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April 17, 2013

UltraViolet Just Got Smarter — and Easier

At last, some action on the UltraViolet front.

What I consider the best idea to come out of Hollywood in years has been stalled of late, mired by a complicated operational structure.

The concept — buy a movie once, then access it from the cloud anywhere, at any time, on any device — is marvelous.

The execution — navigate through a maze of proprietary websites and registration requests — is marvelously flawed.

But as Mark Teitell, GM of UltraViolet’s Digital Entertainment Content Ecosystem (DECE), tells us in our April 15 6Q feature, we shall soon have a new mechanism that strips away the complexity of UltraViolet and actually makes it simple and easy for consumers to use.

The UltraViolet Common File Format (CFF) will make downloading functionality consistent across all UltraViolet retailers and service providers. As Teitell told our senior reporter, Chris Tribbey, “It empowers consumers to transfer or copy downloaded files on any UltraViolet-compliant device or app, without re-downloading or using bandwidth.”

DECE is currently in a beta and interoperability testing stage for CFF deployments, and the final product is expected to become available in the United States later this year.

That’s a critically important development — even more important to the mainstream success of UltraViolet than the stepped-up marketing push Teitell promises also is around the corner.

Years ago, colleagues used to joke about what they called the “People magazine” syndrome. What was hot one week was not the next.

Since then, our attention spans have gotten even shorter. It truly is the “one click” era, where we expect new worlds to open to us with a single click of a button.

We don’t want to be told that for this movie we have to go to this website, while for this movie we have to go to another.

We want it simple, and we want it now.

Once CFF is available, there’s only one more sticking point left for UltraViolet: Get Disney on board. It’s high time the studio joined the consortium and made its movies available through UltraViolet.

Sitting out on a transformational opportunity such as the one presented by UltraViolet makes no sense, and I sincerely hope Disney comes around and joins the party.

It will be good for Disney, and it will be good for the industry.

Even more importantly, it will be good for the consumer.

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March 21, 2013

It’s Going to Take a Village to Save This Business

The most interesting thing about consulting firm Deloitte’s latest “State of the Media Democracy” survey is that soaring tablet use will drive an increase in movie rentals at the expense of sellthrough.

According to Deloitte, 28% of survey respondents said they would rent a movie this year, while just 12% said they would buy one, either on disc or through a digital download. At the same time, tablet ownership shot up 177% over the past year, with tablet owners 70% more likely to stream movies than those who don’t own an iPad or similar device.

The conclusion that there’s a correlation certainly strikes me as a valid one. And for studios that continue to rely on sellthrough for the bulk of their daily bread, this is, indeed, cause for concern. Hollywood throughout the years has done everything in its power to pump up the sales market. Back in the early days of home video, they fought tooth and nail against the nascent rental industry, which the studios correctly charged was taking money out of their pockets.

The Walt Disney Company’s much-ballyhooed moratorium strategy put dollar signs in everyone’s eyes as they realized that consumers could, indeed, be induced to buy movies, and in huge quantities. But it wasn’t until the advent of DVD in 1997 that the studios finally came up with an insurmountable weapon that ignited the sellthrough market quickly and furiously — and ever since the market peaked in 2005, they’ve been trying to figure out how to regain the momentum.

Since then, however, we’ve become a much more transient society. Our inherent nature to own, to collect, to hoard, has diminished. We lease cars instead of buy them; we read the news online instead of buying newspapers and magazines; and when we do buy things it’s products that enable us to do things, like smartphones and tablets, instead of products we can actually use on their own merits.

These days, the things we can do with smartphones and tablets are practically endless. The commercial of the couple spending every second of their day on matching Kindles is beginning to ring true: Our smartphones and tablets have become integrated in our daily lives. Heck, I see it with myself, a 55-year-old geezer who texts like a teen and goes everywhere, even the beach, with his iPad.

So for studios that still, more than anything else, want to sell content, what’s the solution? As I’ve said many times before, we need to find some way to sync the consumers’ desire to watch movies with our desire to sell them. I’m convinced UltraViolet is the best way to achieve this, but it’s still way too complicated — and the fact that Disney isn’t on board is having a real chilling effect on its immediate potential.

It takes a village to raise a child? Heck, it’s going to take a village to save this business — all of us, working together and putting all our focus on understanding the consumer and his wants, needs and desires.

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January 29, 2013

Kevin Tsujihara: A Wise Choice for Warner CEO

Kevin Tsujihara’s selection as the next CEO of Warner Bros. didn’t surprise me in the least. As the studio’s longtime head of home entertainment, he’s proven that he knows how to make money. Home entertainment is still the biggest source of revenues to the studios, and Warner Bros. has been tops in market share since even before I began writing about home entertainment more than two decades ago.

But Tsujihara’s selection was not just a matter of dollars and cents — not by a long shot. In a Hollywood ecosystem where imitation is not just the sincerest form of flattery, but a way of life, Tsujihara has always been a maverick. He’s not only stood out from the home entertainment pack, he’s inevitably stood out ahead of it. He’s earned a reputation as a deliberate disruptor who’s never been afraid to try new things and if they don’t always work out the way he had hoped, well, that’s OK, let’s move on to something else.

And yet he’s not so much a gambler, a risk taker, as he is a shrewd and savvy entrepreneur — albeit one who has learned to operate in a corporate environment. He’s a leader of the pack who also happens to work and play well with others.

Tsujihara doesn’t so much roll the dice on emerging and even future technologies as he plays the field, carefully picking and choosing what he considers to have the best chance at success. He’s not looking to transform the business so much as he is out to reinvent it, rebuild it — in a sustainable way. And if one accepts sustainability as Hollywood’s true holy grail, then Tsujihara’s real trump card is twofold: He’s got the vision to see what lies ahead, and the courage, guts and acumen to follow through and get us there, in some way or another.

Tsujihara pioneered the concept of day-and-date video-on-demand. He was one of the first to recognize the power and potency of social media by first selling movies on Facebook and then spearheading the acquisition of social movie fan site Flixster. His latest triumph is still a work in progress: leading the industry charge to UltraViolet, a critically important next step in the ongoing evolution of home entertainment that allows customers to acces digital versions of their purchased content from the cloud.

UltraViolet at once future proofs physical media and creates a whole new business model for electronic sellthrough, which has been a slow go for the Hollywood studios.

Many observers have already said that in choosing Tsujihara as their next CEO, Warner Bros. board members made the best choice. In truth, they made the only choice if their studio — and others like it — are to survive, and even thrive, in the digital era.

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August 09, 2011

Rest In Peace, Maria LaMagra

I’m still reeling with shock and sadness at the death a few days ago of Maria LaMagra, the veteran home entertainment publicist who spent more than a decade running the PR show at Universal Studios Home Entertainment and then went on to become a successful PR consultant and independent contractor for Walt Disney Studios, Sony Pictures and others

So often, when people die, those of us who are left say something along the lines of, “She left us too soon. She was so full of life.”

In Maria LaMagra’s case, this isn’t just another platitude. It’s God’s honest truth. Maria didn’t observe life, nor did she merely live life. She took life by the shoulders and shook the bejesus out of it, and made it do her bidding.

Come to think of it, she did that to all of us.

Maria LaMagra was the diva of the Hollywood publicists when I joined what was then Video Store Magazine in 1991 and she was still the diva of Hollywood publicists when she died after a brief battle with cancer.

Her family put out a statement saying she was 66 when she died. Maria would have killed them. We all thought she was at least a decade younger. After a certain point, you see, Maria LaMagra stopped aging and became, well, ageless.

I’ll never forget her raspy voice, her loud laugh, the way she would throw back her head when she laughed, those expressive eyes, the way she carried herself, her sense of fashion and style, that aura of self-assuredness she always projected. And her approach – well, let’s just say Maria LaMagra was not from the Subtle School of Publicity. She emailed and then she phoned; she phoned and then she emailed. And she kept doing it, over and over again, until a journalist had no other choice than to say “yes.”

She was, as rocker Dave Edmunds would say, “subtle as a flying mallet.” When Maria LaMagra walked into a room, she owned it. She was loud, no question – and yet her heart was even bigger than her voice.

I’m half expecting a phone call, chastising me for putting her age in print – and asking me for one last favor, for a client, of course. Just six weeks before she died, she was at the EAA’s Wine & Wisdom event at the Skirball Center – clearly ill, but still a big, overwhelming presence. I was on vacation, but our editor in chief, Stephanie Prange, was there and talked to Maria.

The last thing she said, as Stephanie was preparing to leave: “Tell T.K. he still owes me a write-up on Smore Entertainment.”

If there’s a heaven, I can only imagine Maria up there right now, that loud laugh echoing through the clouds as she tells God and his angels what to do.

               

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May 04, 2011

Disc Sales Enter Era of New Reality

So what’s really going on here? The news that Osama Bin Laden had been killed put everything else on the media’s back burner, including the Southern tornadoes and, of course, our own industry report on first-quarter sales and rental numbers. The few stories that did surface blew right through the box office correlation – disc sales were down 20%, while the collective box office earnings of those films was down 25% —  and jumped right back into their “discs are dying” mantra.

“Down, down, to obsolescence town – that might just be the broad-view takeaway from Los Angeles-based Digital Entertainment Group's recent sales report, which suggests new DVD sales in the U.S. plunged 20% over the past 12 months,” said Time magazine.

"Disc sales drop 20% as streaming video begins to take over,” observed USA Today.

And a blog posting in PC World proclaimed “DVDs are one step closer to extinction.”

Most stories reported the decline in box office value, as well as the absence of the Easter holiday shopping season in the first quarter of 2011. But no one gave either of those factors any credence, and why should they? It didn’t fit in with their preconceived notion that the disc business is dead.

The truth is, box office is very much a factor in the home video business, especially now that the business is primarily sellthrough. Back in the old days when rental dominated, mediocre theatrical performers tended to perform better on video, but these days, there’s a direct connection, and one that makes sense – if you’re not going to spend $10 to see a film in the theater, you sure aren’t going to plunk down $15 to own it.

The advent of Netflix and Redbox may have triggered a resurgence in rental, and here the old formula still works: total consumer spending on rental rose slightly, even with the down box office.

That said, we are seeing a new reality in disc sales. The novelty of being able to own every movie the day it comes out on home video, at an affordable price, has worn off. We as a society now realize we don’t want to own every movie that comes out, even if it’s priced at $15, or $10, or even $5. We simply don’t have the room.

And in the children’s animated category, the new reality has hit harder than practically anywhere else. Whereas in the past the video-to-theatrical ratio was in the high 60s and even low 70s (meaning an animated feature film that grossed $300 million in theaters could be expected to generate, on average, about $200 in consumer spending on disc sales), the VTR now is down to the low 30s.

Children’s titles are still inherently more “ownable” than most films, but the competition for 8-year-old eyeballs has gotten increasingly intense. There’s YouTube, Club Penguin, hundreds of game apps for Dad’s iPhone, and more.

As Francois de La Rochefoucauld, the famous French author of maxims and memoirs, once said, “The only thing constant in life is change.”

 

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April 20, 2011

Show Me the Money

Granted, the latest disc sales numbers for the first quarter, which should be released later this week, don’t look good. And the barrage of media reports alleging that the packaged-media business is on the ropes seems to be intensifying, with even the movie-biz website The Wrap calling the DVD business “dying” in a story today.

But once again, I need to plead with everyone to stomp on the brakes. Packaged media may no longer be Hollywood’s bread-and-butter, as it was beginning in 2001, as DVD transformed us all from movie renters into movie buyers. But it is still the dominant method we use to consume entertainment into our home, and in all likelihood will remain so at least for the foreseeable future.

An NPD Group study released earlier this week put things into perspective: Consumers may be talking about streaming and downloading movies, but when it comes time to take action they’re still plunking down their money for a Blu-ray Disc or DVD (to read the original story, click here). The study, conducted in March, found that nearly 80% of consumers watched a movie on DVD or Blu-ray Disc during the past 90 days, and that nearly 80 cents of every dollar spent on home entertainment goes toward the purchase or rental of physical discs. Respondents said 78% of their home video budgets went to the purchase and rental of Blu-ray Disc or DVD, including online and in-store retail purchases and rentals, while 15% was spent on video subscription services like Netflix. Digital video downloads, paid streaming, transactional VOD and pay-per-view accounted for just 8%.

I’d like to further point out that almost since the day this business began, we’ve been using the collective box office strength of movies available on home video to gauge the strength of the home entertainment business. And if you tally up what the movies that came to Blu-ray Disc and DVD in the first quarter of 2011 earned in U.S. theaters, and then compare that to the total for films issued on disc in the first quarter of 2010, you’ll find the drop in box office is virtually identical to the decline in disc sales.

Digital may be cool, sexy, hip, and with it. But to borrow a line from the movie Jerry Maguire, “Show me the money.”

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April 06, 2011

Dishing the Brand

With Dish Network buying Blockbuster Inc. at auction for a bid of roughly $320 million, the digital delivery sweepstakes is about to get a lot more intense.

Dish is in a three-way battle for consumer eyeballs — eyeballs attached to bodies that want to watch first-run movies without making a trip to the rental store, the supermarket or even their own mailbox.

On one front Dish is fighting satellite rival DirecTV. Both get to offer most new releases for “transactional” viewing the same day they come out on disc. Up until now, DirecTV has had the edge, both in subscribers (19.2 million to Dish’s 14.1 million, as of the end of 2010) and in marketing. When studios began holding back hot new releases from rental leaders Netflix and Redbox, DirecTV launched a media blitz crowing about the street-date availability of first-run movies from Warner, 20th Century Fox, and Universal Studios — as did Blockbuster, before it ran out of money. Dish was conspicuously quiet.

On another front, Dish is fighting the cable companies that are scrambling to launch and improve their own premium VOD channels.

And on a third battleground, Dish is squaring off against the telecoms, who also are engaged in a continual game of streaming one-upmanship.

How can the purchase of Blockbuster give Dish the upper hand? It all depends on what Dish does with its new acquisition. And surely, but surely, there is a plan. As David Berliner, a consultant at BDO Seidman LLP in New York who specializes in restructuring and insolvency issues, told the Bloomberg news service, “It doesn’t make sense to buy a melting ice cube unless you’ve got a plan to increase revenue.”

My hunch is that Dish sees the $320 million it is spending to buy Blockbuster as an investment in its digital future. Dish didn’t buy Blockbuster for the stores, or for the inventory. Dish bought Blockbuster for the brand, and will leverage the brand to position itself as the No. 1 source of VOD. I wouldn’t be surprised it a name change, to something like the Blockbuster Movie Network, is in the future. Imagine this: “Blockbuster used to be the place where America rented its videos. Now, Blockbuster is the place where Americans watch their movies—in the comfort of their own homes. The old Blockbuster did away with late fees. The new Blockbuster is doing away with stores, vending machines and even your mailbox — so your lazy ass never even has to leave the couch.”

I jest, of course. But only in part. Rest assured that the Blockbuster brand will live on, even if the stores don’t. The vending machines — yeah, I think they’ll stay, too, considering NCR Corp. owns and operates Blockbuster Express kiosks under a license agreement. Redbox still does an awful lot of business, and this way Dish has some skin in that game, as well.

Dish may also use the fact that Blockbuster went belly-up owing tons of money to the studios to its advantage. “Hey, Warner. Hey, Paramount. Yeah, we’ll pay you. But what about those windows, eh? I know we get some movies the same day they come out on DVD and Blu-ray Disc. But it sure would be nice to get everything …”

These next few months should be interesting.

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November 20, 2017

Industry Should Simplify UHD Awareness by Focusing on 4K Disc

As we get ready to shift gears from 2017 into 2018, we’re keeping one eye on digital sales and the other on Ultra HD Blu-ray Disc sales, both growth industries with lots of potential.

Movies Anywhere — to which I am hopelessly addicted, by the way — could be just what the doctor ordered to finally boost digital sales beyond niche-business status.

Ultra HD Blu-ray Disc, meanwhile, should be an easy sell to the legions of new 4K TV owners. 4K TV sales are soaring, and yet there’s a conspicuous lack of available content, particularly on the ownership side. New data from Futuresource Consulting projects 35% of global TV sales in 2017 will be 4K UHD … [but a] lack of 4K-compatible broadcasts and network programming is limiting 4K content distribution to subscription streaming video services such as Netflix, Apple, Google and Amazon Prime Video.

Now, I don’t know about you, but I’m still having trouble streaming regular HD. Ultra HD? Forget about it.

Compounding this inability to get UHD content is the fact that digital UHD movie sales can be a challenge, as well, with iTunes, still the biggest online seller of music and movies (with Amazon and Comcast nipping at its heels), apparently riding this one out.

According to the MacRumors website, “Apple has updated its iTunes Store on iOS devices and the Apple TV with plenty of 4K movies ahead of the launch of the Apple TV 4K, but has made clear in a recent support document that 4K content from Apple can be streamed, but not downloaded directly on a device. According to Apple, customers can download a local copy of an HD movie … but 4K movies are not available for download and thus can't be watched without an Internet connection. … That means customers who have had their previously purchased iTunes movies upgraded from HD to 4K at no cost can stream those movies in 4K, but can only download HD versions. Newly purchased content is also restricted from download.”

An Ultra HD Blu-ray Disc player, and a stack of discs, seems the perfect solution to this dilemma.

And yet Ultra HD Blu-ray Disc sales face their own set of challenges. According to the Futuresource report, high dynamic range (HDR), the enhanced visual technology that is one of Ultra HD Blu-ray Disc’s key selling points, “remains largely lost on consumers.”

According to Futuresource, the HDR concept is more difficult to relay to consumers than the more straightforward resolution improvements offered by simple 4K, even as those familiar with the technologies peg HDR as the main advantage that 4K has in elevating image quality above conventional high-definition. Without a universally accepted standard, the industry risks devaluing the HDR brand, as there are many poor representations of HDR that fail to demonstrate its effectiveness by offering little to no discernible improvement in image quality.

So what’s the solution? Promote and market the hell out of Ultra HD Blu-ray Disc! Minimize the technical jargon and adopt something that’s easier and simpler for the average Joe to comprehend. Stop trying to explain HDR and instead play up how much closer Ultra HD Blu-ray Disc brings us to the theatrical experience: “You’ll think you’re at the movies, except there’s no annoying guy two rows back who’s constantly yelling at the screen.”

As consumers move more and more into the digital space, the physical disc will continue to serve as a bridge, which is why the combo pack concept works well — especially if you can give consumers a trilogy of value: an Ultra HD Blu-ray Disc, a regular Blu-ray Disc and a digital code.

But just as importantly, the disc remains the optimum viewing platform, with a far better picture than even the best streamed UHD movie — if your system can even handle it.

All we, as an industry, have to do now is figure out how to get this point across to the consumer.

 

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October 30, 2017

Movies Anywhere Is a Locker I Can Get Into

I have a new morning ritual. While sipping my first cup of coffee (of two) and catching up on my email and the latest news, all on my iPhone, I now also invariably finish the movie I fell asleep watching the night before.

Yes, I am at that age where I begin to nod off well before the closing credits. And until just recently I would finish watching a movie the next night, before starting a new one. But thanks to my new ritual, I now start a movie every night, which by my estimation has increased the number of movies I watch by at least 30%.

What changed? The mid-October launch of Movies Anywhere, a remarkably simple and easy to use digital storage locker that lets me watch any film in my library with a couple of clicks on my iPhone button. All the major studios, except for Paramount, are participating, and the beauty of Movies Anywhere is that even for people like me who still buy Blu-ray Discs, entering the redemption code so I gain access to a digital copy takes just seconds — and then the movie is available on my iPhone, my TV, and anywhere else I have the app. (In fact, while writing this paragraph I just entered the code for Annabelle: Creation and watched it instantly appear on my iPhone. I will start watching it tonight — probably on disc, just out of habit — and then whatever I missed will be viewed in the early morning, with a Keurig cup of bold Sumatra, after the obligatory cleansing of emails and quick look at the news headlines.)

I have a confession to make. While I consider myself an early adopter, both because of my role in the industry and my natural curiosity and yen to be on the cutting edge of new and cool stuff, my digital movie experience has been limited to Netflix, Amazon and Hulu. I have never bought a movie online; I set up an UltraViolet account years ago but never used it, not even once. I keep writing that consumers value convenience, simplicity and ease of use, above all else, and I might as well have been writing about myself. I rarely make myself a salad, preferring the salad-in-a-bag approach. I vastly prefer Uber to taxis, and order most of my stuff online — even my Keurig coffee cups — because I hate waiting in line.

The problem was, prior to Movies Anywhere, watching digital copies of movies I acquired was too much of a hassle. There were too many sites to visit, too many passwords to enter, too many steps to take.

Movies Anywhere is as easy as watching Netflix. And that’s why I believe our studio friends have gotten it right this time. Sure, there are still hurdles to overcome — chiefly the other main driver of consumer behavior, the desire to get things for free or, at the very least, for as little as possible. It’s still going to be a challenge to convince consumers who are used to spending around $10 a month for unlimited Netflix content to fork over more than that for a single movie, regardless of how new that movie is, or how much hype it has generated.

Still, everything else is in place. The stage has been set for digital ownership to really take off, once consumers realize the value proposition of instant access — and immediate (or, in my case, morning-after) satisfaction.

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September 22, 2017

Putting Perceptions in Perspective

When it comes to home entertainment sales, victories are not what they once were, but that shouldn’t diminish a win. That’s why it is so important that we temper our perceptions with perspective.

The sales business, both digital and physical, is competing with an almost unbeatable proposition, from a consumer standpoint: gobs of movies, TV shows and original content for about $10 a month. First-run movies may be conspicuously absent from Netflix’s all-you-can-eat entertainment buffet, but consumers don’t seem to mind, particularly now that Netflix has ramped up its game with compelling original content that is so addicting that “binge watching,” with apologies to baseball, appears to be America’s new greatest national pastime.

I’m saying this as an introduction of sorts to our annual report on Ultra HD Blu-ray Disc, which all the studios are now supporting. Walt Disney Studios made the circle complete with its July announcement that Guardians of the Galaxy Vol. 2 would be its first release in the better-than-high-def format. But for those who are wondering why sales of Ultra HD Blu-ray Discs, 18 months after the format officially launched, still represent a tiny fraction of overall disc sales — the first-week record for a theatrical new release is 14%, set by Fox’s Alien: Covenant in August — let’s put things in perspective.

We’re in a different world than we were 20 years ago, when DVD first hit the market. Even then, DVD didn’t really gather traction until two years after its launch — and we need to keep in mind that DVD was the first format to make movie and TV show ownership both feasible and affordable. The novelty of being able to buy a movie for less than $20 just three months after it bowed on the big screen was a revolutionary thing; by the time Blu-ray Disc came around in 2006 the novelty of movie ownership, and collecting, had worn off, and even then-Disney home entertainment chief Bob Chapek opined that Blu-ray was evolutionary rather than revolutionary.

Since then, we’ve seen the rise of streaming and the emergence of digital ownership. In their first few months, Ultra HD Blu-ray Disc sales may have exceeded Blu-ray Disc sales, in the comparable period, but that simply isn’t sustainable. There are too many other entertainment options, most of them tied to the Internet, for disc sales to ever approach the magnitude of what they were in DVD’s heyday. The decline in overall disc sales over the past decade is somewhat misleading — in most quarters, Blu-ray Disc sales have held steady or even gained — but the total amount of money consumers are allocating to buying physical home entertainment continues to decline, and that’s a trend that will not only continue, but also accelerate.

Similarly, digital sales are making impressive gains, percentage-wise, but it is unlikely they will ever surpass, or even come close, to the money consumers spend on streaming, chiefly through Netflix. Subscription streaming plays into those two hallowed temples of consumer wants: simple and cheap.

But that’s OK. As an industry, we need to temper our expectations and celebrate our victories, no matter how small. When digital sales go up 10% in a quarter, we should be happy — and not moan and groan because the actual dollars are a fraction of what consumers spend that quarter on Netflix. Similarly, when the DEG releases its quarterly sales estimates, we don’t have to sulk because disc sales went down another 12%. Break those numbers apart and you’ll most likely see Blu-ray Disc sales numbers holding steady and Ultra HD Blu-ray Disc numbers soaring, compared to prior quarters.

For those of us who grew up with VHS rentals and then DVD sales, there’s no question that we’re living in a strange world, a changed world. We just have to adapt, both with our business models and with our perceptions.

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