"The picture is not as bleak as the press would like you to believe," claimed Magnus Hollo, MD, Sony Pictures Entertainment, at the recent Futuresource conference in London. The decline of DVD shows sign of phasing off and Blu-ray is growing.

Hollo sees encouraging signs. While not the success predicted, 3D has reinvigorated packaged media, re-engaged consumers. And the arrival of 4K will give another lease of life to the Blu-ray disc as the best-suited ultra-HDTV content carrier to the home. "All this bodes well for the packaged industry."

Blu-ray discs are impacting numerous markets. The Sony executive noted that in Latin America, BD already accounts for 50% of total disc sales. "Blu-ray is still growing and is good for us."

Colin Lomax, MD, Anchor Bay, reminded that, in the UK, packaged media is still a very significant £1.5bn business. "International sales of discs paid for our original TV series. Packaged media do represent an important portion of the financing of expensive series."

Though rising, digital delivery revenues are a long way from making up for the diminishing returns from discs. It is therefore critical to prolong the life of packaging media. "How you transition packaged revenue to digital revenue is the key question," Lomax says.

Same echo from Dan Gopal, SVP, Global Digital Media and Home Entertainment, ITV Studios. "Though declining, discs are still a very large business. We work hard at prolonging and maximizing our share of this sector. We are lucky because our audience is skewed toward older consumers less comfortable with digital downloading. Hercule Poirot is doing well [on disc]. We are repackaging content, repricing it, with an eye on margins."

Gopal says that high street retailers are important as they account for nearly 40% of disc sold and 70% in terms of revenue. "The DVD market is incredibly resilient considering what has happened in the UK the past 4-5 years with Virgin, Blockbuster, Zavvi, HMV, Woolworths closing down. We need a high street presence for selling discs, and the revival of some HMV stores is good news." Gopal believes release windows will evolved, "but let's make sure it does not kill off DVD."

Futuresource was running a live online focus group with 40 selected respondents on that subject. Feedbacks revealed that a few stopped buying discs essentially because, having built a huge collections, storage space became an issue. Another reason is a behavioral change toward subscribing to services like Lovefilm, Netflix or exploring other digital options.

Most respondents said they were still buying discs, but were much more discerning, focusing on specific titles. Downloading or streaming still registered "lowish" levels of activities, with a preference for the streaming model like Netflix.

What would push respondents to purchase more movies online? If the digital versions were made available earlier and if the price was more competitive, but also if they knew about it. It was suggested that the release date of the digital version could be indicated on the disc.

Awareness of the cloud-based digital distribution system UltraViolet will give headaches to its backers.

Out of the 40 online focus group respondents, virtually no-one knew about it. Misinformation abounds. Some thought it was "a way to improve the making of a disc," "a new X-ray technology," or still "new radiation technologies."

"We are turning the corner in the US where already 10 million members have signed up to UV, 10% of households. The feedback is very encouraging," claims Hollo, unsurprisingly, as Sony is a major UV player.

In the UK, spearheading UV in Europe, the oft-announced marketing efforts are yet to get underway. DVD and Beyond understands that the kickstart is delayed by the dearth of retailers coming on board. The DECE consortium behind UltraViolet is yet to officially confirmed that former Tesco entertainment head Rob Salter is appointed to lead the rollout of UV in the UK, as has been already reported.

"It's still a long way to go in the UK. The concept is great, but if we do not crack it soon, it will be lost. There is a lot of confusion about it. A lot of education is needed," says Lomax. "We independents always follow what the big studios are doing. And they have yet to be very active here."

As for Gopal, the ITV focus is more on consumer access whether it's UltraViolet or another delivery platform. The key is marketing the same title via the right platform to the right audience segment. "There is a long way for consumers to be conversant with the [UV] system."

Story filed 10.07.13