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BDA Sees Blu-ray Growth For Years To Come

1/10/2012 04:56:00 PM Eastern

LAS VEGAS — The future of home video entertainment
may be coming from the Cloud, but the trusty Blu-ray
Disc player continues to drive volume sales growth and
revenue opportunities today.

That was the assessment of Andy Parsons, Blu-ray
Disc Association (BDA) U.S. promotions committee
chairman and Pioneer Electronics communications and
advanced product development senior VP. The BDA is a
multi-industry-supported promotional group that is dedicated
to promoting developments in the Blu-ray Disc
(BD) format.

“While it seems so logical and so obvious to many
casual observers that all SD and HD programming will
soon be distributed via the Internet, this all-or-nothing argument
is too simplistic. What about bandwidth limitations
of typical households?” Parsons asked, while comparing
the prophesied extinction of optical discs to past
predictions of the paperless office.

He pointed out that the average broadband connection
speed in the U.S. today is about 5Mbps, which is
not enough to support all the content being delivered
on discs, including the HD quality and extra content afforded
the 50GB Blu-ray platter.

Consumers are also attracted to the ease of use and
collectability of physical media. Meanwhile, the continued
growth of HDTV penetration and dramatically lower
prices for BD players bodes well for demand sustainability,
he said.

As for today’s software business, Blu-ray content
sales grew 58 percent year over year in the third quarter
of 2011, contributing to a cumulative 33.6 million unit
U.S. household penetration, according to the Digital Entertainment
Group (DEG).

Its latest industry report even showed significant
growth in the rental of packaged media, despite the disappearance
of numerous mom-and-pop stores.

“I think one key reason for this is that you simply can’t
get access to most of the newest content via streaming,”
Parsons added. “If I want to see a film that was just released
on disc a month or so ago, I probably won’t find it
on any of the legitimate streaming services that consumers
subscribe to, but I can buy it or rent it on disc.”

Disc-by-mail services should be sufficient to carry the
load for the foreseeable future, Parsons added, and they
often provide availability and convenience that the momand-
pop stores lacked.

Even as Netflix and Blockbuster expand their streaming
and download services, renting physical media appears
to be in their cards for some time to come.

“I just can’t see how any online rental service can provide
a full range of content to their customers without
discs, at least not anytime soon,” he said. “I don’t think
streaming can really replace discs until it’s truly ubiquitous,
matches the content availability, and works as reliably
as discs.”

Still, Parsons said, streaming can be very convenient,
and “it would be foolish to say that it’s not important.
Our position is that it will take far, far longer to fully replace
physical media than some people are predicting.
Both disc and Internet consumption can coexist for many
years to come.”

As for the future of Blu-ray 3D format, Parsons said it’s
growing and is “as much a content-driven business as
regular Blu-ray and DVD have been, so as the population of titles continues to grow, the interest level among
consumers should continue to grow as well.”

He added, “The growth is also somewhat regulated by
the adoption rate of 3D HDTV sets, which has grown at
a very decent rate — up to about 3 percent penetration,
I think — considering that these sets haven’t been on the
market very long.”

Still, as prices on BD players drop below the $100
mark, the future for category
feature advancement seems
limited.

Parsons, though, said, “Bluray
players deserve more
credit than they get for being
the most versatile content
nerve center you can buy for
your living room.”

At the same time, he said he
still sees a promising market
for “more upscale players that
emphasize quality more than
quantity of content.”

For the future, “I think we’ll
continue to see new features
appear initially at the higher
end, such as 1080p-to-4K up-conversion as these displays
begin to enter the market. It also may be possible
to improve streamed content picture quality with realtime
signal processing, much as we do with highly compressed
audio streams in some home products.”

Another promising recent development was the introduction
of the Ultraviolet virtual content locker system
that enables consumers to pay one price to buy conforming
Blu-ray Disc movies along with the rights to access
the title in streaming, download and digital copy
form for playback on other devices.

“We see Ultraviolet as a way of expanding the functionality
of Blu-ray content, as it adds value to the ownership
model,” Parsons explained. “I’m personally a big fan of
Digital Copy because I travel a lot and like to watch movies
on my iPad. Spending a couple of extra dollars for
this feature is well worth it to me. Ultraviolet is very similar,
except that it encompasses a larger array of platforms
through both streaming
and downloads.”

As for the future of the
BDA, the promotional
group will be helping to
explain what Ultraviolet
is and does as “another
compelling reason to invest
in Blu-ray titles,” he
said. It will also be leveraging
online and socialmedia
tools in the coming
year to present the creators
of the BD software
and hardware “to explain
why they are passionate
about the format.”

They will also work with influential “mom bloggers”
who have followings outside of the usual technology audience
to help explain why recordable Blu-ray is a great
way to enjoy and archive personal content.

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