RealD Inc. is facing challenges from some big-name competitors that want to share the 3-D movie spotlight, but what is possibly its most worrisome rival has an unusual pedigree.
MasterImage 3D Inc. got its start in Seoul, South Korea, equipping movie theaters with 3-D systems, but its newest business is developing glasses-free 3-D technology for mobile devices and other small screens.
Though the company moved its headquarters to Hollywood last year, it still has employees in its homeland and strong ties there that have paid off big. The company recently received a $15 million investment from South Korean electronics behemoth Samsung to boost its R&D.
“It’s a wonderful endorsement,” said Roy Taylor, MasterImage executive vice president of 3-D mobile display, of the investment. “We want to do even more with the technology in the future. Our ambition is to have (glasses-free) 3-D on every screen.”
MasterImage has installed 3,000 traditional 3-D systems requiring glasses in theaters worldwide, giving it the third largest market share behind Beverly Hills-based RealD and San Francisco’s Dolby Laboratories Inc.
But if it can develop its glasses-free technology for the big screen, that would be a game changer that could vault it into technological leadership.
The technology works like this: MasterImage puts an optical layer on top of the screen that breaks up the picture in a way that shows two pictures to the viewer’s right and left eye. Together, those images appear as one 3-D picture.
Currently, glasses-free 3-D works best when someone views it on a steady small screen at eye level. As such, MasterImage plans to use its technology first on cell phones, tablets, and screens in airplanes and vehicles – but eventually it could move to home TV sets and big screens at movie theaters.
Cell phone makers are interested in MasterImage’s technology; Tokyo’s Hitachi Ltd. was the first to use it when it launched the Wooo phone in March 2009. But there wasn’t enough 3-D content, so the phone didn’t take off. Now, with a profusion of 3-D movies and videos, a new round of 3-D devices is rolling out.
Several phone companies, including Seoul’s LG Electronics and Taoyuan, Taiwan’s HTC Corp., showcased glasses-free 3-D phones at the Consumer Electronics Show in Las Vegas earlier this year. In February, Kyoto, Japan’s Nintendo began selling a 3-D version of its portable game console that doesn’t require glasses. Apple Inc. is also rumored to be considering 3-D for upcoming versions of the iPhone, iPad and iPod.
All in all, MasterImage is in talks with more than 40 companies and will have its technology on new devices by the holiday season.
Victoria Fodale, a senior analyst for mobile devices at ABI Research in Scottsdale, Ariz., said 3-D without glasses will likely be a hit with cell phone and tablets users.
“Mobile is in a unique position to bring 3-D to a mass market,” she said. “Three-D isn’t compelling enough that you’ll get rid of that flat-screen television, but with mobile, the upgrade cycle is 12 to 18 months.”
Chief Executive Younghoon Lee founded MasterImage in Seoul in 2004, and two years later the company installed its first 3-D cinema systems in local movie theaters.
The majority of the company’s business still comes from its 3-D cinema systems, which are installed in more than 60 countries. Last month, MasterImage inked a deal with Cinema City International, the third largest multiplex theater operator in Europe, to install 60 more systems.
The company’s 3-D cinema systems use a technology called a polarized filter disc, which sits in front of a projector lens and spins rapidly. That sends different images to the viewer’s left and right eyes. When a person wears polarized glasses, those images appear in 3-D.
Lee moved the company’s headquarters to Hollywood in October to be closer to the city’s entertainment community and California’s technology centers. The office is on the fourth floor of a Raleigh Studios building across the street from Paramount Studios. Twenty employees work out of that location, while an additional 80 employees remain in Seoul. With the Samsung funding, MasterImage plans to hire up to 50 more employees in Los Angeles, many of whom will focus on the company’s glasses-free offerings.
MasterImage sells its systems to theaters for a flat fee, while RealD gets a modest installation fee and then takes a percentage of the box office, making it more dependent on the popularity of current release. MasterImage did not provide its pricing for this article.
Philip Lelyveld, program manager for the Consumer 3-D Experience Program at USC’s Entertainment Technology Center, said MasterImage is a serious challenger to RealD, which uses disposable glasses and a similar projection technology that works on silver 2-D screens. (Dolby’s system requires more expensive glasses but works on virtually any screen.)
“RealD was the first entrant into the space, but MasterImage is coming on strong worldwide,” he said.
Peter Koplik, MasterImage’s president of digital cinema, said the company would like to have glasses-free technology for movie theaters in the future, but acknowledged that it will be a long time before 3-D technology can leap that far.
“There’s a tremendous amount of research and development to do it,” he said of glasses-free 3-D.