With the demand for digital 3D films at an all time high, Technicolor has decided to jump into the fray with what they are calling an affordable, alternative solution that has stirred up intense debate. The leading motion picture service company is introducing the Technicolor 3D Solution, which will allow exhibitors to use their existing 35mm film projectors to project 3D releases without upgrading to more costly digital cinema equipment. And there’s the rub; rather than using digital content Technicolor’s solution is film based.

Even though the technology relies on celluloid, rather than bits and bytes, Ahmad Ouri, Technicolor’s Head of Strategy, Technology & Marketing, on Wednesday assured roughly 400 members of the industry that the technology was not old or steeped in the past. Sitting on a panel titled 3D’s Impact On Digital Deployment at the 3D Entertainment Summit in Los Angeles, Ouri explained, “It’s actually new technology that we’re introducing that’s perhaps based on an older concept. A lot of people have experienced 3D on film historically. We’re introducing a system that is basically an over/under film based solution that’s two-perf based on a format that Technicolor brought to market decades ago called Techniscope.”

Techniscope was first introduced in 1963 and used by the likes of spaghetti-western filmmaker Sergio Leone in an effort to find more economical ways to shoot. By halving the size of each film frame less film stock could be used, though the image quality was less than that of the four-perf (or four sprocket hole) format. Technicolor 3D Solution uses a special split lens that can be mounted to a conventional 35mm projector which then assembles the left eye and right eye images as the film runs through the projector. The system requires the same type of silver screen and circular polarized glasses employed by digital 3D systems such as MasterImage and RealD.  Technicolor already distributes glasses for both of these companies and will begin to distribute their own branded, polarized glasses.

Technicolor has already shown the system to the studios and most of the North American exhibitors, not to mention a few filmmakers and members of the press. Last month, Technicolor worked with Warner Bros. and AMC Entertainment to run a two week trial of the solution at a multiplex in Burbank during the release of “The Final Destination”. Exit polls performed by research firm OTX showed the “quality” and “satisfaction” scores of Technicolor 3D Solution to be the same as the digital 3D version playing in the same theatre. According to Technicolor, their system actually ranked slightly higher.

Technicolor is hoping their solution will help exhibitors quickly ramp up the number of 3D screens at their disposal to play such films as James Cameron’s 3D opus “Avatar”, one of the most highly anticipated releases in the last few years. There are at least 10 3D films being released in 2009 with 12 scheduled for 2010 as of now. More are likely to be added. Unfortunately, thanks to the high price of digital cinema equipment and the global financial meltdown only 2,500 screens in North America (out of a possible 40,000) are capable of playing 3D movies. Many big blockbuster releases open on more than 3,000 screens which has forced studios to distribute 2D versions of 3D titles. However, 3D versions earn more than twice the box office than 2D versions of the same release, in part because theatre owners charge a premium ticket price for 3D movies. Thus, expanding the 3D install base has been a major priority for both distributors and exhibitors.

In the press release announcing the product Frederic Rose, Chairman and CEO of Thomson/Technicolor said:

“In today’s economic environment, it’s a harsh reality that not every exhibitor has access to the funding required to install digital 3D projection systems. It was the desire to make 3D accessible to the masses that resulted in Technicolor creating a 3D solution to fill the gap between celluloid and digital cinema.”

Other industry executives on Wednesday’s panel didn’t exactly see Technicolor’s solution in a similar light. “I think that any money invested in technology that’s not digital is something that’s not good for the industry in general and for where we are taking the industry,” said RealD’s President of Worldwide Cinema, Joseph Peixoto. “Exhibitors, if they had money to invest in interim solutions I think that they should contribute that to the digital rollout that’s upon us. I think everyone should not be distracted.”

“We agree that digital is and the digital transition is going to happen,” Ouri argued. “Frankly we’ve been supporting it longer than anybody on this panel. We spent more money on digital cinema starting with Disney in 1999. We continue to do so and we have a majority of market share for mastering and distribution. This is not meant to compete or replace the digital rollout or delay it. It is meant to address the screens that otherwise would run what could be a 3D film on a 2D film screen today. It’s grading the 2D film screens to be able to show 3D to more consumers in a way that’s affordable and available today.”

Chuck Goldwater, President of Cinedigm‘s Media Services Group believes that exhibitors should be spending all of their pennies on digital cinema, rather than on what he sees as an interim solution. “You know you can only squeeze so much efficiency out of that. It’s like putting fuel additive in an old clunker when there’s new, more fuel efficient cars,” he said. “Exhibitors who want to make an investment instead of making an investment in their older film projectors can channel that investment into the first step for them of a digital conversation which is clearly the long term and exponential leap into the future.”

Ouri held his ground and even provided some cursory financial modeling for attendees of the conference. “The silver screen is an investment that is not a throw away, so it is a step toward digital,” he explained. “The payback, we estimate, is just one feature run. So they get one Disney movie and they payback all their costs. So we believe that’s efficient, not inefficient.”

“For those screens that for two to five years are not going to see digital the question is do we leave the consumers just experiencing 2D or do we give them an alternative?” he asked “It might be a distraction, but there is money left on the table by the studios and the exhibitors and frankly it’s not an insignificant number of dollars.”