Posts Tagged ‘Blu-ray’
DEG: Here’s The Rest of the Story
- Published on Friday, 09 August 2013 11:11
- Pete Putman
- 0 Comments
The headlines sure look impressive: “Overall Consumer Spending on Home Entertainment Up 2 Percent in First Half of 2013!” “Blu-ray Disc Sales Up 15 Percent Over Mid-Year 2012!” “Electronic Sell-Through Surges 50 Percent!”
Yes, it’s the latest Home Entertainment Report from the Digital Entertainment Group, the industry association that promotes the Blu-ray disc format, and to a lesser degree digital downloads and Internet streaming of movies and TV shows.
The DEG’s original mission (and its predecessor’s, the Blu-ray Disc Association) was to push Blu-ray into every home as a replacement for the standard-definition red laser DVD. But a funny thing happened along the way while the Blu-ray and HD-DVD camps were slugging it out: Consumers discovered streaming, specifically from Netflix. And many of those same consumers decided they didn’t need an optical disc format anymore.
DVD sales began to tank in 2005, and DVD rentals starting falling off a few years later. The popularity of video-on-demand (streaming, downloads) grew so quickly that it surpassed the revenue from optical disc sales and rentals in 2011, and quite frankly, very few people saw that coming.
The problem with streaming and digital downloads is that they’re not as profitable as selling and renting optical discs, or “packaged media” as Hollywood calls them. Blockbuster found this out the hard way, as did Hollywood Video a few years earlier. And 3D did absolutely squat to boost the fortunes of the Blu-ray format after all of the hullaballoo died down.
It would appear that consumers who want to watch movies have decided they don’t need an actual physical copy sitting on their shelf. All they need is “anytime, anywhere” access to that movie. The net result is $4 and $5 rentals of Blu-ray quality movies through iTunes, Nook, Amazon, and other online stores…and not sales of $20 and $25 Blu-ray combo packs at Best Buy, Wal-Mart, and Target.
So what’s with the skepticism? you may ask, given the upbeat headlines from DEG. Hmmm…If you scan the press release in more detail, you’ll find these gems hidden within:
* Overall DVD and Blu-ray disc sales fell 4.7% Y-Y to nearly $3.6 billion in the first half of 2013.
* Overall rental revenue, including digital, fell more than 5.5% Y-Y to nearly $3.1 billion.
* DVD/BD rentals from physical stores like Blockbuster fell 12.6% Y-Y to $522 million.
* Subscription-based DVD/BD rental revenue declined nearly 21% Y-Y to $531 million.
* Revenue from DVD/BD kiosks fell nearly 4% Y-Y to $955 million.
Notice the underlined words “fell” and “declined.” And how they all apply to optical disc formats. These trends haven’t changed significantly in the past eight years for DVDs, and an uptick in revenue from the sale of Blu-ray movies (usually in combo packs with DVDs and a digital copy) to the tune of 15% so far this year hasn’t been enough to offset any of these trends.
DEG, who has been known in the past to cherry-pick the data but not fill in the blanks, also stated that “Consumers bought more than five million Blu-ray compatible devices during the first six months. There are now more than 61 million Blu-ray players in U.S. homes.”
An interesting data set, but the big follow-up question is; how exactly are those “Blu-ray compatible devices and players” being used? Keep in mind that iPads, Galaxys, Kindles, and Nooks are in one sense “Blu-ray compatible devices” in that they can play back 1080p movies with 8-bit color. As for those 61 million Blu-ray players – are they functioning more often than not (as my experience tells me) as low-cost streaming media boxes, with the occasional BD loaded up now and then? DEG doesn’t say, so the number hasn’t any real significance right now.
Well, what was the good news, if any? For starters, video-on-demand services were up 6.9% Y-Y, earning nearly $1.1B. And subscription-based streaming (read: Netflix) saw a gain of 32% Y-Y, generating about $1.5B in cold hard cash for studios and media conglomerates. And total home entertainment spending in the USA hit $4.63B for the first six months of this year, up 3% Y-Y.
In other words; streaming and downloads are in, physical disc rentals are on the way out. And to some degree, so are physical disc purchases. And that’s a perfectly logical development: If you can access any movie any time you want on any device, why on earth would you buy a physical copy of it that you might watch only once or twice?
As has been pointed out to me on more than one occasion, streaming doesn’t provide anywhere near the quality of a blue laser optical disc. True, and you also don’t see “buffering” on-screen messages or suffer through locked-up I-frames when watching a Blu-ray disc, unless your BD player has a problem.
Lately, I’ve been renting movies in HD resolution (1080p/60) and downloading (not streaming) them to my Nook HD+. I can watch them on a plane, anywhere in my house, or even on my family room TV or through my home theater projection system simply by plugging in an HDMI cable. That’s pretty doggone convenient, and easy to carry around.
New releases usually command a $4 to $6 rental fee at the Nook store and I have 30 days to watch any movie after paying for it. I downloaded two movies for a recent flight to Italy (Amelia and The Great and Powerful Oz; I passed on Flight for obvious reasons!) and while I enjoyed both of them, I have no desire to own either movie or rent them again. I suspect I’m not unlike many consumers in feeling that way.
Long story short; while the DEG headlines raised my eyebrows, the true story behind the numbers did not. DEG’s data clearly indicates that the trend away from physical media continues to accelerate, albeit slowly. What that means for the BD format in the near future is uncertain, particularly when MPEG4 H.265 (HEVC) is implemented in a couple of years and we will be able to stream 1080p/60 content at 2-3 Mb/s – slow enough for the average cable Internet connection.
And that’s the rest of the story…
TV, Over The Air and Everywhere!
- Published on Friday, 10 May 2013 14:35
- Pete Putman
- 0 Comments
In a Bloomberg story from May 3, Aereo chairman Chet Kanojia is calling the TV networks’ bluff. Aereo’s “streaming terrestrial broadcasts over the Internet, one antenna at a time” service, which is expanding to Boston, has stirred the ire of News Corporation (parent of Fox) and CBS.
Executives at both networks, having suffered two setbacks in court, have threatened to shut down their broadcasts completely and move to cable/satellite distribution exclusively if Aereo doesn’t relent and pay a retransmission fee to carry their New York City signals.
Kanojia was quoted in the article as saying, “The reality is, they want to get paid twice, and Aereo is just an excuse to articulate that business strategy. Good luck to them.” Practically speaking, CBS and Fox would face several logistical hurdles to pull this off, not the least of which would be answering to Congress if they did shut down their terrestrial transmitters, viewed by at least 15% of the American public.
Strangely enough, both network’s sugar daddy – the National Football League – has yet to be heard from in this kerfuffle. The NFL has repeatedly stated it does not want to sign rights deals that would restrict broadcasts of its games to pay TV channels, giving only Monday Night Football to ESPN. If CBS and Fox decided to pull their 8VSB power plugs, what would Roger Goodell say?
More importantly, how does Goodell feel about Aereo carrying NFL games for which they haven’t paid any rights? The NFL is scrupulous about enforcing so-called “public” performances of NFL games outside of bars, restaurants, and other places of public accommodation. They’ve even come after churches for hosting free Super Bowl parties in the past. So, where’s the indignation at Aereo?
I suppose if CBS and Fox went ahead with their threat, we could always fire up that ol’ Blu-ray player or smart TV function many of us don’t use. In a Home Media story also published on May 3, the Nielsen Company announced that Blu-ray Disc and transactional video-on-demand (VOD) “made significant gains as the primary means for consumers to acquire home entertainment movies and TV shows in 2012.”
According to Nielsen, 83.6% of consumers used a DVD or Blu-ray player to watch video at home, while 45.1% of the sample audience used video game console and 44.1% favored digital video recorders. The number of respondents who preferred streaming rental movies increased by 32% in the past six months of 2012 compared with the same time period in2011.
During the same interval, 29% more opted for transactional VOD to watch TV shows, 12% more preferred using Netflix to watch movies, and 24% more jumped on board subscription video-on-demand services to watch TV programs.
Intriguingly, 14% more survey respondents said they bought a Blu-ray movie over 2011, while 25% said they preferred Blu-ray for TV shows. (I assume that meant mostly boxed sets?) And you may be surprised to learn that adult female respondents who use the Internet are more likely to buy movies or TV shows on optical disc than adult male respondents.
The rise in popularity of streaming and transactional VOD may be due to the fact that of 56% of all households with broadband Internet access now have at least one TV set connected to the Internet. So says The Diffusion Group in a recent report. Streaming media players lead in the connected category for accessing streaming services, followed by video game consoles like the Xbox and PlayStation platforms. Connected Blu-ray players came in third, followed by smart TVs.
The NPD Group sees that pecking order changing soon, stating that by next year, connections through dedicated streaming boxes (Apple TV, Roku) and smart TVs will eclipse connections via Blu-ray players — another sign of people moving away from movies on discs. They also found that 40% of households with Internet-connected TVs watch videos from Netflix, 17% watch YouTube videos, and 11% watch movies and TV shows via Hulu.
So, is streaming the hot ticket? Not necessarily, unless you have the patience of a saint, says a story on the Streaming Media Blog Web site. Conviva, a company heavily involved in research and development of more effective and reliable streaming solutions, analyzed over 22 billion (yes, BILLION) video streams in 2012 with an eye toward reliability. These streams included Netflix, ESPN, HBO, Viacom, VEVO, MLB, USA, NBC, and others, said the story.
The result? 60% of all streams experienced quality degradation. Re-buffering affected 20.6% of streams interrupting programs, while 19.5% of the streams were impacted by slow video startup and 40% were plagued by grainy or low-resolution picture quality caused by low bit rates. (Check your home broadband speed sometime between 9 and 10 PM, using CNET’s Broadband Speed test. You may be shocked by the results!)
Drilling down, 60% of views were impacted by stalls, low resolution or buffering. 39.3% of streams were impacted by buffering and 4% (900 million streams) never started at all. And while many consumers are watching on a screen capable of displaying high-quality (HQ) video, 63% are viewing below HQ resolution anyway. Hate waiting in line? Conviva said that in 2012, a staggering 124.8 billion minutes were spent in buffering.
You know what? I think I’ll just go read a book. (No, make that an e-book. Wait, I have to download it first! Buffering…buffering…buffering…)
‘Black Friday’ takes on a whole new meaning
- Published on Wednesday, 05 December 2012 18:14
- Pete Putman
- 0 Comments
A story posted on the Home Media Web site states that overall consumer electronics retail sales for Black Friday declined by 5.6% from last year.
According to research firm NPD, many categories of electronics underperformed on the day after Thanksgiving. The flat screen (LCD, plasma) TV segment was one of them, with sales revenue dropping by 6%. NPD attributed this to lower average retail prices for TVs ($333 vs. $367 last year). 40% of all TVs sold had 32-inch screens, but for an average price of $194.
Interestingly, sales of TVs with screens larger than 50 inches increased by 65% Y-Y, with the 65-inch and larger category accounting for 6% of all TV sales, compared to 1% a year ago. It wasn’t hard to find 60-inch plasma and LCD sets for well under $1,000, and Sharp has discounted its 70-inch Aquos model below $2,000 on more than one occasion this year.
Notebook computers didn’t fare well, either. Sales of Windows-OS models were off by 10%, and some of that might be attributable to consumer resistance to the new Windows 8 operating system. (According to NPD, Windows-OS notebooks account for 89% of all notebook sales.) Apple-OS notebook sales were essentially flat.
The most interesting part of the story was about Blu-ray players, which saw a spike in sales of 20% Y-Y. However, revenue from BD player sales declined by 9%, no doubt due to some “bargain” door-buster pricing such as Wal-Mart’s $39 Blu-ray player offering.
The Home Media story quoted NPD VP and analyst Stephen Baker as saying that the spike in sales of BD players was due more to their ability to stream content from Netflix and other online movie services. “This speaks to people trying to get content [from the Internet] onto their televisions and not necessarily getting a single device that doesn’t give them flexibility [between physical and digital media],”he stated.
Baker also said that sales of Roku, Apple TV, NetGear, and other streaming devices were also up significantly on Black Friday. Earlier reports of Blu-ray disc sales ramping up during the same time period apparently had more to do with bargain-basement pricing on these discs, including some specials for less than $10.
From the sound of it, Black Friday wasn’t all that swell for retailers, who traditionally peg that day on the calendar when their balance sheets turn positive for the year. That means you are likely to see even better deals on televisions as we get closer to Christmas and move into the January football playoff season.
When a Butterfly Flaps Its Wings – Pete Putman
- Published on Wednesday, 26 September 2012 17:11
- Pete Putman
- 0 Comments
Two weeks ago, I wrote about the decline in television sales and how manufacturers are scratching their heads trying to figure out a way to kick-start consumer interest and get those cash registers jingling again, as the all-important 2012 holiday selling season is barely two months away.
Misery loves company. Hollywood is in a similar pickle as declining sales of movies on optical disc and increasing use of streaming video-on-demand (SVOD) are challenging revenue projections, particularly for ‘weak’ theatrical releases that could previously count on back-end physical media sales to make up revenue.
The steady decline in optical disc sales and rentals since 2005 has been well-documented by myself and other industry analysts, and has been tracked and confirmed by a number or research organizations. While it is true that Blu-ray disc sales continue to grow, they haven’t made up for the drop-off in DVD sales and rentals – and are unlikely ever to do so.
What’s ‘hot’ these days is streaming and playback of movie and TV show files on portable devices. On a flight back from California last week, the passenger next to me enjoyed Battleship on an iPad, downloaded from iTunes. While making a trip to the restroom, I noticed at least ten other passengers watching video on tablets, e-readers, and even a smart phone.
In contrast, just about every laptop I spotted appeared to be open to a word processor or spreadsheet program. I had my Toshiba laptop with me on the flight, along with a couple of Blu-ray movies, but the combination of a tight middle seat and a very large passenger to my right made using my laptop difficult, so I opted to read an eBook on my Nook Simple Touch instead.
But I digress. In a recent Home Media article, Viacom CEO Philipe Dauman was quoted as saying that the continuing decline in optical disc sales has led Hollywood to change their economic model, forcing producers, directors, and actors to share in the risk of a movie and reap any rewards at the back end instead of getting a large upfront payment.
“We don’t mind sharing the upside [of a movie with talent] as long as we don’t have a downside, or we have a sharing of that risk,” said Dauman. “Digital revenues are growing, but it’s not a perfect transference [with disc sales] at this point.” As a result, Viacom is one of many content owners seeking to make up revenue by licensing programming to SVOD companies Netflix and Amazon Prime Instant Video.
Some movies are produced exclusively for DVD and Blu-ray sales. This is a big part of Disney’s revenue stream, as they are the largest producer of packaged media. But Disney has already taken steps to move to a SVOD model, ramping up a digital delivery portal two years ago to transition away from physical media for its ‘direct to disc’ releases.
The explosive growth of packaged media in the 1980s and 1990s – something Hollywood vigorously fought against at the start – turned out to be a very profitable business in the end, and strong sales on VHS and DVD after a theatrical run made it possible to ‘greenlight’ some movies that otherwise would have been major box office flops. (The Austin Powers series is a good example.)
But the butterfly started flapping its wings about seven years ago with the first stirrings of streaming video (YouTube). That gentle breeze has now turned into a storm, with movies and TV shows watched across an almost bewildering variety of platforms.
And that storm is impacting TV sales as well. With new e-readers from Amazon and the latest iPhone now coming to store shelves, buying a new TV or upgrading an older model isn’t at the top of nearly as many holiday shopping lists as it would have been two years ago.
Even the digital video recorder – an integral part of the transition to digital TV a decade ago – is threatened by SVOD. A recent Advertising Age article points out that media companies and ad buyers are anticipating a day in the near future where demand for ‘anywhere, anytime’ playback will displace the ability to skip advertising.
According to Alan Wurtzel of NBC Universal, “Video on demand is going to play a major role in how people consume video going forward.” Subscribers to SVOD services can already watch recent episodes from major broadcast networks and a few pay TV channels ‘on demand’ on almost any device, but they give up the ability to skip advertisements.
Not surprisingly; TiVo, the company that basically invented the DVR, is in the thick of this transition. The article quoted Tara Maitra, senior vice president for TiVo’s content and media sales and operations, as saying that consumers really don’t care how they access programming as long as it is on their own terms.
What does all of this portend for the display industry? Simply that consumer demand, going forward, won’t be for big, cheap, and thin televisions stuffed with apps and other goodies. No; it will be for small, ‘go anywhere’ displays that offer higher resolution, brighter screens, improved viewing angles, and enhanced sound. And consumers will demand improved wireless access with higher broadband speeds to fully enjoy movies and TV shows, served up from ‘the cloud.’ (Can’t have a storm without clouds!)
It all starts when a butterfly flaps its wings.