M+E Daily

At Blu-Con: Studios Ready 3D Holiday Push, Frame Release-Window Debate

By Marcy Magiera

BEVERLY HILLS, Calif. — DEG: The Digital Entertainment Group couldn’t have gotten a bigger headliner for its Blu-Con 2010 conference here or a more ringing endorsement for the Blu-ray format than it got from filmmaker James Cameron.

Cameron appeared at the Nov. 2 event at the Beverly Hilton with producer Jon Landau to walk attendees through Pandora as seen on the “Avatar” Three-Disc Extended Collector’s Editon, due Nov. 16 from Fox. He lavished praise on the format as he showed features created for the new release, including additional footage rendered specifically for the Blu-ray and new documentaries.

“On Blu-ray, you can see the one-to-one relationship of what the actors did to how it was translated in the movie,” Cameron said.

“We know that going forward, more consumers are going to see movies in their homes. Blu-ray is the best way to do that,” said Landau, who with Cameron spoke for a full hour. “Avatar”’s earlier release in its original theatrical version has already shattered all format records by selling more than 8 million Blu-ray units worldwide and 5 million in the U.S.

Perspective on 3D

Though “Avatar” will not see general release this year in Blu-ray 3D (i.e., outside a hardware bundle), as many as two dozen titles will, said Blu-Con participants. In a DEG-coordinated effort, 10 titles from Warner, Sony and Disney will be released at retail on Nov. 16 (the same day as the non-3D “Avatar”).

DEG is creating a Blu-ray 3D demo reel that will be available to stores before Black Friday, and “3D University,” a guide for use by retailers and the press in educating consumers, said Kris Brown, Warner’s VP of worldwide high def market expansion and leader of DEG’s 3D task force.

“Any indications that content was struggling were premature,” Brown said. Nevertheless, “some studios are sitting on some content and could be a little more liberal” with releases, he said.

Presidents frame windows

Much of the discussion during Blu-Con’s “Presidents Forum,” moderated by financial analysts Michael Nathanson of Nomura Securities and Spencer Wang of Credit Suisse, focused on projections of when Blu-ray will return the packaged media business to growth — as well as on the proliferation and shuffling of release windows.

Warner Home Video president Ron Sanders, who is president of DEG, said that so far this year, standard DVD sales have declined 14%, while Blu-ray sales have grown by 86%, positioning the newer format to begin pushing combined physical media sales back into positive growth.

Other panelists agreed with the growth figure for Blu-ray. “’Avatar’ broke down the wall,” said Twentieth Century Fox Home Entertainment president Mike Dunn, noting that “Blu-ray has become mainstream now. People are replacing DVD decks with Blu-ray regularly now.”

The installed base for Blu-ray in the U.S. is projected to be 25 million by the end of 2010, or about 20% of households, according the Blu-ray Disc Association.

Pressed by the analysts on windows, particularly the 28-day delay in shipping new releases to Netflix and Redbox instituted by some studios, most studios said they have seen an increase in sell-through for titles that have the windows. Warner has seen a 10% to 15% increase in consumer sales on big titles, as well as a bump in VOD and no corresponding decline in rental, Sanders said.

Those results were echoed by Dunn and Universal Studios Home Entertainment president Craig Kornblau, though all agreed that there is the potential for increasing confusion among consumers about what product is available when and on what formats.

Though the studios in most cases make titles available to cable VOD and digital services at the same time as their physical release, they have so far been unable to create much consumer interest in purchasing permanent electronic copies of their movies due to inconsistent experiences, storage issues and the fact that there are still barriers to moving titles from a computer or portable device to the TV, panelists said.

“The number one issue is the digital locker that can delivery content to the right device at the right time,” said Dunn. It’s an issue the studios hope to resolve with the eventual implementation of DECE’s Ultraviolet feature.

Blu-ray creates new retail opportunity for catalog

“It feels like we’re right on the cusp of a big opportunity on the catalog front,” Universal’s Kornblau said during the presidents’ panel, citing the studio’s success with the “Back to the Future: 25th Anniversary Trilogy” release. Sony’s Bishop echoed that, saying the studio is seeing double- and triple-digit growth in Blu-ray catalog.

During an afternoon panel on opportunities for Blu-ray catalog, Warner Home Video executive VP and general manager of theatrical catalog Jeff Baker emphasized that the biggest challenge to the catalog business is shrinking shelf space at retail for standard DVD. Retailers are often willing to make space, however, for event titles on Blu-ray, he said. As a result, the studio — which has released only about 2,300 of the 6,700 titles in its library on DVD — is building its catalog strategy on prestige titles that can make a splash on Blu-ray.

“As [the] standard-def [market] contracts, it creates the opportunity to bring out more Blu-ray catalog,” Baker said.

The event strategy is being embraced by other studios as well: Panelists showed clips from catalog releases “The Bridge on the River Kwai” (Sony), “The African Queen” (Paramount), “The Sound of Music” (Fox) and “The Exorcist” (Warner).

Baker said he does not expect to see many catalog releases in Blu-ray 3D, due to the cost ($4 million to $6 million) of conversion.

In the coming months, all the major studios will bring attention to the potential of Blu-ray for enhancing catalog titles through a DEG partnership with The Film Foundation. A short video that will appear on many studio Blu-ray releases features Film Foundation board members and Martin Scorsese and Clint Eastwood speaking about the films that inspired them (“The Red Shoes” for Scorsese and “The Leopard” for Eastwood), the importance of film preservation, and the potential of Blu-ray to aid in preservation.