Home Media Magazine - February 3-9, 2008 - (Page 12)

COMMENTARY www.homemediamagazine.com THE BUZZ BY SCOTT HETTRICK, GUEST CONTRIBUTOR High-def Discs Double Size of Download Market onsumers spent more than $260 million on high-def discs in 2007. Less than half that amount was spent on Internet downloads — $123 million — according to Adams Media Research. I mention that only to provide perspective. Internet downloads and Web-delivered content are the hot topic these days. As a consumer, I welcome new viewing options that suit my preference. The more the better. I consider Blu-ray Disc to be one of the most exciting of the cool new technologies. And I like Fox’s digital copy for iTunes strategy, which takes away the download time that is still far too slow and cumbersome for the average consumer. As exciting as all these new technologies are, it’s important not to lose sight of where consumers are spending their money, and where studio profits will continue to come from for many years. THE BEAUTY OF ALL THESE NEW TECHNOLOGIES IS THEY ARE WONDERFUL ADDITIONAL WAYS TO ENJOY MOVIES AND TV SHOWS. Analysts and some bloggers often have a hard time with the concept of peaceful co-existence and strong revenue from multiple formats simultaneously. In fact, the beauty of all these new technologies is they are wonderful additional ways to enjoy movies and TV shows, but they do not negate or replace my primary desire of watching a movie, when possible, in full 1080p high-def with surround sound. Sure, I can start watching a high-def movie download within seconds after clicking to do so, but it will still take hours to completely download. When it does finish downloading, it is compressed and not in full 1080p Hettrick’s regular blog appears at HollywoodinHiDef.com and does not have uncompressed audio. It takes up a ton of storage space. It doesn’t have chapter stops. It doesn’t have bonus features. And I can’t lend it to a friend. Adams projects that within five years digital download revenue will overtake the cable/satellite payper-view/video-on-demand market, which has taken decades to even reach the $1 billion mark. Meanwhile, the market for movies on discs already stands at more than $24 billion. Having reached $260 million in the first full year despite being bogged down by a large-scale format war, Adams projects high-def discs will provide a big spark for growth in the overall disc market. Sounds like there are a lot of formats and technologies to be bullish about — not just one. READERS’ FORUM I The following letter is in response to Thomas K. Arnold’s editorial “HD DVD Backers Should Call It a Day” (HM, Jan. 27-Feb.2, 2008), in which he said Toshiba and Microsoft threaten the home media industry as a whole by continuing to support HD DVD: T H EY SA ID IT “EVERY BOOK THAT IS AT LEAST 100 YEARS OLD THAT IS POPULAR FOR GENERATIONS SHOULD BE REDONE FOR A NEW GENERATION.” Right on the Money As a retailer with nine video stores that sell equipment and movies, and rent titles and games, I could not agree with you more on your statement to the HD DVD camp to “knock it off.” Universal and Paramount announced that this changes nothing for them. I feel these two studios are now not only going to hurt consumers, but are cutting their own throats as well as those who own retail businesses. In our stores, one of the most important factors in the player decision for consumers is that Disney is with Blu-ray. This is vitally important to families. I applaud Warner Bros. for making a very smart business choice and one to benefit retailers and consumers in the future. It is clear that Blu-ray won every single week of the year in software sales, the installed base of players is almost triple that of HD DVD (and yes, PS3 gamers DO buy movies, I can tell you that from everyday selling experience). For 2007, most of the year for software has been either 3-to-1 or 4-to-1 in favor of Blu-ray. Since Black Friday in November, we have sold 21,000 pieces of Blu-ray software, compared to 5,160 pieces for HD DVD. We have sold more than 4,920 PS3s, 1,787 Blu-ray standalone players, 824 HD DVD players and about 253 HD DVD add-ons for the Xbox 360. Well, you can see why we were happy with Warner’s decision. The biggest sellers in the Bluray standalones were the Samsung 1400 and Sony 300 when they were reduced to $299, but we have many consumers who spend more for the Pioneer, Sony’s higher-end player and the Panasonic models 10A and BD30. The HD DVD fans have been bickering about Blu-ray’s lack of Internet connectivity and picture-in-picture (one of which, 1.1, is now a reality, and 2.0 is due very soon). I can certainly tell you from retail, we have very few customers who care about those features. Most of them want to get a good player, get a good quality HD movie and play the movie. I find that most customers do not care to watch a running commentary added right over the movie’s video image while it is playing. We have had very little disappointment from our customers about this, even though we make sure to inform them what each player can do and will/will not do in the future. They are more concerned about features such as Dolby True HD and DTS Master audio capability than they are 1.1 or 2.0 features. Another area I read about often is the statement made by Toshiba, which doesn’t count PS3 in their Blu-ray player statistics. I’ve heard it from Universal’s Ken Graffeo as well. But I would like to make things clear. Close to 45% of the PS3s we have sold have been to consumers who want to use it only to play movies, so the statement that the PS3 is a game machine is not accurate. This is the $399 40GB model. We do sell more of the 80GB model to gamers. Times have changed, and the standalone player is not the only means of playing movies anymore. In our stores, we have many gamers who came in for The Simpsons Movie Blu-ray or Pirates of the Caribbean or other releases. The gamers have been that happiest the studios are accommodating them by releasing HD titles they desire. The Toshiba side had a huge opportunity because of player pricing. But they lacked the initiative to attract other hardware manufacturers to come aboard, and when they did, they turned their back on them. Case in point: The Venturer HD DVD player. This was the first electronics company to license a standalone DVD player except for Toshiba, and it was to be a price leader. So how grateful was Toshiba? One week after this player was released, Toshiba did the $99 firesale on the A2, cutting the price in half of what the Venturer is. This is no way to treat your only hardware supporter. It also left my stores with an entire shipment of those players because people preferred the Toshiba. After the Warner decision, we have decided to sell off all remaining inventory of HD DVD players, software and rental titles, and join Warner in promoting one format. We feel we owe this to our industry and retail outlets, can better promote and service the consumer this way, and that our sales staff can show more excitement and convey to our customers that they can feel comfortable in making a decision now. I would like to call on all video outlets to do as we are doing. Educate your customers about each format. Be honest with them about which studios are releasing on which formats. Get behind the Blu-ray format and let’s try to accomplish what Warner has just helped us to do. Bob Johnson Owner, Video World (locations in Minnesota) Producer Robert Halmi Sr. on his movitvation for making Tin Man, a re-imagining of The Wonderful Wizard of Oz “I CERTAINLY ADMIRE [TOSHIBA’S] CHUTZPAH. THEY CAN CERTAINLY CHOOSE TO DO AS THEY PLEASE WITH THEIR MARKETING. RUNNING A SUPER BOWL AD IS NOT LIKELY TO CONVINCE CONSUMERS THAT HD DVD WILL WIN THE FORMAT WAR.” Andy Parsons, SVP of product planning, home entertainment group, for Pioneer Electronics, and spokesperson of the Blu-ray Disc Association We Want to Hear From You! Please send letters to: Editor, Home Media Magazine 201 East Sandpointe Ave., Suite 500 Santa Ana, CA 92707 E-mail: HomeMediaMagazine@questex.com Fax: 714.338.6712 Include name, business address (city and state) and telephone number. Letters are subject to editing. Join Us Online: www.homemediamagazine.com Visit our Web site to participate in discussion boards and weekly polls on the latest industry issues. Home Media Magazine February 3–9, 2008 http://www.homemediamagazine.com http://HollywoodinHiDef.com http://www.homemediamagazine.com

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Contents News Commentary Reviews Pipeline Research Top 20 DVD Sellers Top 20 Rentals and Top 10 Charts Just Announced

Home Media Magazine - February 3-9, 2008

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