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Disney and the BDA talk Blu-ray Streaming and UltraViolet

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Old 02-23-2012, 04:24 PM   #1
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Default Disney and the BDA talk Blu-ray Streaming and UltraViolet

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Disney’s MacPherson, BDA’s Parsons Talk Blu-ray

23 Feb, 2012
By: Chris Tribbey



On Feb. 23, Lori MacPherson, EVP of global product management for The Walt Disney Studios, and Andy Parsons, SVP of corporate communications for Pioneer Electronics and chair of the Blu-ray Disc Association (BDA) promotion committee, participated in the first of several virtual roundtables with journalists held by the BDA.

Here’s a selection of the Q&A portion of the roundtable:

Q: Lori, while some studios are going heavy on catalog titles but just releasing old DVD masters on Blu-ray, Disney seems to be more selective and putting greater care into each, which is awesome. Does that approach reflect a Disney policy on catalog reissues on Blu-ray?

MacPherson: Absolutely. We’re committed to providing our consumers with the best possible Blu-ray experience. We have a deep and rich catalog and our selections take into consideration numerous factors — among them, popularity with families, film lovers and collectors as well as the quality of the film elements.


Q: What’s Disney’s Second Screen?

MacPherson: Disney’s Second Screen, developed here at the studio, allows viewers to explore the story behind the film perfectly synced on a second device like an iPad or laptop, without interrupting their enjoyment of the movie. Thus far we've offered it on Bambi, Tron Legacy, The Lion King and Real Steel.

Q: James Cameron declared that he is interested in increasing the frame rate of his movies to even 60 [frames per second] to smooth out fast content viewing. What is the Blu-ray format doing to support 1080p60, and even on 3D 1080p60?

Parsons: As you know, virtually every film is currently shot at 24fps, so as intriguing as it is to consider the benefits of the higher temporal resolution that could be achieved at 48fps or 60fps, the industry needs to establish standards that can accommodate these higher frame rates before the BDA could consider bringing them into a worldwide publishing format like Blu-ray Disc. James Cameron is a visionary director, so it will be very interesting to see how his idea can be brought into the mainstream film world in the meantime.

Q: Many of the studios appear to be joining in on the UltraViolet digital locker. From the trailers on recent titles, it appears that Disney is working on a similar program? When is that expected to launch?

MacPherson: We expect to launch Disney Studio All Access later this year
.

Q: Does Disney have more plans to release Disney classics (i.e. Aladdin, Little Mermaid, etc.) in 3D like they did with Beauty and the Beast?

MacPherson: Absolutely. Look for Finding Nemo later this year and Monsters Inc. and The Little Mermaid in 2013.


Q: Thanks for all the 3D releases on Blu-ray! Are we going to continue to see a strong commitment to 3D on Blu-ray from Disney?

MacPherson: We are committed to 3D as a platform as it brings new and exciting opportunities for programming. The consumer appetite for quality 3D content continues to grow. The top four films of 2011 at the worldwide box office were all released in 3D — an industry first. Additionally, one 20-year-old film in particular was revitalized by the technology and roared into theaters at No. 1 for two weeks. Of course, that film is The Lion King. Though 3D in the home is still a nascent business, as an industry, we’ve seen the release of more than 150 titles and Disney continues its leadership in capturing a 45% share of Blu-ray 3D content sales.

Q: What’s the consumer feedback on in-home BD 3D?

MacPherson: The feedback has been extremely positive. Consumers are really enjoying the state-of-the-art immersive in-home BD 3D experience and we look forward to bringing many more exciting 3D Disney titles their way.

Q: What efforts are being made to increase the use of 7.1 channels in new Blu-ray movies.

A: Parsons: We love 7.1 audio, and would also like to see it being used more. This comes down to a decision by those who produce the titles, and we're hopeful that we'll see more of them take advantage of the full capabilities of the BD format. We also believe that full, uncompressed 5.1 and 7.1 channel audio is another of Blu-ray's strengths that set it apart from online streaming sources — there’s nothing more immersive than watching a pristine picture with amazing sound.

Q: Many of our readers wanted to know about Disney’s plans (if any) they have on releasing older Disney television like “Wonderful World of Color?”

MacPherson: We continue to look at various technologies that will allow us to release this type of niche programming to consumers that want it. So stay tuned.

Q: Streaming seems to be growing at a very high rate. How does Blu-ray’s growth compare and doesn’t this signal a transition from packaged media to digital download or streaming?

Parsons: This is a very common question, and I can certainly understand the reason for asking it. However, we don't think that one needs to exist without the other, and actually believe the two methods of watching content are very compatible. Blu-ray has significant advantages in settings where viewers want to see a title they really care about in all its HD glory, particularly when they are watching it in a group setting.

Streaming makes sense for more casual viewing of the content that's available on the services that provide it — often, it’s older titles such as episodic TV shows that people are watching on computers, tablets or smaller TVs, but bandwidth variations in typical homes can make the experience frustrating when inexplicable hiccups occur.

Blu-ray is the best way to watch the latest titles without any concern about reliable playback, and it's always available when you want it (unlike some programs that mysteriously disappear from streaming services). So we think that discs and streaming will coexist for many years to come because they serve different needs.


Q: What will Disney Studio All Access consist of?

MacPherson: DSAA will be a Disney-branded experience that allows users to access, manage and experience their Disney movie collection and get rewarded for doing so. It will provide the utility of a storage locker in the “cloud,” access through multiple platforms and devices and unique content and incentives.

Q: Can you give us an update on what all the other studios are doing UltraViolet? How many titles do you expect over what period of time?

Parsons: We can't speak on behalf of individual studios, but it appears that interest in UV is growing. From a Blu-ray Disc point of view, we think it’s all good, since UV is a natural extension of the ownership model that BD discs represent; that is, you buy a disc, and then you can use the same content in other environments such as tablets, smartphones and the like. I have used UV on a couple of titles, and I think it’s a very good value proposition because it's simply widened the scope of how I can use the content. Along these lines, digital copy provides a similar utility, and [we] see these “digital” extensions of the Blu-ray Disc as an illustration of why the format is the most flexible, best value available in home entertainment today.

Q: I’m curious as to what your statistics tell you about people willing to buy physical media versus streaming it online. How is Blu-ray doing against streaming?


Parsons: We don’t see it as Blu-ray versus streaming. Proof of this is the ubiquity of connected BD players that support streaming services — we just don’t see them as competitors per my earlier answer. In fact, we see a connected player as the best thing going in home entertainment hardware because it supports just about everything: CD, DVD and Blu-ray playback (including Blu-ray 3D in most players being sold today), as well as streaming services like Netflix, Hulu Plus, Pandora and so on.

You can find players that support all of these for under $100 — it’s the best bargain I can think of right now. Combine that with the digital extensions from the software side, and Blu-ray really does become the centerpiece for a modern home theater system that delivers the best possible experience in the home, and the flexibility to enjoy owned content on the go.


Q: What percentage of Disney business is BD?

MacPherson: Depending upon the titles, anywhere from 20% to 60% and this [has] grown consistently every year
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http://www.homemediamagazine.com/blu...-blu-ray-26502
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Old 02-23-2012, 06:41 PM   #2
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Doesn't sound like Disney is joining UV anytime soon.
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Old 02-23-2012, 09:54 PM   #3
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Doesn't sound like Disney is joining UV anytime soon.
Probably not soon. They want to drive traffic to their own version.

But if UltraViolet takes off they probably will not rule out some link or compatibly.

It also does not look like Disney will stop promoting Blu-ray anytime soon either.
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Old 02-24-2012, 03:10 PM   #4
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Promoting. That's the key word there now isn't it? They make light of the impact streaming has on selling physical. The truth is OD sales have fallen off a cliff and Bluray is nowhere to be found to save it. Yet they want to act like everything is hunky dory for sales? Their sales pitch sounds very familiar. Who does that remind me of...
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Old 02-24-2012, 03:15 PM   #5
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Originally Posted by Malanthius View Post
Promoting. That's the key word there now isn't it? They make light of the impact streaming has on selling physical. The truth is OD sales have fallen off a cliff and Bluray is nowhere to be found to save it. Yet they want to act like everything is hunky dory for sales? Their sales pitch sounds very familiar. Who does that remind me of...
In light of the actual performance, including Blu-rays very poor 2011 and a 2012 that is 1:1 tracking BO growth, it is hard to imagine that any studio is actually happy with the relative performance of OD sell through.


Now within the confines of individuals, publications and trade groups goal-ed with promoting OD it is different. That particular subset are very adept at spinning absolutely anything into a positive, particularly when they can work in a vacuum where actual revenue trends are not allowed to bee presented as counter to the pro OD PR agenda.
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Old 02-24-2012, 04:45 PM   #6
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Q: Streaming seems to be growing at a very high rate. How does Blu-ray’s growth compare and doesn’t this signal a transition from packaged media to digital download or streaming?

Parsons: This is a very common question, and I can certainly understand the reason for asking it. However, we don't think that one needs to exist without the other, and actually believe the two methods of watching content are very compatible. Blu-ray has significant advantages in settings where viewers want to see a title they really care about in all its HD glory, particularly when they are watching it in a group setting.

Streaming makes sense for more casual viewing of the content that's available on the services that provide it — often, it’s older titles such as episodic TV shows that people are watching on computers, tablets or smaller TVs, but bandwidth variations in typical homes can make the experience frustrating when inexplicable hiccups occur.

Blu-ray is the best way to watch the latest titles without any concern about reliable playback, and it's always available when you want it (unlike some programs that mysteriously disappear from streaming services). So we think that discs and streaming will coexist for many years to come because they serve different needs.
The question was, "how does Blu-ray's growth compare to streaming?", and the answer was....well there was no answer. But if the question was answered honestly, it would go something like, "well streaming is growing by leaps and bounds, but unfortunately Blu-ray's growth has slowed down considerably to just under 20% last year. It has been disappointing to say the least."
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Old 02-24-2012, 04:47 PM   #7
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Originally Posted by Malanthius View Post
Promoting. That's the key word there now isn't it? They make light of the impact streaming has on selling physical. The truth is OD sales have fallen off a cliff and Bluray is nowhere to be found to save it. Yet they want to act like everything is hunky dory for sales? Their sales pitch sounds very familiar. Who does that remind me of...
Down 13.2% last year, maybe not cliff-like, but a pretty steep decline. I would probably slip and fall off a slope like that.
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Old 02-24-2012, 05:15 PM   #8
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Originally Posted by Kosty View Post
http://www.homemediamagazine.com/blu...-blu-ray-26502

On Feb. 23, Lori MacPherson, EVP of global product management for The Walt Disney Studios, and Andy Parsons, SVP of corporate communications for Pioneer Electronics and chair of the Blu-ray Disc Association (BDA) promotion committee, participated in the first of several virtual roundtables with journalists held by the BDA.
Pioneer Announces Business Results for 3Q Fiscal 2012

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For the third quarter of fiscal 2012, the three months ended December 31, 2011, consolidated net sales declined 13.0% from the third quarter of fiscal 2011, to 101,829 million yen. Although sales of car navigation systems grew, large declines in sales of optical disc drive-related products, due to the absence of the previous year's special demand associated with the shift to digital terrestrial broadcasting in Japan, and in sales of car audio products because of the flooding in Thailand, coupled with the negative impact of the Japanese yen's appreciation, resulted in an overall decline.

Operating income fell to a 1,707 million yen loss, from a 5,060 million yen profit for the third quarter of fiscal 2011, owing to deterioration in the gross profit margin and lower sales due to the flooding in Thailand

...

By geographic region, sales in Japan increased 9.6%, to 29,676 million yen, while overseas sales declined 17.6%, to 28,730 million yen.
As Astro would say..."Ruh Roh".
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Warner Bros, on Ultraviolet - "We recognize that the product is not perfect today,” Mr. Tsujihara said. “We don’t have the luxury of waiting a year until we have everything perfect.”
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Old 02-24-2012, 08:12 PM   #9
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Down 13.2% last year, maybe not cliff-like, but a pretty steep decline. I would probably slip and fall off a slope like that.
Well I was talking more about what Disney was used to getting from DVD and VHS. To me if you look at from when HDM came to market? It's a cliff. And there seems to be no end in site. 13% is still pretty dramatic when you consider how much it's already fallen in prior years. Also when you consider how big the market is overall.

I like your other point. They really did avoid that question didn't they? I missed that.
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Old 02-24-2012, 08:38 PM   #10
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For the nine months ended December 31, 2011, consolidated net sales declined 8.2% year on year, to 315,558 million yen. Despite strong sales of car navigation systems in Japan, significantly lower sales of optical disc drive-related products due to the absence of the previous year's special demand associated with the shift to digital terrestrial broadcasting in Japan and a decline in sales of disc drives for PCs, and of car audio products from the impact of the Great East Japan Earthquake and the flooding in Thailand, combined with the Japanese yen's appreciation, resulted in an overall decline.
Doesn't Pioneer make many of the parts for the Apple SuperDrive DVD drives? I could see that declining since they do not come installed on the newer Macs.
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Old 02-24-2012, 08:40 PM   #11
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Well I was talking more about what Disney was used to getting from DVD and VHS. To me if you look at from when HDM came to market? It's a cliff. And there seems to be no end in site. 13% is still pretty dramatic when you consider how much it's already fallen in prior years. Also when you consider how big the market is overall.

I like your other point. They really did avoid that question didn't they? I missed that.
Gotcha. Yeah it's fallen quite a bit since it peaked at $13.89 billion in sell-through in 2006. That's nearly a $5 billion fall to $8.95 billion last year, a 35% fall. And Blu-ray contributes a measly $350 million extra last year to cover DVD. Not much help there.
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Old 02-25-2012, 11:13 AM   #12
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You could also say that Blu-ray contributed $2.2 Billion last year to offset DVD's decline and over $5 Billion since 2006. From zero revenues at the start of the format war or $250 M in 2007 IIRC. Which is more than any other contribution from any other new high margin sell through revenue stream.

Much of that Blu-ray contribution would also have been lost to cheap rentals if Blu-ray (or HD DVD ) had not been launched as a successor high definition successor next generation DVD format.

If Blu-ray or HD DVD had not been created 480p streaming would clearly be superior to plain old DVD. At least with Blu-ray as a superior high definition video source there is a reason to continue buying packaged media for many consumers. That's a lot of help.
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Old 02-25-2012, 11:40 AM   #13
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You car salesman pitch don't work here dude.
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Old 02-25-2012, 11:43 AM   #14
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You could also say that Blu-ray contributed $2.2 Billion last year to offset DVD's decline and over $5 Billion since 2006.
You could say that if you were a PR machine that thought everyone else could be blinded to the actual truth.

Or you could look at Blu-ray growth and see that BD software revenue is cannibalizing from DVD. And that since BD release, it has consistently and unfailing been negative cannibalization.


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Much of that Blu-ray contribution would also have been lost to cheap rentals if Blu-ray (or HD DVD ) had not been launched as a successor high definition successor next generation DVD format.
That is rank speculation based purely on a viewpoint meant to promote Blu-ray. There is absolutely no idea we know what would have happened if Blu-ray was not released. For example, we don't know how the sales/rental split would be if there was no HD first sale doctrine OD format available.

Quote:
If Blu-ray or HD DVD had not been created 480p streaming would clearly be superior to plain old DVD. At least with Blu-ray as a superior high definition video source there is a reason to continue buying packaged media for many consumers. That's a lot of help.
Interesting, because we know EXACTLY what sales of OD are with Blu-ray in the market:

Quote:
Originally Posted by bruceames View Post
Gotcha. Yeah it's fallen quite a bit since it peaked at $13.89 billion in sell-through in 2006. That's nearly a $5 billion fall to $8.95 billion last year, a 35% fall. And Blu-ray contributes a measly $350 million extra last year to cover DVD. Not much help there.
THAT is the actual impact on OD with Blu-ray on the market. Factual.... not PR "woulda coulda shlulda" BS.
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Old 02-25-2012, 11:52 AM   #15
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Originally Posted by Kosty View Post
You could also say that Blu-ray contributed $2.2 Billion last year to offset DVD's decline and over $5 Billion since 2006. From zero revenues at the start of the format war or $250 M in 2007 IIRC. Which is more than any other contribution from any other new high margin sell through revenue stream.

Much of that Blu-ray contribution would also have been lost to cheap rentals if Blu-ray (or HD DVD ) had not been launched as a successor high definition successor next generation DVD format.

If Blu-ray or HD DVD had not been created 480p streaming would clearly be superior to plain old DVD. At least with Blu-ray as a superior high definition video source there is a reason to continue buying packaged media for many consumers. That's a lot of help.
You could say Blu-ray contributed $2.15 billion to offset DVD's losses, IF DVD's revenue weren't affected by that of Blu-ray. Since you can't, you have to look at growth revenue only.

But to play along and assume that Blu-ray is only helping DVD and not stealing any sales, it's interesting to note that Blu-ray's total revenue since inception hasn't even covered the sum of DVD's YoY losses! DVD has suffered YoY losses of $7.04 billion (compared not to the peak year but to the previous year), while Blu-ray has accumulated $5.92 billion in revenue since inception.

Code:
Total	$66.05  ($7.04) $5.92 	$2.13 

Year	DVDsell YoYloss BDsell	YoY Gain

2006	13.89	NA	0.02	NA
2007	13.38	-0.51	0.25	0.23
2008	12.48	-0.9	0.63	0.38
2009	10.55	-1.93	1.07	0.44
2010	8.9	-1.65	1.8	0.73
2011	6.85	-2.05	2.15	0.35
Blu-ray's growth revenue since inception is only $2.13 billion (about what their last year's revenue was), while DVD lost $2.05 billion last year alone! It's pretty sad that Blu-ray's total revenue can barely cover DVD's losses, much less its growth revenue.

So Blu-ray is doing very little to save OD, gaining nearly all of sales from cannibalizing DVD. The same cannot be said of digital, where there is not great cannibalization from the OD formats.

Last edited by bruceames; 02-25-2012 at 12:02 PM.
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