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Insights from home entertainment industry experts. Home Media blogs give you the inside scoop on entertainment news, DVD and Blu-ray Disc releases, and the happenings at key studios and entertainment retailers. TK's Take analyzes and comments on home entertainment industry news and trends, Agent DVD Insider talks comic adaptations, and IndieFile delivers independent film news.

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November 20, 2009
Rosy Forecast for 2010

Could it be? Yes, I believe it is. Ladies and gentlemen, ahem, we have some, uh, good news for a change. It's hard to say that phrase, "good news." But it feels refreshing, uplifting, invigorating, even — as foreign to these ears as it may be.

The good news I am referring to is that Screen Digest, a respected industry analyst that's been tracking home entertainment trends and statistics for years, believes packaged media is in for recovery as early as next year. A surge in Blu-ray Disc sales, brought on by the proliferation of cheap players, will trigger a boom in software sales that will be big enough to more than offset any further declines in DVD sales (for the complete story, click here).

Now, I'm certainly not one to do any premature celebrating, not after the year we've had--a year that is mercifully coming to an end. But I do believe Screen Digest's rosy prediction is a valid one, because there seems to be a perfect storm brewing that just might blow the roof off previous Blu-ray Disc sales projections.

You've got prices for big hit titles falling below the $20 mark at major retailers from Wal-Mart and Best Buy to Amazon.com.

You've got brash new front-and-center Blu-ray Disc displays at Best Buy, Fry's and other big retailers.

You've got HDTVs in more than half of all U.S. households, and the growing realization among consumers that the highest-quality source of true HD entertainment is Blu-ray Disc.

And you've got innovative programs like the Disney-spawned combo pack, which lets consumers buy a Blu-ray Disc, a DVD and a digital copy all in one affordably priced package, and Warner's new trade-in offer, in which consumers can send in their old DVDs and get a new Blu-ray Disc for just $7.95 (plus shipping, which brings the total cost to about $13, still well below the cost of a new Blu-ray Disc movie).

What we need now is an industrywide education campaign that ties everything together. I'm talking ads and commercials with the message: "Go Blu. The best gift for your high-def TV is a high-def disc."

Who's going to take the lead on this one?

 

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November 17, 2009
Loss-Leadering Coming to Blu-ray Disc

My, my, how times have changed. Studio executives used to cringe at newly released theatrical DVDs selling for below $15 their first week in stores, generally at big discount chains like Wal-Mart and Target. The mass merchants were using DVDs as loss leaders to drive traffic into their stores, devaluing the product in the consumer's eyes and later coming back to the studios and complaining about margins. Studio executives were reluctant to lower wholesale prices, even though that's what their big retail customers wanted, and all of a sudden that taboo word that's not supposed to be discussed in public — pricing — was on everyone's tongues.

Now, we're finding loss-leader pricing has come to Blu-ray, a year before anyone expected it to. Wal-Mart and several other mass merchants are advertising, and selling, hot new Blu-ray Disc releases for less than $20 — and this, mind you, is before Black Friday, when we traditionally see the lowest prices all year for everything from digital cameras and computers to kitchen sinks (I mean that literally).

Studio executives, frankly, don't know what to think. They're stunned to see it happening so soon, and worried that in the future not only will their visions of incremental profits fade away faster than those visions of sugarplums we keep hearing about each Christmas, but that retailers will start pressuring them for lower wholesale prices and, before you know it, Blu-ray Disc will suffer the same price erosion that plagued DVD within several years of that format's launch — something studio executives have vowed to not let happen again.

While I was among those decrying the race to the bottom in DVD pricing, in this case I'm singing a different song. With apologies to the Beatles, "Let It Be." Given the economy and the slump in DVD sales, we had better do something quick to pick up the slack and take Blu-ray Disc to the masses — and there's nothing better than making the format affordable to everyone, particularly when low-end Blu-ray Disc players are expected to sell for as little as $75 come Black Friday and even final-spec players should be available in the low $100s.

If you think about it, the fact that Wal-Mart and the other mass merchants are using Blu-ray Discs as loss leaders is a tremendous vote of confidence in the format. It means they believe Blu-ray Discs are hot enough to lure people into their stores, as long as the prices aren't out of whack with what they're used to paying for DVDs.

Sure, down the road we might moan and groan about "leaving money on the table" (one of Hollywood's favorite laments), but in this economy, when more and more people are going back to their old habit of renting movies instead of buying them, we need to do something, anything, to get people back in the habit of buying and collecting movies and TV shows.

Let's worry about the potential fallout later. If we don't get Blu-ray Disc to the masses now, regardless of the price, there might not be a later.

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November 10, 2009
Blu-ray Disc, Front and Center at Retail!

Best Buy EVP Mike Vitelli's admonition at Blu-Con 2.0 that we'd better do everything we can to take Blu-ray Disc to the masses, and do it now, seems to be a fourth-quarter battle cry for retailers across the board.

Wal-Mart is finally selling certain newly released Blu-ray Discs for less than $20, about the same as the DVD, and probably taking a loss just to use the format as a lure to drive traffic into stores--the same approach the giant discounter took with DVD nearly a decade ago.

Best Buy has remerchandised certain "lab" stores to put Blu-ray disc software right up in front, taking the place of music CDs, which have been unceremoniously shuttled to the back. I walked into the Best Buy near my home in Carlsbad, Calif., and was surprised at how prominent Blu-ray had become--and what a neat fit it was with the store's existing blue color scheme.

And on a trip last week to the Fountain Valley, Calif. Fry's Electronics to buy a new digital camera, I almost tripped over the huge racks of Blu-ray Discs positioned between the entrance and the checkstands, a long row of high-def discs at unbelievably attractive prices.

Retailers seem to be finally getting it, realizing both the promise and the potential of Blu-ray Disc to be DVD, all over again. True, DVD's fast ascent was triggered by a far superior visual and audio experience, but Blu-ray has the same advantage over DVD that DVD had over VHS. Maybe it's an advantage that's only recognizable on an HDTV, but everyone's getting a high-def TV these days--and regardless of what the cablers say, Blu-ray disc remains the only way to bring TRUE 1080p high-definition into the home, a fact I believe is slowly but surely beginning to sink in with the public (remember my Richard the Plumber blog posting from a few weeks back?).

That's why I am so befuddled by yet another story in the mainstream media, this time in the Los Angeles Times, that is headlined "Discs Facing Ejection: As CD and DVD sales sink, Best Buy plans for a future when it stocks fewer hard copies while pushing downloads." The premise of the story is sound: retailers are looking at ways to capitalize on digital downloading. But the execution left me scratching my head and wondering what universe authors Ben Fritz and Dawn Chmielewski are living in.

The article paints a rosy, glossed-over picture of both the current state of downloading (no one's doing it because it takes too long, it's too complicated and the quality isn't there) and the inherent differences between music and movies (we buy music by the song, which is why downloading took off so quickly; we buy movies, well, by the movie, so why spend $20 and two hours downloading a movie when you can buy it for $15 at Wal-Mart?).

The article also completely ignores the fact that the same retailers experimenting with digital downloads are the ones giving Blu-ray Disc a massive push, and that the state of the home entertainment industry is actually quite healthy, with consumer transactions up nearly 7%, year over year. Indeed, Blu-ray is conspicuously absent from the entire article, which keeps referring to the slump in CD and DVD sales but says nothing about the dramatic year-over-year gains in Blu-ray Disc sales.

Oh well, I guess that's why we exist. Trade journalists and trade magazines that cover the business, that know the business and that understand the business. That puts us in a prime position to give everyone a fair shake, and to report what's really going on out there.

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November 05, 2009
Best Buy's Code Blu

Best Buy's Mike Vitelli waxed philosophical at Blu-Con 2.0 when he said the chief obstacle to Blu-ray Disc going mainstream is the gap between consumers' awareness of the format and their familiarity with it. The two are hardly the same, he pointed out, noting that while just about everyone has heard about Blu-ray Disc a surprisingly large number of people still don't know much about. Citing anecdotes related to him by store personnel, he told a rather sobering tale of ignorance, with many people still thinking all they need to get true high-def out of their DVDs, and DVD players, is to hook them up to their high-definition TVs.

Education certainly is key, but first you have to get people to want to learn. And that's where pricing and portability come in. Blu-ray Discs may be sexy, but we have to level the playing field before anyone's going to initiate a courtship. Specifically, he was talking about price and portability.

All right, let's talk about price. I remember when Blu-ray Disc was launched and everyone was hoping for a $10 premium. "We're not looking for a replacement technology," one studio president told me at the time. "We're looking to grow the business." Well, those dreams went right the door when the economy tanked, and with a DVD purchase slippage of nearly 14% so far this year a "replacement technology" that will stop the slide sounds perfectly OK to my ears. The bottom line is that we simply cannot expect consumers who for years have been able to buy any new DVD release for around $15, at least its first week in stores, to shell out twice as much for a Blu-ray Disc. Bring the price of a new Blu-ray down below $20--heck, $19.99 sounds just fine--and you're in business, particularly now that player prices are under $200 (for a good one) and even under $100 for some cheapo models.

But that's only half the equation. When DVD was launched, the DVD player replaced the VCR n the home. Sure, you might have had a second VCR in the bedroom, but that was about it. Today, we've got DVD players everywhere--in the car, in each bedroom, even on the plane or train (courtesy of your laptop computer). There are way more players out there than ever, and Blu-ray Disc, unfortunately, is still pretty much home-bound. The computer industry has been slow to include Blu-ray Disc drives in their new computers, and I have yet to see a commercially available Blu-ray Disc player for my car--at least one that I can afford.

Put these two factors together and the combination is a tremendous roadblock to Blu-ray Disc's advances. You're being asked to pay more for something that's a lot more limited in terms of where you can play it. As Vitelli said, consumers walk into a store and have to make a choice: Blu-ray Disc or standard DVD. Even if they have a shiny new Blu-ray Disc player in their family room, they may ultimately opt for the DVD because they can play that DVD anywhere and everywhere.

As a parent with a yen for long road trips, I understand what Vitelli's saying. I am absolutely wowed by Blu-ray Disc and its superior picture and sound. If I could, I'd toss out all my DVDs and go completely Blu. But only one of my three kids could then watch the film in his own room, on his PlayStation 3. And our road trips would be endless bouts of the alphabet game or "I Spy."

We, as an industry, have to aggressively attack the two Ps standing in the way of Blu-ray going mainstream. Actual selling prices have to be lower, crossing that psychological $20 barrier. And we need to put the pressure on CE and computer companies to go Blu in everything they do.

At this point, I am convinced that Blu-ray Disc's ultimate success is inevitable. But how long it takes to achieve that success--well, to a large degree, that's up to us.

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November 03, 2009
Blu Tuesday

I'm up in Beverly Hills today for Blu-Con 2.0, the industry conference and Blu-ray Disc showcase that is being put on by DEG: The Digital Entertainment Group, along with Home Media Magazine (in lieu of our annual Home Entertainment Summit) and several other trades. Our editor in chief, Stephanie Prange, is moderating one of the panels, and I'll be up on stage during lunch to present our annual Home Entertainment Visionary Award, which this year goes to...well, I'd hate to spoil it for you, so you'll just have to check back.

On another note, our magazine's annual TV DVD Awards contest is now in the consumer voting stage. Voting actually began yesterday and within an hour we had already tallied more than 1,000 votes. Join in on the fun by clicking here.

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