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Blu-ray at 10: A Vital Part of the Entertainment Family

16 Sep, 2015 By: Home Media Magazine, Blu-ray Disc Association

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Is there a 12-year-old girl anywhere in the United States who doesn’t have a Blu-ray Disc combo pack of Disney’s Frozen lying right next to the TV? With superhero mania still in full swing, how many boys don’t have prized Blu-ray collections of “Spider-Man,” “Batman” and “Iron Man” movies in their rooms?

As we approach the 10-year anniversary of its launch, the Blu-ray Disc remains one of the most popular ways to watch movies in the home. As of August 2015, more than 90 million U.S. households have at least one Blu-ray Disc playback device in their homes.

And whenever a new hit movie ends its theatrical run and is ready for purchase, the vast majority of consumers continue to buy it on disc — including millennials who grew up with the Internet.

“Our family loves collecting our favorite movies on disc,” said Andrew Melese, a 19-year-old college student from San Diego. “Netflix is always an option, but there are times when we want to watch something new that Netflix doesn’t have, or add one of our favorite films to our library.”

Keila Robledo, 19, lives in Arcata, Calif., “where the cable isn’t so good.” She said she and her friends rely on Blu-ray Disc for their entertainment. “Sometimes we buy them, and other times we get them from Redbox,” she said. “Just over the last six months, when I moved here, we’ve built up a pretty nice collection of movies.”

Blu-ray Disc Resilient, Resurgent

DVD may have been the most successful consumer electronics product ever launched, but Blu-ray Disc is certainly the most resilient. The first discs hit the market in June 2006 just as high-definition TVs were catching on. DVD, launched nine years before, transitioned consumers into buying, rather than renting, movies, TV shows, and other filmed content — but DVDs, as good as they were, couldn’t present a picture in true high-definition.

Years of double-digit growth followed, despite a bruising format war with a competitor, HD DVD, that threw in the towel in February 2008, less than two years after launch. Blu-ray Disc’s growth was all the more remarkable given that in December 2007 came the start of what we now refer to as the Great Recession. In the darkest year of the global economic meltdown, 2009, consumer spending on Blu-ray Disc purchases soared 70% from the previous year, according to DEG: The Digital Home Entertainment Group numbers.

Since the format was launched, consumers have spent more than $13 billion on their Blu-ray Disc collections — some 650 million discs, according to Home Media Market Research estimates.

And with Ultra HD around the corner, observers expect a resurgence of interest, and sales, of Blu-ray Discs. The Blu-ray Disc Association (BDA) began licensing the Ultra HD Blu-ray format on Aug. 24, 2015, with the goal of providing top-quality Ultra HD content to the rapidly growing number of Ultra HD households, expected to grow from 11.7 million Ultra HD TVs in 2014 to 95.6 million in 2019. Ultra HD Blu-ray is a critical component of the Ultra HD transition, with its advances in resolution, contrast, color and audio.

“Ultra HD is expected to ramp up quickly over the next few years,” according to Paul Erickson, senior analyst at IHS Technology. “The ability to consume Ultra HD content during this time, however, is a question mark due to variables such as limited Ultra HD broadcast offerings and household bandwidth for Ultra HD streaming. Ultra HD Blu-ray aids consumer adoption of Ultra HD by providing an immediate, tangible and reliable way to watch Ultra HD content that completely bypasses service provider and bandwidth-based variables.”

A Disc for High-Def

Work on the Blu-ray Disc format began even as DVD was continuing its meteoric rise in popularity. The best minds of the consumer electronics industry knew that as clear and crisp as DVDs looked on regular TVs, they were not meant for the new breed of high-definition TVs poised to take over the market, and it was imperative to develop a next-generation optical disc that could present viewers with true 1080p HD. After years of lab development, Sony Corp. in 2000 unveiled a pair of projects — one in partnership with Pioneer — that employed blue-laser technology, with the promise of far greater capacity than DVD. The first prototypes were displayed in 2000, and two years later the Blu-ray Disc rewritable format was officially unveiled. The nine founding members of the format — Hitachi, LG Electronics, Matsushita Electric Industrial, Pioneer, Royal Philips Electronics, Samsung,Sharp, Sony and Thomson Multimedia — began releasing specifications, and the first consumer Blu-ray Disc home recording device, the Sony BDZ-S77, was released in Japan in April 2003, with a price tag of $3,800. It was touted as a means of recording high-definition broadcasts; no studio content had yet been released on the new disc. In late 2004 the founders of Blu-ray Disc officially changed their name to the Blu-ray Disc Association (BDA), and announced the consortium had more than 70 members.

Meanwhile, a format war was brewing. Led by Toshiba, the DVD Forum adopted specs for a high-definition successor to DVD, dubbed HD DVD in 2003. It employed red-laser technology, the same as DVD, but on a higher density disc. HD DVD offered both single- and dual-layer options, each with three times the capacity of its corresponding single/dual-layer SD-DVD disc — plenty of room for a high-definition picture, better sound and more extras. It was also an open format. Blu-ray Disc, in contrast, offered even greater capacity — five times that of a standard DVD. Blu-ray was also positioned as a “format of the future” more than capable of accommodating expanded interactivity and associated broadband services.

The DVD Forum and the BDA attempted to unify standards but announced in mid-2005 that negotiations had failed. Before either format launched, both formats had three of the six major studios on their side (Universal, Paramount and Warner Bros. for HD DVD; Sony, Disney and Fox for Blu-ray). Both HD DVD and Blu-ray released their first players and titles in 2006. Both Warner Bros. and Paramount would soon offer support for both formats, though in mid-2007 Paramount switched exclusively to HD DVD.

Blu-ray Disc received a big shot in the arm when Sony put a Blu-ray Disc drive in its PlayStation 3, launched in late 2006. In March 2007, Sony Pictures Home Entertainment’s Casino Royale was the first Blu-ray Disc to ship more than 100,000 units. That was also the same month that Blu-ray sales topped 1 million. By this time, Blu-ray was already outselling HD DVD, and in June 2007 Blockbuster announced it would carry only Blu-ray. In January 2008 Warner announced it would support only Blu-ray after May of that year. Walmart and Netflix soon announced the companies would carry only Blu-ray. And on Feb. 19, 2008, the high-definition format war officially ended, with Toshiba announcing it would no longer market HD DVD. Both Universal and Paramount quickly announced their support for Blu-ray.

By the end of 2008 there were more than 10.7 million Blu-ray players in the market, outpacing the adoption of DVD (5.4 million players by the end of its third year), according to the BDA. In the fall of 2008 Walt Disney Studios Home Entertainment introduced the industry’s first Blu-ray combo pack, with both a Blu-ray and a DVD in the same package — a move that did a lot to broaden the market and encourage consumers to make the switch.
The January 2009 Consumer Electronics Show (CES) saw huge electronics industry support for the format, with Panasonic announcing the world’s first portable Blu-ray player, and Sharp unveiling HDTVs with built-in Blu-ray drives. By mid-2009 there were more than 2,500 Blu-ray releases in the market, and by the end of the year home entertainment leaders noted that despite the global economic meltdown Blu-ray Disc sales were up a whopping 70% from the prior year.

In March 2010 Redbox announced it would begin offering Blu-ray rentals at its kiosks in the summer. A month later, Avatar became the best-selling Blu-ray Disc ever, with initial sales of more than 1.5 million copies.

Blu-ray Disc sales up shot up another 68% in 2010, contributing $1.8 billion in revenue, with 11.25 million Blu-ray devices sold for the year, bringing the total U.S. installed base to more than 27 million households.

The Blu-ray Disc tide continued to swell, even as Netflix was growing its streaming service and studios began offering movies for sale over the Internet, as downloads, through iTunes and other services. Consumer spending on Blu-ray Disc rose 5% as recently as 2013, while in that same year the number of homes with at least one Blu-ray Disc playback device rose to 72 million.

Ultra HD Turning Blu

Since then, Blu-ray Disc unit sales have remained fairly steady, even as consumer spending has begun trending downward due to price erosion. But industry experts see a lift in the coming months with the launch of Ultra HD Blu-ray, driven by the format’s unmatched quality.

“It’s true that streaming movies and TV shows from services like Netflix, Amazon, and Vudu is the future of TV, but until the Internet gets a serious bandwidth upgrade … discs will always kill streaming when it comes to picture quality,” Caleb Dennison wrote on the Digital Trends website. “Ever notice 1080p Blu-rays still look better than Netflix’s fancy Ultra HD streaming video? The reason they do comes down to one very simple, but important factor: bitrate. Simply put, the more data you can deliver, the better the picture and sound quality is going to be, and Ultra HD Blu-ray is poised to deliver some seriously big-time data. So much, in fact, that not only will Ultra HD Blu-ray discs offer four times the resolution of 1080p HD, they’ll be able to deliver two new features only recently introduced to TVs: High Dynamic Range (HDR) and Wide Color Gamut (WCG). The result will be an at-home experience that matches or beats what you get at the cinema, with more colors than ever, incredible contrast, and uncompromised sound quality.”

 

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