Behind-the-scenes at Panasonic's Hollywood R&D facility - the birthplace of 3D Blu-ray

I'm standing before a cinema screen some 13m tall. Avatar is playing in 3D; Jake Scully has just landed on Pandora. But this is no regular movie screening. One half of the image is coming from a 3D Blu-ray disc, the other from the original digital source material. The Blu-ray is being played on a domestic player through a digital cinema projector. Astonishingly, there appears to be no discernable difference between the two sides.

Even the engineers working here at the research and authoring facility known as PHL (Panasonic Hollywood Laboratories) are not sure which is which. 'The 3D Avatar Blu-ray is as close as it's possible to get to the original experience in a theatre - that's not our words, they came from Mr Cameron himself,' says facilities director, James Mercs, with pride.

Located within walking distance of Universal Studios, PHL is where the encoding system behind full HD 3D Blu-ray was developed and it's here that some of the most impressive examples of the technology are being created. If 3D Blu-ray has a heart, you'll almost certainly hear it beating here.

Innovative tech
Regular readers will know that there hasn't exactly been a deluge of 3D material on Blu-ray. However, there's every indication this will change. Estimates vary on global 3D TV penetration, but most pundits predict a steep climb as the feature becomes ubiquitous on TV screens. By 2013, the number of 3D sets sold worldwide will vary between 27 and 46million, depending on which industry analysts you believe.

Arguably the most compelling, if elusive, example of 3D Blu-ray we've seen to date is Avatar; it's a fabulous example of just how immersive full HD 3D Blu-ray can be. Of course, unless you buy a Panasonic hardware bundle, or pay serious bucks on eBay, you won't be able to get a copy - at least until February 2012, which is when the brand's exclusivity deal with Fox Home Entertainment runs out.

Masayuki Kozuka, head of R&D for Panasonic's Media and Content Alliance office, explains to me that Panasonic found itself in a bidding war with Samsung to obtain the Avatar rights, and that the conditions of the deal were largely driven by Fox. 'Studios come to us and ask if we want to take exclusive deals. We don't usually go to them,' he confides. Kozuka adds that Panasonic is not particularly looking for anymore long terms deals. 'The market is more mature now, but during 2010 there was little software. We needed an incentive.'

In addition to Avatar 3D, PHL has also authored Disney's A Christmas Carol 3D, Ice Age 3D and Coraline 3D. More are in the pipeline, but PHL is no conveyor-belt authoring house. It's for showcase material only. Some of the biggest names in cinema often pop across from nearby backlots to talk through projects and technology.

'One of our main goals and one of our core guiding principals is to bring the theatrical experience into the home,' says director Jeannine Patton. 'And it's that philosophy which drives a couple of key objectives: one is to create the ultimate HD master quality, innovate with new interactive features and improve the overall consumer experience. And the other is to take a very active roll in assuming a leadership position in format standardisation and accelerating the widespread adoption of new HD formats for home entertainment.'

Deciding standards
The role of PHL in the development of Blu-ray shouldn't be underestimated. Panasonic opened the facility in 2001 as a research and development centre for all things hi-def. Five years later the emphasis shifted to Blu-ray.

It was here, in PHL's cinema-sized screening room, that the battle to decide the codec for the format was waged. In 2006, key power-players from the main Hollywood studios met to debate the various options, so that they could decide which one to throw their weight behind.

Yoshiichiro Kashiwagi, a senior researcher at PHL, remembers the day well:  'There was a big debate about which codec should be adopted for Blu-ray,' he recalls. 'At that time there were two candidates, MPEG2 and MPEG4/H.264 AVC Main Profile. We gathered the Hollywood professionals here in this theatre for an evaluation meeting. At the time, it was felt that MPEG2 was better.' Kashiwagi concedes it was probably the right decision at the time. 'MPEG4 wasn't as good as MPEG2 in terms of fine detail reproduction.'

The first commercial BD were duly released, although their critical reception was far from rapturous. Kashiwagi and his team hunkered down to refine their MPEG4 proposal some more. A year later, the studio brass were reconvened to consider a third option: MPEG4/H.264 AVC High Profile, a new codec designed from the ground up for Blu-ray. Suddenly, Hollywood's chiefs were confronted with a consumer format virtually indistinguishable from their source material. It was a revelatory moment for everyone. Kashiwagi says that MPEG2, even at 25 or 30Mbps, didn't look as good as the source material, 'but with AVC High profile, encoded at 21Mbps, it was almost identical.' The move away from MPEG2 was rapid. 'AVC became the mainstream video codec worldwide, even being adopted for broadcasting.'

'The next step was the adoption and development of 3D within Blu-ray,' explains Mercs. 'For us it was a logical follow on from the excitement that was the theatrical 3D experience.' In surprisingly short order the Multiview Video Coding (MVC) extension to the H.264/AVC standard, also developed at PHL, was approved and adopted.

Taking it to the limit
Digital assets for content creation typically arrive at PHL on hard drives - regular, everyday external HDDs. First all the Content Creation assets are assembled - video and audio, subtitle data, menu graphics and Java content. Sound and vision is then encoded and the navigation and disc logic is tackled before everything is multiplexed together. A test platter then goes through a laborious verification stage, where it's tested on multiple consumer Blu-ray players. Once approved, the master is sent to replication.

It all sounds quite straightforward, but there is considerable art in the science. Painstaking encoding takes place within darkened authoring suites. Although a 50GB disc can handle plenty of data, great care needs to be taken of just how the bit budget for each title is allocated, if the end result is to be artifact free.

During a tour of the PHL studios, one of the engineers tells me: 'The final battle sequence on Pandora, at the climax of Avatar, pushes everything to the limit. Consequently we had to rein back the bitrate on some of the quieter, early scenes. The aim, of course, is to make sure that you can't tell where it's been done.'

Extreme outies
Elsewhere I get a chance to chat with PHL's stereographers. Responsible for ensuring that the 3D encoded on a disc is comfortable to watch, they can literally adjust the level of depth you get on a 3D disc with a few slider controls. Decisions made at this point determine if an effect sits on the screen plane or pops out for an extreme 'outy' moment. Interestingly, they confirm that the 3D experience in the home and the theatre won't always be the same: 'Yes, a 3D movie on disc can look a little different from that same movie seen in theatrical 3D. The extent of the effect can be down to the stereographer working on the project, or the cinematographer and director if they are overseeing the authoring.'

Naturally 3D isn't for everything, but when it works well it can be jaw-dropping. By way of an example, I watched a short 3D CGI anime movie called Cyborg 009: The Reopening. This showreel is intended to garner funding for a full-length version, as well as highlighting the potential of the format. The film runs for just four minutes but leaves everyone awestruck.

The heart of 3D Blu-ray has just begun to beat a little faster...