Thomas K. Arnold is considered one of the leading home entertainment journalists in the country. He is publisher and editorial director of Home Media Magazine, the home entertainment industry’s weekly trade publication. He also is home entertainment editor for The Hollywood Reporter and frequently writes about home entertainment and theatrical for USA Today. He has talked about home entertainment issues on CNN’s “Showbiz Tonight,” “Entertainment Tonight,” Starz, The Hollywood Reporter and the G4 network’s “Attack of the Show,” where he has been a frequent guest. Arnold also is the executive producer of The Home Entertainment Summit, a key annual gathering of studio executives and other industry leaders, and has given speeches and presentations at a variety of other events, including Home Media Expo and the Entertainment Supply Chain Academy.
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.
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.
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.
I went to the world premiere last night of the Michael Jackson concert film This Is It, a patchwork documentary of sorts about the concert tour that never was. And while I have never considered myself a diehard Michael Jackson fan, I will say the movie captivated me for its entire two-hour run. I'll admit, part of it was my almost morbid curiosity about what, exactly, Jackson was like in what turned out to be the final three months of his life. And what the film portrays is a more personal, more revealing portrait of the real Michael Jackson than any previous documentary or film I've seen about the King of Pop. Director Kenny Ortega really did a good job with this movie, taking what one would think would be a series of random behind-the-scenes clips from Jackson's rehearsal sessions and fashioning them into a real movie that requires neither narration nor plot to offer a revealing glimpse into one of the most interesting pop cultural icons the world has ever seen.
Much has been made of Sony Pictures' contention that it will only keep the film in theaters for two weeks; I think if the movie catches on, it will stay longer, but then again, it's aimed at Jackson's fans, and those fans are going to rush out and see it right away. My prediction: The film will wind up grossing about $60 million in U.S. theaters, but when it comes out on DVD--and I've heard varying dates, both before and after Christmas, although nothing's been officially set yet--it's going to become one of the biggest-selling music discs of all time. It's made for Blu-ray--and I don't think Sony Pictures Home Entertainment executives will be disappointed in total sales, even though their hoped-for total, 3 million discs, seems a little high.
I sympathize with President Obama’s frustration with Fox News over what he perceives to be the network’s not-so-hidden agenda to “get” him.
Our industry has been fighting similar battles for years, but in recent months the rhetoric has been stepped up by such big mainstream media outlets as the Wall Street Journal and the Los Angeles Times, both of which seem to consider it a preordained destiny that packaged media is on life support and will soon disappear altogether.
The Wall Street Journal, for example, just published a story on the Walt Disney Co.’s latest venture into electronic delivery, a quasi-secret project (dubbed “Keychest”) that would allow consumers to pay one price for permanent access to a movie across several different digital platforms or devices. The headline: “Disney Touts a Way to Ditch the DVD,” which paved the way for the writer to proclaim, “the decline in DVD revenue has undermined the business model Hollywood has relied on for more than a decade.”
Reality check: We’re in the midst of a format transition, and it’s going to take a little while for Blu-ray Disc to fully compensate for the decline in DVD. Blu-ray is, however, making significant gains, particularly in light of the troubled economy, and remains the only way for consumers to watch movies and other programs in true high-definition on their expensive new HDTVs, which are now in nearly half of all U.S. homes.
Moreover, Disney and the other studios that are aggressively going after digital delivery options aren’t trying to “ditch the DVD,” but, rather, broaden the home entertainment market to include on-the-go users armed with iPods, laptops and smart phones. Convenience is the primary selling point; the quality just isn’t there for proper viewing in the home, especially now that everyone and his brother is getting a high-def TV and snazzy home theater system.
Not to be outdone, the Los Angeles Times took a decidedly negative spin on third-quarter home entertainment numbers issued by DEG: The Digital Entertainment Group, maintaining that “Hollywood’s biggest and most profitable business shrank a little slower in the third quarter than in the first half of the year, thanks entirely to rentals.” As for the dramatic gains in Blu-ray Disc sales that were duly noted in reports in our magazine and other publications, the Times had this snotty reaction: “In its news release with the data, DEG attempted to highlight sales of Blu-ray disc sales, which rose an impressive 66.3% in the quarter. That’s a substantial slowdown, however, from the category’s 91% growth in the first half of the year.”
Reality check No. 2: Blu-ray’s first-half growth rate was bigger because HD DVD only gave up six weeks into the first half of 2008, which held back sales. So it’s really an unfair comparison. What the Times should have noted is that in an economic climate where everything is down, Blu-ray is one of the few products that’s selling better than it did a year ago — and that’s a significant accomplishment, by any measure.
The Times also failed to even mention what I consider the key point in the DEG release: That the number of consumer transactions to bring entertainment into the home rose 6.6%. That tells me that consumers have hardly lost interest in home entertainment; indeed, they’re snapping up more discs than ever, which translates into a tremendous vote of confidence for packaged media.
But then again, that’s apparently not the sort of analysis the Times wants to hear.
It was interesting to see the various news stories based on home entertainment spending numbers released yesterday by DEG: The Digital Entertainment Group. Most news outlets, including ours, really played up the rosy Blu-ray Disc numbers (to see our story, click here). Others, in particular the Los Angeles Times, chose to feed their own perception that packaged media is dying by focusing on the continued slump in DVD sales, which even with the mitigating factor of Blu-ray Disc are now down 13.9% for the year, slightly worse than the 13.5% deficit reported at the year's halfway point. Still other media outlets took the middle ground by noting that total consumer spending on packaged as well as digitally delivered media was down 3.2%, a modest drop given the troubled economy but still nothing to cheer about it.
Not one focused on what, in retrospect, is the real story: Consumer transactions, meaning purchases as well as rentals, rose a healthy 6.6%. That's a resounding vote of confidence in the core premise of our business, which, after all, is simply the act of bringing movies and other pre-recorded programming into the home (or the car, or the laptop) for at-will consumption. The transactions number does not distinguish between a purchase and a rental; both, it can be argued, involve a conscious decision by a consumer to go out and spend money on bringing a DVD or a Blu-ray Disc into the home. Now, studios don't like rental because they don't get as big a piece of the pie as they do from a sale. Heck, sometimes they barely get crumbs, if that.
But looking at things solely from a consumer interest angle, rentals are the same as purchases, and the fact that transactions are up 6.6% is a healthy indicator that consumers most certainly have not lost interest in home video. They're simply going back to their old ways--renting rather than buying--and they're doing so in record numbers.
What the studios need to do now is figure out a way to monetize that 6.6% gain so it doesn't continue to wind up as a 13.9% loss.
Richard the Plumber came by the other day to fix a toilet that's not holding up too well under three growing boys. He spied a DVD of the hit HBO series "True Blood" on the coffee table in my family room and told me his whole family is a big fan. What he said next surprised me. "You should get the Blu-ray version," he said. "You won't believe how much better it looks than DVD, and you've got the kind of TV where you're really going to notice the difference."
Two things about this exchange are worth noting: 1) Richard the Plumber has already invested in a Blu-ray Disc player, and 2) he just reaffirmed my belief that the picture quality, much more so than any novel special features or even BD Live application, should be the primary selling point in propagating Blu-ray to the masses. If Richard the Plumber notices the difference, and on a TV series, no less, then you can bet other people will, too.
Of course I didn't let the conversation end with that. Now that I knew he had a Blu-ray machine, I had to follow up with the big question home entertainment executives are all thinking about these days. "Do you ever watch BD Live?" I asked. His response echoed the sentiments expressed two weeks ago by members of the Home Media Tastemakers Forum. "Nope," he said. "My Internet's in my office and my TV's in the living room, and I sure as heck don't want to string a cable halfway across the house. You'd think they'd figure out a way to connect via WiFi."
You'd think, Richard. You'd think.
I told him the first wireless players came on the market in July and they're gradually rolling them out now. Richard's response: "I wish I would've knowed before I bought my player. Why are they always doing stuff like that?"
I didn't have an answer.
I trust you all saw the report from the research firm GigaOM that predicts enormous growth for the home 3D market, with projections that by 2013 some 46 million homes will have 3D HDTVs. What makes this projection even more startling is the fact that it's being issued at a time when 3D for the home is still in the development stages. Sony is preparing to release its first 3D Bravia TV sometime next year, along with a 3D option for all of its PlayStation 3 games. And Panasonic has announced plans to ship a 50-inch 3D HDTV with a plasma screen sometime in 2010, as well.
In a proverbial nutshell, the study bases its optimistic projections on the overwhelming success of 3D in movie theaters. The powers that be in our home entertainment industry have taken notice as well and, more and more, seem hell-bent on recreating in the home the first-class 3D experience that moviegoers get in theaters. That means no more red-and-blue anaglyph glasses; instead, viewers will have to don high-end polarized glasses and, by the way, stock up on a new TV as well. And the vehicle to bring 3D movies into the home: Blu-ray Disc. Indeed, there are some who believe 3D may be the elusive "killer app" that makes Blu-ray a must-have commodity--a killer app for which some of the best minds in our industry have been searching for years.
Here's how the 3D experience works in theaters, courtesy of Wikipedia: "The projector alternately projects the right-eye frame and left-eye frame 144 times per second, and circularly polarizes these frames, clockwise for the right eye and counterclockwise for the left eye. A push-pull electro-optical modulator called a ZScreen is placed immediately in front of the projector lens to switch polarization. The audience wears recyclable circularly polarized glasses to make sure each eye sees only its own picture...The result is a 3D picture that seems to extend behind and in front of the screen itself."
I've experienced this myself, several times, most recently with Final Destination--and let me tell you, I, for one, am hooked. But before we get all worked up about 3D in the home, there's an awful lot of work to be done, not just on the CE end but also on the studio end, making Blu-ray Discs ready for the third dimension. But from what I am hearing, everyone is working at breakneck speed to achieve this, and I am fully convinced that by the time the first 3D HDTVs arrive in stores there will be 3D Blu-ray Discs to play on them.
If there aren't, our industry is going to be in bigger trouble than anyone could have thought.
A controversial biopic on director Roman Polanski is being released on DVD to retail stores around the country on Oct. 20.
Damian Chapa, who directed, wrote and stars in Polanski Unauthorized ($25), says the film was initially distributed only to Wal-Mart and various Web sites through Terra Entertainment. But recently, Chapa said, he decided to expand distribution to other retailers through Victory Multimedia—just before the controversy hit over Polanski’s arrest on a 32-year-old sex charge.
“It was coincidental,” says Chapa, whose Amadeus Pictures produced the film in early 2008 and gave it a limited theatrical release.
The film casts a cynical eye on Polanski and explores in detail his life, from his early years in war-torn Poland to the 1969 murder of his wife, Sharon Tate, and his exile from the United States in 1977 after he pled guilty to having sex with a 13-year-old girl.