Yesterday I was invited to join a round-table discussion with some of the leaders of the Blu-ray industry to discuss the evolution of the home entertainment market and how current technologies (Blu-ray Disc, digital steaming and downloads and disc-based digital extensions) complement one another to give consumers more flexibility and control over their content and viewing options than ever before. The discussion was moderated by Andy Parsons, Chair, BDA US Promotions Committee who also hosted the Q&A panel that followed afterwards along with Rich Marty, Vice President for Sony Pictures Home Entertainment and Paul Erickson, Senior Analyst for IMS Research. As you might expect, UltraViolet came up a lot in the discussion (including my own complaint about it) as well as hardware questions, 3D adoption and its market share, their thoughts on the future of the format, and a lot more. There was even some talk about the upcoming Lawrence of Arabia Blu-ray release. Read on for more details!
The BDA Blu-Ray Lounge
Virtual Roundtable with Paul Erickson, Rich Marty and Andy Parsons
Tuesday, June 12th at 9:30 AM US Pacific Time
Q – What’s the status of plans to standardize Ultra Violet so that users don’t need to go to different studio sites to register their purchases? And, more importantly, when will users be able to register an UltraViolet disc merely by putting it in a Blu-ray player and tapping one button?
A – Rich Marty: The industry is continually evaluating and improving the UltraViolet user experience, including sign-on. Currently, a consumer can utilize Wal-Mart’s VUDU service to aggregate and watch all of their movies in one place. Over time, we expect that the UltraViolet process will become even more streamlined, with the possibility of including direct Blu-ray Disc redemption from a connected player.
Q – Are there any players out there that can stream Ultraviolet? If not, is it expected?
A – Andy Parsons: I’m not aware of any at the moment, but as a manufacturer of players, I suppose I would have to ask why you’d want to do that if you have a Blu-ray player and already own the title on BD; wouldn’t you want to see the film in the highest quality HD picture and sound?
Q – Can you say why some studios have moved away from digital copies and started using Ultra Violet? Why can’t both be offered? UV is a poor substitute for digital copies as it takes a lot of time to set it up and then all you can do is stream it or watch it on your PC. The move to UV seems to be detrimental to consumers, so I wanted to hear your thoughts on it.
A – Andy Parsons: Your question is really a product-related one, since it’s completely up to individual studios as to which of the “digital” file types they want to include, if any. I know, for example, that some titles I’ve recently bought include both digital copy and UV, whereas others might offer only UV or only digital copy. The reasons studios package their content the way they do is based entirely on the features they want to include.
Q – Any plans for doing Blu-ray Audio releases for the Audiophile market? Also, what was the motivation behind SPHE switching from Dolby TrueHD on their home video releases to DTS-HD Master Audio?
A – Rich Marty: Blu-ray is the ideal format for high-def music and concert releases, and our sister company Sony Music has released a number of titles on the format to date. As Sony Pictures, we don’t generally handle that content and focus on feature films and TV shows. In terms of audio codecs, we are constantly evaluating the high definition audio landscape, as we did when we made the shift to DTS HD-MA.
Q – What’s the current split in BD vs. DVD software sales?
A – Rich Marty: For key new release titles, the split can go as high as 50%+ and we expect that go higher as Blu-ray penetration increases.
Q – How has the Wal-Mart disc to digital initiative been going?
A – Paul Erickson: In terms of 4K for consumers, I think it is still quite new and honestly will not be mainstream-accessible for quite a while, in terms of pricing or availability of content. TVs/ Displays capable of reproducing 4K content will be prohibitively priced for the mainstream, but as is the norm, I expect they will primarily be in the hands of enthusiasts for a while before 4K displays, content, and devices move downward in price and upward in availability. Projects like Super Hi Vision are even more niche, keep in mind there are still lots of people migrating to 1080p worldwide. There’s always going to be a lag between the cutting edge and actual mainstream adoption, I think for 4K to take mass-market flight there has to be some burning need at the consumer end. Currently I don’t know that it exists outside of serious enthusiasts. Switching gears, from that perspective I think much like 3D, 4K is a valuable extension to Blu-ray – if you want to go beyond the basic HD experience, the features are there for the serious enthusiast to take advantage of.
Q – What is Sony Pictures’ position on upgrading the Blu-ray specs to put 4K and 8K native video on a BD disc?
A – Rich Marty: As mentioned, the Blu-ray format is well-positioned to adapt to evolving standards. As the future unfolds, Sony Pictures is in a good position with our asset library, given that we already master a number of titles at 4K resolution.
Q – I was wondering if you think that Blu-ray is in fact the last physical format or if you see something like SD cards replacing it in the future?
A – Andy Parsons: I’ve learned to avoid trying to predict the future, but I do think that new physical formats are based on specific applications that mandate their use. For standard definition, we had DVD, which did the best possible job of presenting content in that resolution. For HDTV, we have Blu-ray, which has enough capacity to present 1080p images and uncompressed sound with the highest possible quality available. Fortunately, if and when 4K begins to make an entrance on the scene, Blu-ray has enough capacity to handle that job too.
Q – What is the current split between streaming and packaged media?
A – Andy Parsons: The most recent numbers we have from IHS Screen Digest is for 2011, which showed about 16% of revenue was for streaming, and 84% was for packaged media.
Q – Apple has made a point of saying that its new retina displays actually have more pixels than an HDTV, suggesting the picture quality is better than Blu-ray. Do you think Blu-ray will be able to become more high-def with greater resolution? Is there a next-gen HD in the works?
A – Andy Parsons: We are already at the maximum resolution available for the HDTV systems currently in use around the world (1080p), so the only way to become “more hi-def” would be to incorporate 4K resolution into the format. At present, the BDA is not working on a 4K version of Blu-ray, but if and when the time comes to do that, we believe the 50GB capacity should allow us to accommodate the much higher data rates that 4K sources require.
Q – More and more disc titles are capable of remembering where they were last played through Java apps these days…what are your thoughts on this?
A – Andy Parsons: I’m like anyone else — I love being able to resume a title where I left off, since the days of being able to watch a movie for 2+ hours without interruption are pretty much behind me for the moment. I know that both player and content companies are acutely aware of the need to provide this capability, so I’m sure you’ll see more solutions down the road. I can’t wait.
Q – How does Sony feel the Blu-ray 3D (or other 3D format) adoption is going with consumers?
A – Rich Marty: 3D adoption should be looked at as a more of a marathon than as a sprint. 3D is quickly becoming a standard feature set on new HDTVs, and as such, there will be a continued hunger for 3D content. We’re pleased with the Blu-ray 3D results to date and the excitement that surrounds it. As you look at this summer’s 3D movie slate, there are obviously a number of new 3D titles coming later this year to drive that excitement and adoption.
Q – When do you see a new format possibly replacing Blu-ray? Or is Blu-ray going to enjoy the same amount of market dominance that DVD had?
A – Andy Parsons: Packaged media formats don’t really come along all that often, because each represents a standardized, dependable way to distribute and enjoy content around the world. We knew this when we built the specifications for Blu-ray, since formats like VHS, CD, DVD and even vinyl records tend to stick around for many decades. Blu-ray has continued to gain in popularity over the past six years, with a current household penetration of about one-third of U.S. homes so far, and it hasn’t shown any sign of slowing down at all. It’s also encouraging to see that some of the newer releases coming on the market can represent more than half of packaged media sales, indicating that Blu-ray should continue to play a very significant role in the market. And as we said in the video portion, the format has adapted to include many new ways of enjoying content.
Q – Where does gaming fit into Blu-ray?
A – Rich Marty: As you know, the PlayStation 3 really helped drive Blu-ray at the launch of the format. Another demonstration of the versatility of the format has been our “game demo hybrids,” with the inclusion of a PS3 game level on the same Blu-ray as a feature film, as we did with Battle: LA/Resistance 3 and Zookeeper/Ratchet & Clank. Given the great consumer response, we’re going to continue the collaboration with PlayStation.
Q – I’m not sure if you can answer this but I was wondering if MGM/Sony will resume releasing the Bond sets where they left off, completing the series for those that bought the first three sets. I know the complete box set is coming but I wanted to know if there were plans to help the people that bought the first individual sets to complete their collection.
A – Rich Marty: You would need to check in with Fox/MGM, as they handle the home entertainment distribution of the Bond titles.
Q – For this holiday season, how do you think Blu-ray disc players will stack up against the various alternatives?
A – Paul Erickson: I think BD players will fare fairly well this holiday season. I think as always the first and biggest obstacle to pass for the mainstream consumer during the holidays is an accessible price. As we’ve seen over the last few years, BD players have dropped lower and lower, to where now sub-$100 players are quite common. I think we will see increased segmentation of streaming-only players such as Roku and Apple TV under $100, partially because sub-$100 BD players have applied pressure to those products – BD players offer a more versatile value. As we see more players on Black Friday and during the holidays drop to near-DVD-player pricing, it puts even more pressure on streaming-only boxes. Given the ability to play physical media, and common access to mainstream streaming services like Netflix and Hulu, I think BD players will look quite attractive compared to streaming only devices. Versus game consoles, mainly the PS3 and Xbox 360, I think BD players are attractive due to the lower price points. BD players compare well for the main reason that they sit at significantly different price points in general… however modern game consoles, for a higher price, do offer very competent access to physical and streamed content. The rise in adoption of connected/smart TVs can also be seen as the growth of a future competitor, but that remains a streaming-only proposition. Replacing a TV is also a much more costly, and much more long-timeframe proposition. BD players are accessibly priced and add capabilities to prior TV generations without “smart” features. Overall, I think BD players are going to increase in appeal, and compare quite well to alternatives this holiday season primarily because of the value offered for money, when it comes to the ability of people to consume media.
Q – You said Blu-ray players are the nerve center of the home entertainment experience. Given that players can do everything, how are most people using their Blu-ray hardware?
A – Andy Parsons: That’s a great question, and we’re looking into getting some data that might answer it more precisely. We think that most people are buying BD players to watch movies in high definition as the first priority, and that they are also using streaming functions to get access to content they watch on a more casual, one-time basis. This is why I used the “never center” phrase, as there really is no other product on the market that can handle all the format types that a connected Blu-ray player can.
Q – Have you had any feedback from customers regarding the downgrading of rental Blu-ray to remove extras and force the viewing of previews? I am not sure if Sony does this but certainly other studios do…
A – Rich Marty: We haven’t had any specific feedback on rental discs to date…but on a separate note, we are evaluating the user experience at disc start-up in general. Although there are some legal constraints (logos, FBI warnings, etc.) and we can’t make guarantees, we do want to ensure that the Blu-ray consumer has an optimal experience from start to finish – and are looking closely at what can be achieved.
Q – How does the landscape look in 5 years? Blu-ray? Streaming? Something we haven’t seen yet?
A – Paul Erickson: The market as always, is unpredictable, but I think if we extend certain trends we see now, there’s a good chance we’ll see: 1. Blu-ray continuing as a specific format, much higher capacity than you see today, with 4K, 3D, and other potential features being standard. 2. Physical and streamed media sharing equal footing – by this I mean certain use cases will always need physical media. You will not have a stable high speed internet connection everywhere and in every place, this is just reality. In these use cases, such as road trips in the middle of nowhere for example, physical media is still key. 3. Pay-TV services will be much more developed in how they allow consumers to consume the content they’ve subscribed to, on the various screens they own. 4. Blu-ray’s content transportability to mobile devices will be mature, and common. 5. Streaming will be far more accepted and understood by consumers today. 6. Lastly, consumers will be much more savvy about consuming digital media in all forms. overall Blu-ray will still be around I believe, as part of the various ways and means by which people can legitimately and purchase and consume media across their varied devices.
Q – Is there a roadmap within BDA to upgrade Blu-ray specs for putting 4K and 8K native video on a BD disc? Is there still no call to do so? If so, why not? One supposition is that many may feel physical media such as BD won’t survive long enough to see 4K and 8K content become a reality for the home, and that’s why there’s no call to upgrade BD. Is that the case?
A – Andy Parsons: As I’ve said before, there is currently no plan to add 4K or 8K to the Blu-ray specs, so there is no official roadmap for them. But bear in mind that we still don’t even have 100% penetration of HDTV sets in the U.S. (currently about 75% or so), so we’re still out there promoting the benefits of HDTV to those who haven’t taken the plunge yet. The home theater folks are, as always, at the bleeding edge of technology, and it’s understandable that those who are clued into 4K are eager to put it to use. If and when we do decide to develop a 4K version of Blu-ray, however, I’m confident that only packaged media will have the capacity and throughput needed to do it justice, since it contains four times the picture information as 1080p — the average U.S. household bandwidth of 5 Mbps is simply not fast enough to handle 1080p reliably, let alone 4K.
Q – Any final thoughts as we close out this virtual roundtable?
A – Paul Erickson: I think the major takeaways from my perspective aren’t fundamentally different from what I spoke about late last year; Blu-ray still offers the same strong value propositions. When a person buys a BD player, they are getting a device which offers them the best versatility in content consumption for the money. Moreover, they can still watch all of their legacy DVD content that they’ve already invested in. To me, BD players still represent tremendous value for money, particularly in today’s budget-conscious economy. I mentioned that they would be a sleeper buy last holiday season; I believe that will remain true for holiday 2012 for all the same reasons.
A – Rich Marty: Thanks for the opportunity to talk about Blu-ray, which remains a top priority for Sony Pictures. Hope everyone is as excited as we are about Lawrence of Arabia, coming out on Blu-ray later this year for the 50th anniversary.
A – Andy Parsons: I think the main point we want to make today is that Blu-ray Disc products have grown and adapted to a changing technology landscape in a way that really benefits consumers. We’ve added 3D, introduced connected players that embrace streaming services alongside packaged media such as Blu-ray, DVD and CD discs, and we’ve seen newer titles that have helped us expand the home theater into new places by adding the digital extensions such as digital copy and Ultraviolet. We believe there is no better value available to a consumer of motion picture content than a Blu-ray system, because it gives you the absolute broadest range of ways and places you can enjoy the great content we all love.