliver 3D based on DDD's approach - we give them software to optimise for their chipset, Quartics markets the chip to their customers.
Intel's engineers have worked at their expense to optimise our software code for their 2010 laptop and notebook processors. They take our code, use their internal tools and based on an intricate understanding of their processor technology they feed that back to DDD to deliver faster processing.
CES generated PR from major companies [BskyB, Imax, Sony Discovery] but you won't see the 3D TVs in retail until April-May; you won't see [content] distribution channels until the second part of 2010 until the consumer can buy the TVs.
It won't be until CES 2011 that we'll really have the measure of a market that's hit its stride.
CRN: Where are your researchers?
CY: We have a really good team of [developers] in Perth. We're based in Technology Park in Bentley [WA] and also Santa Monica in the USA. By having an office in Australia we service our customers in China, Japan, Taiwan and Korea. The US is probably going to be the largest market - we're very close to Hollywood and key technology partners such as Intel and set-top box makers.
CRN: What are the most promising applications for the technology?
CY: Back in 2003 when we were working with Sharp on its $3000 laptop it was targeted at the scientific user.
[But] we can put game conversion technology together that converts a game for thousands of customers. We could blow the dust off technologies and hand them to a partner.
CRN: Where will 3D find its niche?
CY: [Big 3D displays] without glasses will hit in five to 10 years. [The content] will be event-driven.
We've automated techniques but these algorithms make an average of 3D decisions. But if you [have] a 3D artist tweak depth in a scene [networks can] convert their programs for less than $10,000 an hour. They can sell their content for a premium.
You think creatively about where the audience's attention is drawn and we'll work out how much we can push that point of focus for a comfortable 3D experience.
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