Valley firm seeks to change image of 3-D movies: new technology slow to click with theaters.

Michael Kaye and his company In-Three have developed a process that will change the way people look at movies but is faced with what he terms "the chicken and egg" problem.

To be able to show the 3-D movies the company can create from traditional 2-D digital equipment is needed but theaters are slow to make the switch because there is little product to show.

"It's a slow start-up," said Kaye, president and chief executive officer of In-Three, located in Agoura Hills. "It's an uphill battle because there are not enough screens for people to go to. But once it does, it will accelerate."

"We'll get passed that; every new technology gets passed that," added Steve Schklair, a partner in North Hollywood-based Cobalt Entertainment. "If you build digital cinemas it's a small incremental leap to 3-D cinema."

The new generation 3-D film may be in slow in coming with "The Polar Express" and "Chicken Little" being the most recent examples, but companies such as In-Three and Cobalt are positioning themselves for the day when not only feature films are widely available but also real-time sporting events.

UCLA Anderson School of Management lecturer Gigi Johnson called 3-D films "a nice novelty" but questions whether theater owners will want to pony up the expense to switch to digital equipment for what may be a limited number of films.

But Cobalt Entertainment's Schklair said the time is fight for 3-D to make a go for the public's attention because of changes of how the films are made and distributed.

"Digital gives perfect resolution," Schklair said. "Your eyes don't get tired watching these."

After making a big splash at the ShoWest 2005 entertainment exhibition trade show with the unveiling of its process to convert two-dimensional prints into three-dimensional prints, In-Three settled in to move on to what Kaye called phase two: getting additional funding.

In-Three is currently looking for investors who can provide capital in amounts that the company cannot handle so it can eventually release multiple movies a year.

"We wouldn't want to partner with a studio or anybody like that," Kaye said. "They would likely have their own agenda and want to be exclusive."

Bringing in an outside partner is a move that Schklair has already made, selling a percentage of the company to the investment firm headed by Art Modell, former owner of two NFL football teams.

Schklair had worked with Modell's son John on previous projects, including using Cobalt's 3-D cameras to film the Super Bowl in 2004.

"Taking on a partner is a bigger deal than getting married," Schklair said. "We trust each other. We've worked together long enough to know there are no surprises."

There are three sides to 3-D filmmaking: the content, the technology, and the distribution.

Schklair creates his own content--he spent last year filming Irish rock band U2's tour through South America for a feature film--and his own camera equipment and software so that 3-D films can be made in real time. Kaye and In-Three developed active eyewear in partnership with Nu Vision to view its 3-D product.

Kaye said he has "one major filmmaker" who has signed on the dotted line to create films using In-Three's process, and others with their hand on the pen.

As for the distribution of feature films, makers of 3-D films have to wait as companies such as Technicolor, based in Camarillo, Christie/Access Integrated Technologies and Real D make deals to get their digital projection systems into more theaters.

Technicolor has ambitious plans to get its digital equipment into 15,000 theaters over the next decade. Out of 36,000 indoor movie screens in the U.S., only 200 are now equipped to show digital films, according to the National Association of Theater Owners.

In addition, large electronic manufacturers are developing 3-D monitors for home use that will eliminate even the use of glasses to watch content, Schklair said.

If there is a fourth side it could be the public's perception--or perhaps misperception--of what the new generation of three-dimensional films is about.

Getting a headache from wearing 3-D glasses will be a thing of the past when the films are done right, Kaye said.

"What they are used to is a documentary film maybe 50 minutes or an hour long," Kaye said. "They are not used to the "Chicken Little" kind of movie in a regular theater. They are not aware of the quality of work we do."

MARK R. MADLER Staff Reporter