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Blu-ray Disc Association: Disc Still Rules

4 Sep, 2008 By: Chris Tribbey

DENVER — According to Blu-ray Disc proponents, detractors like to say that video on demand and digital downloads will kill physical high-def product, that winning the format war with HD DVD and giving consumers one high-def choice is meaningless.

“I’m fond of recalling the old visions of the past that the paperless office would completely obliterate the need for paper,” said Andy Parsons, SVP of advanced product development at Pioneer Electronics and chair of the Blu-ray Disc Association promotion committee in the United States. “It seemed like a very reasonable, logical prediction decades ago that turned out to be completely wrong.”

At a luncheon during the CEDIA Expo Sept. 4, Parsons, several heads of major studio home entertainment divisions and leading Blu-ray experts ran through the numbers, aiming to prove the detractors are off base.

So far about 15 million Blu-ray Discs have been sold, according to Home Media Magazine market research. Thus far in 2008, 8.8 million Blu-ray Discs have been sold, compared to 5.6 million in all of 2007. With Adams Media Research noting that about 60% of all software sales occur in the fourth quarter, optimism is high among studio executives that 2008 will end well for Blu-ray.

“We always use content sales as a great barometer for how we’re doing,” Parsons said. “It’s a very pure number. It’s something real we can look at, and there’s no spinning it.”

On the hardware side, Global Media Intelligence (GMI) shows that for Blu-ray standalone players, Blu-ray is behind DVD compared to the first few years of the DVD format, in terms of household penetration, with 6.5 million players sold in the United States and 5.5 million in Europe.

GMI predicts that by 2011, all forms of electronically delivered video will still only account for roughly 5% of theatrical and home video revenue.

The numbers don’t lie, Parsons said, and the numbers are putting smiles on the faces of studio executives.

“The two can coexist,” said David Bishop, president of Sony Pictures Home Entertainment, about physical and digital media. He added that with studios including digital copies of movies with Blu-ray, they’re giving consumers everything they could possibly want.

“[Digital copy] enables us to have movie or TV content more broadly distributed,” he said. “In terms of ease of use, it’s still skewed toward physical media.”

Steve Feldstein, SVP, corporate and marketing communications, 20th Century Fox Home Entertainment, said his studio is considering this fourth quarter the “first fourth quarter” for Blu-ray.“There are no obstacles, no mixed messages for consumers,” he said. “It’s all Blu.”

Chris Fawcett, VP of home video for Sony Electronics, added, “I’ve said time and time again, movie fans won when the industry unified behind Blu-ray. The thing we have to keep in mind is that the consumers aren’t as close to this as we are.”

Craig Kornblau, president of Universal Studios Home Entertainment, relayed a story that highlighted that fact, saying he was discussing Blu-ray with a friend last month. She was under the impression that a format war was still going on.

“Consumer education is critically important, still, for our growth as an industry,” Kornblau said. “It’s a very exciting time for us as a studio, and for all of us as an industry. We’re spending a lot of time and money to see what consumers want.”

Universal had backed HD DVD before the war ended in February, and Kornblau said his company learned much working with Toshiba that’s helping the studio with Blu-ray.

“It’s going to be an interesting fourth quarter,” he said. “If [household] penetration explodes the way we hope, you might see a lot of these titles we’re considering for Blu-ray released a lot quicker than expected.”

Bob Chapek, president of Walt Disney Studios Home Entertainment, said everything is going according to his studio’s Blu-ray plan, namely the end of the format war, retailers rallying behind Blu-ray with shelf space and sales education.

“You’re going to see a landslide of great content now in the fourth quarter,” he said. “It’s now about penetration, proving that Blu-ray is the complete DVD replacement.”

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