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.”
March 09, 2011
Home Entertainment's Old Face and New Face Share the Headlines
Charlie Sheen's antics aside, entertainment news this week is dominated by a most interesting juxtaposition of the old face and the new face of the home entertainment business.
Blockbuster, for years the 800-pound gorilla of our business back when rental ruled, has been reduced to a feeble old spider monkey in the zoo infirmary. A trustee representing the Department of Justice is leading the charge to ask the court to force the bankrupt rental chain to liquidate its assets. Summit is suing Blockbuster over allegedly unpaid bills, while a Google News search this very morning found a rash of negative headlines, including "Blockbuster files notice of possible layoffs of 850 Dallas and McKinney employees," "Two of three [Racine, Wisconsin] county Blockbusters closing," "San Luis Obispo's Blockbuster video store to close April 10" and "Former Norwich Blockbuster to become bar and grill."
Down for the count? It's beginning to look that way.
Meanwhile, a fresh new face suddenly has emerged in the beleaguered home entertainment sector: Facebook, the social networking site that's made everyone's life a reality show.
Warner Bros. Digital Distribution yesterday began offering movies for purchase and rent on its Facebook movie page. Fans who “like” The Dark Knight will be able to use their Facebook credits to rent the title for 30 credits or $3. Currently, only U.S. consumers can rent movies. Warner plans to add more films in the coming months, with a purchase option promised as well (for the full story, click here).
The development prompted analysts to scramble over one another to proclaim Facebook the Next Big Thing in home entertainment. In a Financial Post story ( to read it), Eden Zoller, principal analyst with Ovum Plc, said jumping into the nascent digital delivery sector of the home entertainment business is a "logical next step" for Facebook.
"A Facebook video/Web TV service does not exist at the moment but it is likely to do so in the near future and is a logical next step in the network’s growing service portfolio," Zoller said. "Facebook is rapidly evolving beyond its core communications focus to become a wider platform for distributing and consuming entertainment services, particularly in games. At the same time an increasing amount of online video viewing time is on social platforms, notably YouTube but also Facebook albeit to a lesser degree."
I don't think Zoller's too far off. Facebook already lets users upload and share video clips a la YouTube. The site is developing a strong mobile presence. And with the launch last year of Facebook credits, a virtual currency that at this point has a use limited to social games and the purchase of virtual gifts, the proverbial stage has been set.
As the Financial Post story pointed out, "Extending the use of Facebook credits to include access to premium content such as movie rentals will not only help Facebook achieve its goal of having sales of Facebook credits account for one-third of all revenues, but it also will help validate arguments of the virtual currency being the world's first truly global currency."
Zoller sums it up quite nicely. "These factors, combined with Facebook’s large, highly engaged user base of around 600 million members, will make it a very attractive distribution platform for video and TV services," he said. "It will also no doubt give established online video rental and distribution platforms like Netflix cause for concern."
Food for thought, certainly.
February 22, 2011
Death Watch Time for Blockbuster?
Oh, how the mighty have fallen....
The news this morning, that Blockbuster has begun an auction process that will be overseen by the once-mighty video rental chain's four top creditors, really isn't surprisingly. Blockbuster has seen its revenues hit by rivals Netflix and Redbox, both of whom effectively built better mousetraps in delivering rental titles to consumers, and last year filed for Chapter 11 bankruptcy. Since then, the chain has had trouble paying its bills, and in fact is being sued by Summit Entertainment for nearly $10 million worth of product.
We've also been hearing reports that Blockbuster is having trouble getting product from certain studios, and just last week I received a letter from a gentleman in Little Rock, Arkansas, that indicated just how dire the situation really is on the store level:
"I went into my local Blockbuster video store today and saw a big section on a wall reserved for copies of the movie Red. No copies were available, which surprised me for a Wednesday morning. I asked the store employee and she said they hadn’t received their copies yet, and she’d been told by her superiors that they didn’t know when they’d get any in. This is three weeks after the movie was released. I noticed a few other blank sections on the wall for new releases that hadn’t arrived yet. I saw this first happen a month ago with the release of The Social Network. It took over a week for this store to get their copies. I’ve been renting at Blockbuster nearly 25 years and I’ve never seen this happen before. They’ve always had the new releases on the day they were released. Any idea what’s going on?"
What's going on is this: Unless something dramatic happens, Blockbuster won't be around for much longer. Just writing this causes a lump in my throat, a burning feeling deep in the pit of my stomach. For years and years, Blockbuster not only has been the 800-pound gorilla of our industry, but it also has become a pop cultural icon, as much a part of American culture as Coke, Walmart and the iPod. I can't imagine life without Blockbuster, and as I've written in this space before I really think the chain has done everything it can in recent years to reinvent itself short of shutting down all its stores and investing the money in, say, enough computer terminals or kiosks to go head-to-head with Netflix and Redbox.
It's too late for that, of course. Netflix and Redbox both have become too entrenched for anyone to challenge their dominance in their respective sectors of the retail trade, and if either one of them fails it will be because their business model no longer appeals to the consumer--sort of the same thing that did old Blockbuster in.
Of course, the big millstone around Blockbuster's neck was its debt load, which prevented the chain from meeting the Netflix/Redbox challenge head on or even capitalizing on the exclusive availability of rental titles from four of the six majors on street date--a development Blockbuster should have marketed the hell out of but didn't, simply because it had no money.
Now, it's come to this. An auction. The creditors--all hedge fund firms, including Monarch Alternative Capital and Owl Creek Asset Management--have set the opening bid at $290 million, a fraction of what the chain once was valued at. If no bids are received by April 20, the four credits would end up owning Blockbuster.
What they would wind up doing with Blockbuster is anybody's guess. One wag on the Film School Rejects website suggested "somebody rich should scoop up this and MySpace and start a pop culture museum."
February 09, 2011
The Three Faces of Consumerism
As a lifelong student of human nature — I've always preferred authors like Faulkner and Hemingway, who wrote about the human experience — I've spent quite a bit of time analyzing consumers of home entertainment. My conclusion: We are looking at three, not two, classes of consumer, each a distinct group with its own characteristics and personality traits that transcend their consumption of entertainment.
The first group, and the one that means the most to our business, is the collector. These are people who enjoy owning, and they will likely continue to buy movies on disc as long as they are available on disc. These people enjoy filing away their new purchases — invariably, either alphabetically, by genre, or a combination of the two — and show them off with pride to visitors. Collectors are the ones most likely to replace their DVD movie libraries with Blu-ray Discs and can't for the life of them understand why someone would rather rent than own, if the price is right. These disc collectors typically have shelves of hardback books and CDs in their homes as well, and continue to maintain photo albums, not trusting their hard drives or the Internet with their precious memories.
The second group is one we shall call the minimalists — and I know plenty of them. They abhor clutter, and their homes are sparsely furnished. Rarely do you see a bookcase; their music is all on their computer; and they would never think of cluttering up their homes with DVDs or Blu-ray Discs — not when they can rent them. Minimalists also were the first to embrace Netflix and streaming, and even in the old days, before DVD and the Internet, they frequented video rental stores or turned to cable and satellite for their entertainment needs. I have a minimalist friend who back when I was getting gobs of VHS screeners looked at me with pity. "I'd never want all that stuff in my house," he said. "HBO's got everything I need."
The third and last group I'll call "quick and easy." These consumers prefer the path of least resistance. If they happen to be in Walmart, buying groceries and school supplies, they'll pick up a cheap movie or two, just because it's there. Their first stop is the $5 dump bin; if, after about 20 seconds of browsing, they see nothing they like, they'll check out the new releases. They'll spend $15 for a new release its first week in stores, but not $20 the next week, when it is no longer on sale. Instead, they'll stop by the Redbox or Blockbuster Express kiosk on the way out, and rent something, anything, that happens to catch their fancy. The quick-and-easy crowd also tends to channel surf more than others; if they find something interesting, they'll stick with it, and if it's a movie, they'll watch all or part of it, even the commercials. It takes too much effort to skip through them. The quick and easy crowd doesn't value its purchases the way collectors do; walk into their homes and you are apt to see discs scattered all over the place.
As our nation ages, the first group likely will get smaller. Young people are growing up in a transitory world; they visit websites and watch YouTube videos that exist only in cyberspace and may or may not be there tomorrow. Still, this is not to say they won't become collectors as they get older, although in this world of fast-changing technology, I rather doubt it. The minimalist group will likely stay the same; I think this group, of the three, is the most unique, a class all in itself.
The biggest growth, the way I see it, will come in the quick-and-easy crowd. They have big appetites for entertainment but really don't care how they consume it, as long as it's, well, quick and easy.
And that, my dear reader, is the challenge facing studios and retailers alike: how do you attract consumers who see entertainment as just another commodity, to be selected, purchased and brought into the home without much thought or effort?
January 23, 2011
What Really Killed the CD?
A good friend of mine emailed me an interesting article the other day he had come across on CNET, the popular destination site for all things high-tech. The article detailed the imminent closing of one of Sony's two remaining U.S.-based CD manufacturing plants, in South Jersey, a move that will put 300 workers out of a job. A Sony spokesman said the plant, which was built more than 50 years ago to produce vinyl LPs, is being shuttered because of the still-troubled economy and ever-waning consumer interest in the CD.
The zinger: The article maintains the CD is dying not just because of the iPod and the digital distribution model it represents, but, rather, illegal file-sharing, a practice born more than a decade ago when the record companies, in a series of stupid moves, opened the doors to piracy by first killing off the single, since the birth of recorded music the only available sampling mechanism other than the radio, and then jacking up the list price of the CD to as much as $21.98. When consumers rebelled and began using the Internet to share music, the record companies didn't capitalize on the potential new business model of digitally distributed music, but, rather, took to the courts to fight their own customers. Ultimately they realized their folly and took a seat at the table--but by then, a transformative mindset change had already taken place. And it is this mindset change, that music is not something that must be paid for, continues to dog the music business to this day. As the CNET story says, "innovation isn't the only reason CDs look long in the tooth. After a decade of rampant illegal file sharing, they'd argue, the plant closure is a sign that the CD just couldn't compete with free."
The home entertainment industry has handled the digital migration in a much smarter fashion--aided and abetted by the fact that consumers will be a lot slower in giving up their DVDs and Blu-ray Discs than their CDs. The reason, of course, is that consumers have always bought music by the song, not by the album, and an individual song can be downloaded in a matter of seconds. It's cheap, a lot cheaper than buying a CD (remember, no more singles!), and it's easy. Our business doesn't work that way--no one buys a movie by the scene. Downloading a two-hour movie can take a lot of time, particularly if it's in high definition--and at $12 to $20 a pop, it can be as pricey a proposition as buying a DVD or Blu-ray Disc. No wonder electronic sellthrough, as this end of the business is known, isn't exactly taking off like wildfire--there's no compelling advantage over buying a physical disc.
Streaming, of course, is another story. The segment of the population that wants to own and collect movies, I believe, was artificially inflated by the novelty of the DVD. And now that things are settling back down to normal, consumers--at least a healthy percentage of them--are going back to rental, and more and more, they're doing it digitally, either through VOD or iVOD.
This brings us back to the original premise of the CNET story: That the CD was done in by file-sharing, not digital distribution. That danger lurks in our industry, as well. Granted, the same obstacle to EST exists in the shady underground as well: it's a hassle to download and share an entire movie. But the rash of mobile and portable devices that employ much-smaller file sizes--who needs high-definition on a three-inch screen?--is something we all need to be aware of. And as download speeds become faster and faster, ultimately there will come a day when a full movie, even in glorious high-definition, can be downloaded in a matter of seconds.
We need to be ready for that day. As the CNET story says, it's hard to compete with free.
January 07, 2011
This Year's CES Is All About Fun
After spending three hours walking the convention center floor at the Consumer Electronics Show in Las Vegas this afternoon, I briefly closed my eyes and visualized a giant yellow smiley face.
This year's CES certainly won't be remembered for innovation. 3D, which was all over the place, was actually introduced at last year's show. And tablets, the other Big Deal, originated with Apple's iPad, and Apple is conspicuously absent, choosing to stage its own shindig rather than share the spoils here in Las Vegas.
But that's OK with me. The lack of innovation has lowered the pressure level on exhibitors, so instead of trying to outdo each other they're simply refining their products and having a ball while they're at it.
The Panasonic booth had all sorts of viewing stations where visitors can watch music, games, sports, movies, you name it in state-of-the-art 3D. Among all the competing formats out there, Panasonic, for my money, has the best 3D, and the company certainly celebrated its leadership position by focusing on the fun factor more than anything else. No more hard sell on 3D--just a demonstration of how fun it can be to watch.
20th Century Fox deserves kudos for using CES to announce the September 2011 release of the Star Wars franchise on Blu-ray Disc. Again, nothing really new here--we all knew the films were eventually going to be released on Blu-ray Disc--but by making the announcement here at CES 20th Century Fox brought a little bit of Hollywood to the show floor. It was, well, fun.
I also got a kick out of Smart TV, which lets you toss the remote and instead manipulate your television with a hand clap or other gesture; Casio's new line of digital cameras and online editing program that lets you turn photos into works of art ("It's time we brought some fun to digital photography," the pitchman said during the stage presentation"); and Microsoft's Windows 7 display, with demonstrations on how to use such features as Windows Live to create wonderful movies and slide shows.
I also liked the book-like cover for the Kindle, the really cool new video game chairs (including one with pockets for snacks, extra games and even the Guitar Hero guitar, so Junior never has to get up except to go the bathroom), and these caps that let you snap your smart phone under an extended brim so you can create your own little movie theater.
Fun, fun, fun.
The mood of the attendees and exhibitors, even those from the studios, also seemed remarkably upbeat, with plenty of optimism that the economy is going to get better and these fun new devices will catch on with consumers.
A few more random thoughts and observations from the show floor:
--I never would have imagined seeing so many different skins, cases and protective coverings for iPhones and iPod Touches. There were aisles and aisles of them--a whole new industry for a product made by a company that doesn't even exhibit here.
--Why are we still seeing car DVD players? Let's go Blu-ray. I know, the picture doesn't really matter on such a small screen, but there are two other compelling reasons why we should ditch DVD and put Blu-ray players in cars: 1) better disc protection (Blu-ray Discs have a protective coating, while DVDs don't) and 2) flexibility (I know combo packs have become increasingly common, but in many cases consumers still have to choose between buying the DVD or buying the Blu-ray Disc). Blu-ray turns 5 this year. By now, everyone should be onboard.
--It was good seeing Warren Lieberfarb, the father of DVD, at the DEG: The Digital Entertainment Group event Thursday night. If it wasn't for Warren, our business might not have survived as long as it has. We all owe him a tremendous debt of gratitude.
December 22, 2010
Yes, Virginia, There IS a Disc Business!
I take pleasure in answering thus prominently the communication below, expressing at the same time my great gratification that its faithful author is numbered among the friends of Home Media Magazine:
I am 8 years old. Some of my friends in the consumer media say the packaged media business is dying. DVD sales are falling, fast; Blu-ray Disc has yet to really catch on; and the whole world is moving toward electronic delivery. Papa says, “If you see it in Home Media Magazine, it’s so.” Please tell me the truth, is the packaged media business dying?
Virginia, your little friends are wrong. They have been affected by the skepticism of a skeptical age. They do not believe except what they are told. They think that nothing can be which is not comprehensible by their little minds. All minds, Virginia, whether they be men’s or children’s, are little. In this great universe of ours, man is a mere insect, an ant, in his intellect as compared with the boundless world about him, as measured by the intelligence capable of grasping the whole of truth and knowledge.
Yes, Virginia, there is a vibrant and viable packaged media business. It exists in stores large and small, by mail, in vending machines. People are still enjoying movies, TV shows and other entertainment on disc, and they will continue to do so for the foreseeable future. To be sure, they may have slowed the pace of buying DVDs, but more and more of them are switching to Blu-ray Disc and starting their collections all over again, albeit at a slower pace due to the troubled economy. Others have gone back to renting, since renting a movie, thanks to Netflix and Redbox, has never been cheaper or easier. Alas! How dreary would be the world if there were no packaged media business! It would be as dreary as if there were no Virginias. There would be no true high-definition picture, no movie theater sound, no extras, no special features, no commentaries! We should have no enjoyment, except that which we glean from our computers. The eternal light with which childhood fills the world would be extinguished.
Packaged media dying? Not hardly, Virginia. To the contrary, it lives and will likely live on and on and on. It will continue to make glad the heart of childhood, and be the preferred way of bringing entertainment into the home — and keeping it in our homes, to cherish and enjoy over and over again — for a long, long time.
(Apologies to Frank P. Church and the New York Sun.)
December 13, 2010
More 'Discs are Dying' BS
The barrage of reports in the press that DVD and even Blu-ray Discs are relics of a bygone era and everything's moving to the Internet would have you believe that all of us in the home entertainment business had better look for new jobs.
The 24/7 Wall St. website even went so far as to post a story on "The Five Businesses That Killed the DVD" (to read it, ), even though two of those businesses, Netflix and Internet-enabled Blu-ray Disc players, are actually helping the disc stay alive. Despite lots of talk about streaming, Netflix is still very much a disc-based rental service, and while consumers seem to be enjoying the ability to stream movies as well, a point could be made that we won't know how deep that enjoyment runs until Netflix starts charging consumers for the privilege instead of letting them stream away for free. As for Internet-enabled Blu-ray Disc players, the whole idea of letting consumer hook up their players to the Web is to provide them with updated materials and content to supplement what's already on their disc.
It's sort of like what we're seeing in the game world: My sons, and millions of kids and young adults like them, play Call of Duty: Black Ops online, with an ever-widening circle of friends, both real and cyber. But to do so they still had to buy the disc, $650 million worth in just five days.
My point here is that while Web-based viewing, downloading and networking very well could be the wave of the future, it doesn't necessarily mean packaged media is doomed. The two don't need to be mutually exclusive.
And for those who call me an old fogey and insist "it's a generational thing," let me say this: My 8-year-old records "Spongebob" episodes from the TV and, when I'm not looking, tries to watch "South Park" episodes on YouTube. But he also covets his brother's cherished set of "Futurama" discs, housed in a huge plastic "Bender" case, and put on his Christmas list "South Park DVDs."
My two older boys, who have effectively shut little Hunter out of their lives, also enjoy YouTube and Hulu. But on weekend nights, one or the other comes downstairs and retrieves a couple of Blu-ray Disc or DVD movies to watch with his brother.
Sometimes they invite me to join them, but lately I've been declining: I'm too busy watching those wonderfully restored "Perry Mason" DVDs on the 65-inch plasma TV in our family room.
And apparently I'm not alone. We all know what a huge success Black Friday was, with consumers snapping up a grand total of more than 50 million discs, according to studio reports. Granted, most of them were purchased at rock-bottom prices, but the concept of going out and buying entertainment on a disc doesn't appear to be nearly as strange or foreign as some of these media reports suggest.
Peaceful coexistence. That's how I view the physical and digital worlds. And the moment someone proves me wrong is when I'll start updating and sending out my resume.
November 27, 2010
While final numbers or even preliminary numbers aren't in, early reports indicated Black Friday was a huge day for the home entertainment industry, with consumers crowding into stores like Walmart, Target and Best Buy and leaving with armloads of heavily discounted DVDs and Blu-ray Discs.
The deluge indicates one thing: Disc sales have become increasingly price-sensitive, although maintaining this pace will bring us closer and closer to the tipping scale, where it's more profitable for studios to sell fewer downloads than mass quantities of uber-cheap discs.
The one saving grace is that retailers, not studios, took the hit this time around. But while we may exult at the gobs of DVDs and Blu-ray Discs that were snapped up by bargain-hunting consumers, we must also accept the sobering thought that selling DVDs for under $2 and Blu-ray Discs for $5 is simply not sustainable.
We don't want to train consumers that this is the new reality, that this is all that discs are worth. But I think consumers are smart enough to know that Black Friday means some truly incredible deals--heck, Walmart was selling laptops for less than $200, while Best Buy had a Toshiba Blu-ray Disc player for $59.99--and that once the post-Thanksgiving discount madness is over, they will once again be charged more realistic prices.
For the sake of our business, I'm hoping Black Friday rekindled the emotional bond consumers in the not so recent past developed with their movies and TV shows. The concept of owning and collecting, after all, was an outgrowth of DVD, a relatively new habit. When our collections began to spill out onto the floor and laundry room cabinets, we applied the brakes, and while many of us do intend to replace at least our favorite movies with Blu-ray Discs, the troubled economy has prevented us from doing so.
Black Friday turned even the most cautious collectors into hoarders. At Best Buy, I saw lines of people with huge stacks of DVDs ($3.99) and Blu-ray Discs ($7.99-$9.99) in their arms; at the Target store in Oceanside, Calif., that I visited, every single $7.99 Blu-ray Disc was gone by 10 a.m.--and we're talking catalog titles such as Serenity, Taken, Wanted and the three Lord of the Rings films, which from what I'm hearing were the first to go. Walmart was an utter zoo, thanks largely to more than 90 DVD titles--including Ice Age, Sex and the City and the Bourne and Lord of the Rings trilogies--priced at just $1.96 apiece. Walmart also blew out some 60 Blu-ray Disc titles at $5, including Batman Begins, Live Free or Die Hard and The Dark Knight.
Obviously, these prices can't last, but they sure caught the consumers' attention. And with economic recovery, true economic recovery, still months, if not years, away, we need jolts like this to keep packaged media in the spotlight--and in the home. We need mass feeding frenzies to ensure consumers don't lose their appetites for buying discs, for owning and collecting movies.
We just can't do it all the time.
November 15, 2010
I've Got Friday on My Mind
I can't even count the number of high-ranking studio executives who over the last few weeks have told me that they won't really have a good handle on how DVD and Blu-ray Disc sales are faring this holiday season until after Black Friday.
The Friday after Thanksgiving, of course, marks the unofficial start of the holiday shopping season. It's a day when retailers stumble all over themselves trying to lure consumers into their stores through steep price breaks and other incentives, in the hopes that once they get a taste of the amazing bargains each retailer has to offer, they'll come back again and again and again.
In the world of home entertainment, Walmart, Best Buy and Target are on the front lines of Black Friday DVD and Blu-ray Disc sales. Costco, Sam's Club and Fry's are not far behind.
Each year, word of what awaits consumers at these and other retailers seems to leak out earlier and earlier. This year, word is that Walmart will sell wireless Blu-ray Disc players for as low as $69. That's a big development for our industry, since one of Blu-ray Disc's killer apps, as far as studio marketers are concerned, is BD-Live, which relies on Internet connectivity to deliver new and updated extras. The problem is, most Blu-ray players currently in homes aren't wireless, which means there's a fat chance that player will ever be connected to the Internet.
Walmart also is reportedly going to offer up to 60 Blu-ray Disc titles for $5 each. To me, that's an even bigger boon for our business, since one of our biggest challenges right now is to get consumers to rebuy their movie libraries. I've spoken to lots of people who are hooked on Blu-ray, and they'd like to eventually replace all their favorite DVD catalog titles with high-definition discs. The problem is, they can't afford to do so.
Just last week, I received a letter from a gentleman who said he's "been working on switching my whole DVD collection (some 500+ DVDs counting TV show seasons)." He bemoans the fact that so many films have not yet been released on Blu-ray Disc but is "really glad the studios are starting to get off their butts" and releasing more catalog titles on Blu-ray Disc. Referencing a recent column I wrote on catalog titles on Blu-ray Disc, he had this to say: "You mentioned that they will need to unearth some more extras to hook us but in truth I never watch any of the extras on a DVD and I'm sure many people would be happy to forgo the 'extras' to get the movies quicker and possibly cheaper. The reason I've converted to Blu from DVD is the superior picture quality over DVD and the fact that Blu-ray Discs are more durable. No more scratches making the movie freeze or skip! Watching movies on Blu-ray is a lot closer to the 'true' movie experience since the HD format looks near enough to the quality of the movie as seen in the theaters that I never feel the need to go out to see a movie unless it's one I want to experience on the larger screen. The only extra worth increasing cost over is the addition of the digital copy, since most people now want an easy way of playing their movies on wide variety of portable players without the need to 'rip' the disc."
So I think I speak for many studio executives when I say Black Friday can't come soon enough. Sure, it's unlikely retailers nor studios will make much money from Blu-ray Disc sales on Nov. 26. But if they can get consumers hooked on the Blu-ray Disc experience--and price, as well as title availability, seem to be the key here--I honestly can't think of a wiser investment.