Consumer electronics industry and film studio professionals gathered at the Beverly Hilton this week for Blu-Con 2010, a convention put on by the Digital Entertainment Group to converse about all aspects and the state of Blu-ray. Panel topics ranged from 3D to film classics to music.
Opening remarks by Amy Jo Smith, Executive Director of the DEG, and President of the DEG/President of Warner Home Video Ron Sanders, set the stage with data that 20 million households currently have a Blu-ray player. This represents 20% of the total number of US households. The floor was then given to Bill Carr, Vice President of Music and Video for Amazon.com to give the retailer's view.
Retail Report: Expanding the Blu-ray Market
Bill Carr felt that Amazon needs to offer customers three main things: selection, value, and customer experience. Growing the Blu-ray segment would require listing to the consumer. From the selection front, he felt that Blu-ray was lagging behind DVD, given the same amount of time existing as a format. By the time DVD was five years old, there were over 20,000 titles. Blu-ray at five years has just over 3,500.
Amazon keeps track of what titles their customers want the most. This was heartening, as the number one most requested title are the original Star Wars movies and the second was the Lord of the Rings extended editions. Sadly, the newer Star Wars movie were in third place.
Another interesting tidbit is that for every 10% increase in price between Blu-ray and DVD, there was a decrease of 4% in the number of people picking Blu-ray over DVD. In other words, if the price went down, people would far prefer Blu-ray. Kinda a "duh" moment, but good to hear none the less.
Most interesting is how successful Amazon's Disc+On Demand program has been. This is when you buy a Blu-ray and you get to watch it instantly on Amazon Video on Demand. They've had so much luck with it, they're expanding it to 10,000 titles as of 11.2.10.
Bill said Amazon has found there's a lot of confusion with 3D, with firmware updates, and that consumers want more selection and lower prices.
James Cameron and Jon Landau
3D pioneers and Avatar partners James Cameron (director) and Jon Landau (producer) offered up some thoughts on 3D as it pertains to Blu-ray, as well as a few plugs for the upcoming sequels to that immensely popular film. I'll be writing this up separately as its own feature shortly. The short version is that Cameron is an over the top supporter of Blu-ray, and of 3D (of course). The full version is here.
Presidents Forum
On this panel, four heavyweights from the movie side of things sat to discuss their business and views on Blu-ray. The panel included:
The moderators were Michael Nathanson, Managing Director and Head of US Media and Telecom Equity Research, Nomura Securities and Spencer Wang, Managing Director and Senior Media and Internet Analyst, Equity Research, Credit Suisse.
Ron started out, answering a question about sales, by saying that even though DVD sales were down 14% year to date, Blu-ray was up by 86% and overall sales were up 2%, as far as new releases go. Steve echoed that sentiment, saying that overall expenditures by consumers on entertainment (including games) is at an all time high.
Mike supplied the incredible fact that over 8 million copies of Avatar on Blu-ray had been sold worldwide.
When asked what they felt about the rental market, Ron replied that the overall trend was away from brick and mortar stores (like Blockbuster) towards Netflix and Redbox. That said, there hadn't been a trend away from sales to rental. In other words, even though the rental market has changed radically over the last few years, similar numbers of people were buying vs, renting discs.
Craig felt that his company's 28 day delay before Netflix and Redbox got a title was purely economic (most disc sales are within the first month of release). He could foresee a premium On Demand option in the near future that allowed for day and date sales on that medium.
Mike said that overall Blu-ray and Video on Demand are showing the most growth. Following that up, Ron said that his company definitely saw a 10-15% bump in sales when the disc was delayed for rental, a number that was eerily mimicked by Mike and Craig.
Steve said that his company, on the other hand, didn't have any degradation in sales with no delay, but that his company's films were more impulse driven, compared to the other studios.
When asked about Netflix, and the presumed limitation in revenue that its streaming service provides for studios, each panelist had a different response.
Ron said that Warner felt it was excellent for older films and non-syndicated TV shows, but that they were treading carefully, seeing how the revenue went.
David from Sony acknowledged the evolving marketplace, and that no one could deny how much consumers love Netflix (20 million subscribers and growing). He said that Sony was studying what exactly to deliver via streaming options.
The moderators kept pushing their belief that Netflix must be cannibalizing (their word) the studio's business. Interestingly, the panelists resisted this label.
Mike from Fox said that streaming was fine for "post DVD" content (as in, content that no longer sells in big numbers on DVD).
Craig from Universal went so far as to say that one had to be open to new ideas, and that deals with Netflix were always changeable in many ways to make sure they didn't lose money. David concurred saying that additional ways to interact with consumers is always a good thing. The trick, according to Ron, is to add value so that people want to buy the disc.
The last topic was in regards to piracy, which all the panelists acknowledged as a major problem, but none seemed overly concerned, which was interesting. In certain countries, China and Korea were mentioned, it's practically a lost cause trying to sell media. When there is no "stigma" in stealing the content, and no laws enforced against it, piracy runs rampant.
In closing, Mike had an interesting factoid. He said that Blu-ray buyers are the largest consumers of media across all platforms, on average upwards of $65 a month.
Setting the Stage for Blu-ray 3D
3D is a huge push from movie studios and consumer electronics companies alike. The challenges faced when bringing it into the home were discussed on a separate panel.
The Blu-ray 3D panel was deftly moderated by Mark Finer, Technical Director of the Digital Entertainment Group. Panelists included:
The discussion started by pointing out that 3D is the future on the hardware side, and that studios will be releasing more 3D movies by years end. The self proclaimed Blu-ray 3D Day on November 16th will have 10 titles released that day, with others to follow later in November and December. DEG's official estimate is that we'll see 40 Blu-ray 3D titles (including some studio-specific exclusives) by the end of 2010. Not all of these titles are exactly blockbusters, and very few of these have actual people (as in non-animated stars) but a few like Panasonic-exclusive "Avatar" and Samsung-exclusive "How to Train Your Dragon" should provide plenty of excitement for early adopters of 3D TV. For a full list of upcoming Blu-ray 3D titles, check out Rachel's article 40 Blu-ray 3D Titles Before End of 2010.
Dan mentioned something that is perhaps underreported and widely misunderstood by consumers: that current 3D TVs are the world's best 2D TVs as well. The technology that enables these TVs to present both halves of the stereoscopic image on screen quickly, without major ghosting or "crosstalk" also allows them to create a nice bright, detailed image when in 2D mode. And 2D mode is where most people will be using them, most of the time, at least until 3D content becomes more widely available.
Jim from Dreamworks felt that 3D would invigorate Blu-ray sales. This is because their movies tend to have a younger audience, whose parents would rather buy DVD so the disc can be played in the car or on a portable. But if the only way to bring home a 3D version of the film is on Blu-ray 3D, then parents might cough up a few extra dollars to do so.
Kris felt that Blu-ray 3D wouldn't be enough to push 3D on its own. That would take broadcast TV and game 3D content as well. Also, according to Kris, good in-store demos are vital. Later, he opined that auto-stereoscopic TVs were 7-10 years away, so there was little point in "waiting" for those.
Brian pointed out that most of the Blu-ray players Sony had been selling recently were 3D, so the installed base from a source standpoint is quite large.
The BDA Perspective
Andy Parsons won the longest title card award of the day: Chair, U.S. Promotions Committee, Blu-ray Disc Association and Senior Vice President, Product Development & Corporate Communications, Pioneer Electronics. He went through a few slides that projected 25 million households with BD players by year's end.
On another slide he showed that BD is tracking roughly the same as DVD, even when you include the PlayStation 2 for DVD and PlayStation 3 for BD. When you account for households with an HDTV, the adoption rate percentage is much faster. Lastly, it's the Blu-ray Disc Association's opinion that Blu-ray can coexist quite well with streaming/downloadable content.
Perhaps the coolest aspect of Andy's speech was instead of using the teleprompters, he used his iPad instead. But it didn't have a Blu-ray drive.
Film Classics: New Opportunities for Blu-ray Catalog
I'll be covering this in its own article as well. The short version is that the studios are excited to start re-releasing their catalog content on Blu-ray, as the increase in quality gives consumers a reason to buy the disc either again, or in cases like the upcoming African Queen, the first time ever on disc.
Platform as Portal: The Blu-ray Connected Consumer
The next panel was on the Internet connected aspects of Blu-ray players, from BD-Live to Netflix and other streaming services. Panelists were:
Neither Robert nor Tracey would divulge the exact number of people who were accessing BD-Live content, but said that people were and that there was lots of interest in the feature.
Referring to a comment Bill Carr from Amazon had said that morning, Jeff and Jeff were asked why more of their Blu-ray players didn't have Wi-Fi, given that players so equipped were significantly more likely to be hooked up to the Internet. The answers couldn't have been more different.
Cove, from Panasonic, said that Wi-Fi isn't always reliable, so there's a risk of an angry consumer when the player doesn't work correctly. Also, Wi-Fi adds cost and is a feature not everyone will use.
Cowan said that D&M's Blu-ray players (Denon and Marantz) didn't have Wi-Fi as a conscious design choice. The largest concern is that when firmware updates are done over Wi-Fi, and a dropout occurs, there's a chance of damaging a player. Of course, consumers can go wireless on their own by adding a wireless bridge or gaming adapter to their player's hard-wired network jack, but Cowan's company isn't interested in encouraging that.
This lead to a discussion about disc compatibility, which is something we've been talking about lately. There is no easy answer here. As disc producers explore the limits of what can be done with BD-Java and BD-Live, they're bound to uncover previously unknown (and unseen) limitations in earlier players' performance. for now, regular firmware updates are a necessary evil.
Cove said that older players needed to be taken care of, and that there was no specified date as to how long older players would be updated, but he said it would be years.
Tracey said that extensive testing is done on discs before they're finalized in order to prevent as many incompatibility issues as possible.
Cowan felt that customers are used to updating products, as nearly everything needs it these days. Cove felt that as long as the process was made easy, it wasn't a huge issue.
When it came to streaming content, Cove felt that anything available "in the cloud" was fair game, as long as it was something worthwhile to view on a big screen. Panasonic doesn't keep specific numbers on which type of device, TV or BD player, their VIERA Cast is accessed on more.
Cowan's D&M had a slightly different take. Their Blu-ray player may have Netflix or other video streaming providers, but do not have audio streaming. This is something they feel is better placed in their receivers. A whopping 2/3 of all network capable receivers they've sold are plugged into the Internet. They know this because the receiver pings their main server.
Robert and Tracey were both bullish about Digital Copy, and said that spreading the digital copy to Android devices was something both their companies were looking at. When asked why digital copies expired, they said it just came down to managing all the files, and that neither company wanted such access to last forever.
Blu-ray and Music: Storytelling Through Sound
Mark Finer returned for the last panel of the day, a discussion of the state of music on Blu-ray. Panelists were:
Each panelist showed a clip from their company's library. Jim showed a clip from the Police concert video "Certifiable." Mark had multiple clips from his varied collection. Adam showed a sneak peek of the upcoming Bruce Springsteen set "The Promise: The Darkness On The Edge Of Town Story." All the clips looked fantastic. Sound quality was overly loud, which is more a judgment on the sound throughout the day, which ranged between "what?" and "AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!"
The first topic was a discussion on the difficulties in marketing a music Blu-ray, concert or otherwise. Jim led off pointing out that a concert is usually put on to promote an album, which had its own promotion. A concert DVD/BD comes out 6-8 months later, well past the point where there's much of a marketing budget left.
Adam was a little more optimistic, pointing out that the top video streams on YouTube are actually music videos, showing there is interest. He said that one Shakira video had over 205 million streams. I have a comment about this, but it is hardly appropriate.
What all three panelists agreed on is that concerts on Blu-ray are better than going to an actual concert. The view at home is likely better, and the sound is almost certainly better.
When asked what the artists think about Blu-ray, Jim said that some absolutely love it. Others, who are more of a "pure audio" mindset, don't really care. Adam felt that they liked how it got their listeners closer to the studio master, closer to how they hear it in the studio.
Mark went a step further, pointing out his recordings are done without fancy studio manipulation like EQ and compression. Some artists love this stripped down approach for its blatantly better audio quality. He also pointed out that he doesn't release CDs, as he won't decrease the sound quality of his recordings to be put on CD.
Jim rounded out the whole convention with his final comment that 3D concerts will be coming to Blu-ray in the near future.
Closing
Though there certainly weren't any major surprises, Blu-Con was an interesting look into the different sides of the Blu-ray world. Everyone involved is optimistic about Blu-ray's future (streaming hasn't taken over yet) and welcomes more content and especially 3D.
