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Studios Talk Windows, Amazon Talks Pricing, Everyone Talks Blu-ray at Blu-Con

2 Nov, 2010 By: Chris Tribbey

BEVERLY HILLS, Calif. — The studios’ home entertainment presidents had mixed news to share Nov. 2 at Blu-Con, the third annual Blu-ray Disc convention.

DVD sales are down 14% year to date, according to Ron Sanders, president of Warner Home Video and board president for DEG: The Digital Entertainment Group, which hosted the event. And the overall home entertainment business is still reeling from a rough economic climate, in which consumers have turned to rental over sellthrough in droves.

But Blu-ray sales are up 86%, and high-def disc is expected to generate $2 billion in revenue this year. To help push Blu-ray, the DEG and The Film Foundation are launching a joint initiative to promote both restoration of classic films and those re-mastered films on Blu-ray in a public service announcement. The PSA, which will appear on DVDs released worldwide, features directors Martin Scorsese and Clint Eastwood.

During the presidents’ panel, several studio executives said they have seen their 28-day rental windows with the likes of Netflix and Redbox result in a 10% to 15% jump in sellthrough for specific titles.

And when you look at everything — electronic downloading, streaming, disc rentals and sellthrough — Lionsgate president Steve Beeks noted: “The amount of money consumers are spending in their home to be entertained is at an all-time high.”

VOD numbers also have increased thanks to the 28-day rental window, more than one studio president said. Craig Kornblau, president of Universal Studios Home Entertainment, said the day-and-date VOD for Robin Hood resulted in 1.5 times the business “that equivalent titles have done historically,” and VOD for The Karate Kid performed well for Sony Pictures Home Entertainment as well, according to David Bishop, president of Sony Pictures Home Entertainment.

“I never would have believed the VOD numbers for Date Night,” said Mike Dunn, president of 20th Century Fox Home Entertainment. He also pointed to increased VOD and sellthrough numbers for Predators.

Sony Pictures' David Bishop, Lionsgate's Steve Beeks, Fox's Mike Dunn, Universal's Craig Kornblau and Paramount's Ron Sanders at the president's panel.

The presidents predicted that premium windows would open with higher rental prices closer to theatrical releases and that each studio would continue to play with windows as they examine the data from their 28-day window agreements. Sanders also hinted that the 28-day window “may be short” and the studios could revisit their agreements when they’re up for negotiations.

However, Dunn warned that by implementing too many windows for too many phases of a title’s release, the studios risk putting off consumers.

“If you slice the pie with too many slices, nobody’s satisfied,” he said. “We get the windows too fine, we’re going to have a problem.”

However, Kornblau argued that, “Now’s the time to try new things [with windows].”

Bishop said the $1-a-day Redbox kiosk model came during a “crazy economic situation,” and had no hard feelings toward consumers who latched onto the concept.

“That was an incredible proposition for the consumer to enjoy home entertainment at a much lower price,” Bishop said.

Regarding Blu-ray, Dunn said consumers have latched onto the Blu-ray category in 2010 like never before, with close to 20% of U.S. households owning a Blu-ray player, and the April Blu-ray release of Avatar passing the 8 million units sold mark worldwide.

“Avatar I think broke down the wall,” he said, adding his one wish was for another 10 million players to enter U.S. homes overnight.

The studios’ catalog titles, so far coming out on Blu-ray in a trickle, may be ready for prime-time in the near future, according to Kornblau.

“We’re just now getting to the point where we’re breaking through to the masses with Blu-ray,” he said. “We all have gems in our library. It’s really staggering when you think of the quality of titles [not out on Blu-ray].”

The presidents also discussed the status of UltraViolet, the buy-once, play-anywhere digital locker initiative being undertaken by the cross-industry consortium Digital Entertainment Content Ecosystem (DECE).

“If we can get this right, UltraViolet is the answer [for digital rights],” Beeks said.

Dunn added that the real benefit of UltraViolet will be cutting down on piracy, a problem that’s also exacerbated by consumers’ limited access to catalogue product, he said.

“The reality is the consumer wants the content when they want it, on the device they want,” Sanders said.

Amazon Talks DVD, BD Prices

Bill Carr, VP of music and video for Amazon.com, said that after a customer of his site buys their first Blu-ray, “Their total spending on both DVD and Blu-ray is four times higher than previous quarters.”

Carr said internal company data shows price is key in whether a consumer goes with DVD or Blu-ray. For example, a Blu-ray priced $10 higher than the same title on DVD may only account for 15% of sales for that title, but a Blu-ray only $5 more than the DVD could grab more than 70% of the sales.

“Customers love Blu-ray, that part is pure truth,” Carr said. “I look forward to the day we have the same [number of of discs we now ship on DVD] to ship on Blu-ray.”

Carr also used his time at the conference to announce that Amazon would be expanding its Disc+ On Demand program to more than 10,000 eligible titles. The program lets buyers of certain DVDs and Blu-ray Discs play the titles instantly on demand on computers or close to 200 Amazon VOD compatible connected TVs, Blu-ray players or set-top boxes.

“It’s driving more sales of both DVD and Blu-ray, and it’s driving adoption of Blu-ray,” Carr said of the program.

Cameron and Landau Praise BD Format

Avatar director James Cameron and producer Jon Landau had heaps of praise for the Blu-ray format during the conference. The two showed off added scenes in Fox’s Nov. 16 extended collector’s Blu-ray edition, including scenes added to extended versions included in the set.

Cameron and Landau

“Why we didn’t include these scenes in April was because they weren’t finished,” Landau said, adding that Fox shelled out the money to help finish the scenes for the Blu-ray.

“That was a sizeable financial investment on Fox’s part, and a sizeable time investment on our part,” Cameron said. “The fans will appreciate what we put together.”

Cameron reiterated that this version will in all likelihood be the last version before a wide retail 3D Blu-ray release. (The 3D Blu-ray of the film is only available packaged with Panasonic products at the moment.)

“We don’t want to come back and do it over and over, more special editions,” he said. “This will be definitive. This is jam-packed.”

The two shared bonus feature clips from the Blu-ray.

“When fans put in the disc for the first time they know they’re getting something new,” Landau said.

Bonus features are just better on Blu-ray, the two said, with Cameron praising the ability to add a family-friendly audio track, with the bad language removed, and Landau pointing out that because of BD Live, “[Bonus features] will change after the street date. We can continue to add to it.”

“With Blu-ray we can show the process,” Cameron said of the picture-in-picture performance capture feature included in the Blu-ray. “We think it’s just mesmerizing to watch.”

Cameron said the 3D Blu-ray version of Avatar available exclusively to owners of Panasonic’s 3D hardware “looks spectacular.”

“Blu-ray is the only way to do this 3D in high quality,” Landau said. “3D is the way everything is going.”

“3D is here to stay,” Cameron said. “It’s not a flirtation.” He did say that broadcast will likely drive 3D in the home faster than Blu-ray. “I love the idea that 3D is coming into the home. All of these inferior technologies [anaglyph glasses] have fallen away. Our challenge is creating enough content to fill these screens. It’s going to come from sports. It’s going to come from music. It’s going to come from comedy.”

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