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The movie business is not in as much trouble as some other businesses. Higher ticket prices mean that the take from the box office is healthy, although fewer people are going to the movies. They're staying home to do stuff like play videogames or surf the Internet. The studios are looking for a game-changer, no pun intended, and as NPR's Kim Masters reports, they're hoping they will find it in 3D movies.

KIM MASTERS: Jeffrey Katzenberg runs DreamWorks Animation, which brought you "Shrek" and "Madagascar." But when he had his aha! moment in 2004, he was watching a Warner Brothers movie.

(Soundbite of move "Polar Express")

Mr. TOM HANKS: (As Conductor) Well, you coming?

(Soundbite of steam-engine train)

Mr. PETER SCOLARI: (As the Lonely Boy) Where?

Mr. HANKS: (As Conductor) Why, to the North Pole, of course. This is the Polar Express.

(Soundbite of train horn)

Mr. JEFFREY KATZENBERG (Chief Executive Officer, DreamWorks Animation SKG, Inc.): I walked out of that theater, I came in here the next day, and I said, our lives are going to be forever changed because this is the future for us.

MASTERS: And not just for DreamWorks Animation, he believes, but for movies generally. Katzenberg sees this as the third great revolution in the history of film.

Mr. KATZENBERG: The first is when movies went from silent films to talkies, and the second is when they went from black-and-white to color. And I believe what we are facing as an opportunity today is as great as either those were. And in less than a handful of years, I think you will start to see the vast majority of movies will be made and shown in 3D.

Mr. MIKE CAMPBELL (Chief Executive Officer, Regal Entertainment Group): It's something I believe is a needle mover.

MASTERS: Mike Campbell runs Regal Entertainment Group, which operates the largest theater chain in North America. He says 3D is already attracting people to theaters, and they're willing to pay a premium for tickets. But he doesn't quite share Katzenberg's conviction.

Mr. CAMPBELL: I think you have to have, you know, the ability and the time for the audience to adjust, and whether they get to the point where everything is demanded in 3D or not, who's to say?

MASTERS: Few of Campbell's theaters are equipped for 3D, and that's because of money. It costs a lot to convert to digital projection, and the 3D equipment adds to the tab. Theater owners say studio should pay, at least for the basic digital setup, because studios will save millions per movie when they no longer have to make prints. The studios are finally beginning to agree, and Katzenberg says theater owners are starting to see that they should help pay for upgrades, too. He says 3D offers an immersive experience, and theater owners need to compete with what you might have in your living room.

Mr. KATZENBERG: Flat-screen TVs, high-definition, Blu-ray, stereo sound, I mean, you know, what you can see and you experience in your own living room today is unbelievable compared to 10 years ago.

MASTERS: But many doubt that 3D will ever become a standard. Among them is an ardent fan of the technology, Daniel Smith. He works in visual effects and has a blog called 3Dfool. He says 3D should be used only when it's appropriate, not for cheap visual tricks, but to draw the viewer into a magical world, as it did in that 3D version of "Polar Express."

Mr. DANIEL SMITH (Freelance Visual-Effects Artist; Blogger, 3Dfool): That was a much superior film in 3D than it was in 2D.

MASTERS: If every story is told in 3D, he says...

Mr. SMITH: It loses its specialness. It loses its freshness.

MASTERS: Smith thinks most films won't have a reason to be made in 3D, and many filmmakers won't have the budget to tell stories that way. Katzenberg says similar arguments were made with the advent of sound and color.

Mr. KATZENBERG: There were doubters. There were debaters. There were people that thought that they were gimmicks, fads that would come and go, they'd be the hula hoop. They weren't.

MASTERS: In the year ahead, two big 3D events are on the horizon. Katzenberg's animated film, "Monsters Versus Aliens," opens next spring. James Cameron's highly anticipated science-fiction film, "Avatar," arrives in December 2009. Katzenberg believes there will be more than 5,000 theaters ready to show "Avatar" in 3D, but Mike Campbell thinks it will take several years to get to that number. He expects his chain, the biggest in the country, to have about 1500 of its theaters converted over the next three to four years. Kim Masters, NPR News.

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