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Blu-ray Disc, Digital Focus of Opening Session

24 Jun, 2008 By: Erik Gruenwedel

With an introduction consisting of about 15 minutes of trailers for upcoming Blu-ray Disc releases, there was little doubt about the next-generation format's role in yesterday's opening session of Home Media Expo 2008.

EMA president Bo Andersen said Blu-ray and digital mean consumers' ability to watch movies “just got better.” Speaking to a crowd of about 350 at the Pearl Theatre at the Palms, Andersen downplayed cries that the sky was falling on DVD and that digital entertainment and social networking sites Facebook and YouTube would steal the youth away from packaged media.

“It simply isn't true,” Andersen said. “There is no market shift to digital. There is market growth to digital. The robustness of home video and its future … are things to be celebrated.”

Addressing a keynote panel discussion about the growth opportunities Blu-ray presents, moderator Thomas K. Arnold, publisher and editorial director of Home Media Magazine, said consumer adoption of the new format exceeded that of standard DVD during its early days 11 years ago and that it was “only a matter of time” before a complete transition occurs.

“I think it is going to be huge,” said panelist Mike Dunn, president of 20th Century Fox Home Entertainment. “The momentum is there; you see it in the first couple quarters of the year. Every title is selling double what the last [Blu-ray] title did.”

Dunn said Blu-ray would help home entertainment revenue “rebound” to $22 billion by 2011. He said standard DVD would continue to play a significant part and that the transition to Blu-ray must be managed carefully.

Jim Keyes, CEO of Blockbuster Inc., said Blu-ray represents a “classic lifecycle extender” for packaged media.

Eisuke Tsuyuzaki, VP of corporate development of Panasonic Corp. of America and GM of its Blu-ray Disc Group, said Blu-ray would help satiate burgeoning households acquiring larger flat-screen televisions and in need of high-definition entertainment.

Still, James McQuivey, VP and principal analyst with Forrester Research, said challenges remain convincing consumers on the need to transition to Blu-ray from standard DVD.

“The challenge is how do you make them feel the need to do it soon rather than later,” McQuivey said.

The analyst said many consumers view Blu-ray as “DVD plus,” which he said isn't incorrect considering the nascent status of BD Live, which allows players to be connected to the Internet for access to additional content, interactivity, e-commerce and gaming, among other features.

“So, it's going to be hard to convince them that it is time to change,” McQuivey said.

He said the panel's enthusiasm for Blu-ray could only be realized if there is a unified “channel environment” of stores, distributors, retailers and consumer electronics manufacturers who address consumers with one voice.

“That will cause consumers to realize, ‘Oh, that is the way of the future, that's what I have to do,’ he said. “And they will do it sooner rather than later.”

McQuivey said he believes wider adoption of Blu-ray would likely occur only in 2009.

Panelists agreed that the presence of lower-priced upconverting DVD players that claim to play standard DVD in high-definition at retail only confused the consumer and hinder Blu-ray adoption.

Dunn said that as Blu-ray realizes its full functionality, increasing numbers of consumers would eventually give in to their inner “HD snobs” and adopt the format.

“As [Profile 2.0, Web-connected] player availability starts to expand, you'll see that the word-of-mouth will take off,” Dunn said. “The purchase intent [for Blu-ray] is off the chart.”

Keyes said Blockbuster has dedicated the center of its stores to showcase Blu-ray point-of-purchase displays, with plans to roll out greater Blu-ray movie selections alongside standard DVD on store walls.

“We want to put the Blu-ray copy right in front of [the customer's] face,” Keyes said.

Rich Marty, VP of new business development with Sony Pictures Home Entertainment, highlighted the features of BD Live, which panelists characterized as a “game changing” event.

Using a Blu-ray copy of Men in Black, Marty showcased the BD Live interface that allows for constant updates to consumers through the Internet. He demonstrated how BD Live-enabled titles would allow consumers to update trailers directly from the studios, both of upcoming Blu-ray releases and new films coming to theaters. He also played a game on the Men in Black disc with viewers in different locations.

“We can always push newer trailers, content and downloads at any point in time,” Marty said.

He said BD Live also acts as a virtual storage system that allows viewers to store additional content from any Sony BD Live-enabled title, manage it and access it more easily.

Marty said online surveys through BD Live would allow the creation of user groups and communities, similar to social networking sites.

“It's an evergreen concept that we can keep adding to and updating,” he said.

Andersen said digital distribution deserves the attention of all retailers and will be the focus of the show's upcoming Digital Media Day June 26. He said Blu-ray and digital were intended to broaden the consumer's entertainment experience.

“Increased consumption, I believe, is a gift to every segment of our industry,” Andersen said. He lauded Sony's Blu-ray-equipped PlayStation 3 game console with helping meld home entertainment with video gaming.

Andersen then produced a list of 18 reasons the industry should rejoice, of which the Top 10 featured the year's current box office leaders.

Eric Doctorow, GM of MGM Home Entertainment, announced the industry's top retailers, which included single-store winner Video Place and Tans in Rice Place, Wis.; multiple-store winner Kent Smith, with Island Video in Seattle; mass merchant/grocery retailer of the year Giant Eagle; retail chain of the year Hastings Entertainment, based in Amarillo, Texas; and online retailer of the year Netflix Inc.

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