An industry executive speaks

In a series of Q&As, frontline practitioners in all facets of the packaged media and digital delivery industry share their views of things past, present and yet to come. It's the turn of ANDY EVANS, Co-founder and MD of The Pavement in London.

Where do you see your company's comparative advantage/uniqueness in this crowded market?

I don't think crowded is the word anymore seeing as there are very few places still offering Authoring as a primary service. The Pavement still has a unique angle in that it services Music, TV and Film pretty evenly, and we are still often asked to produce the occasional larger scope and budget titles that requires a little more than your regular disc.

Amongst the range of services you offer, which one did grow in importance over the past 2 years and which one diminished?

Our mobile Apps grew for sure along with our new post work - trailers, promos, editing and filming. Both disc-based Digital Copy and BD-Live came along, but not in any great volume. In the independent market, you need a pretty special title like The Inbetweeners Movie to justify these extra features. For the majority I can imagine BD-Live and Digital Copy went by in the blinking of an eye.

We also find ourselves having the same conversation with clients including UltraViolet and other digital delivery platforms that may see new growth in those areas. No service grew in importance, but what did grow was the need to change how we make discs as volume, low budget, simple titles are the way things are going so we're actively adjusting our processes to streamline and try make it worthwhile doing the work.

Diversification is supposed to be the best way of staying afloat in the face of market uncertainty. How do you see your company's range of services evolving over the next 2 to 5 years?

I don't see us growing our DVD ad Blu-ray capacity, but rather managing its decline as a service we offer as we grow in others. It's hard to see how many of the independents will not be tempted to go to the big guys like Deluxe and Sony DADC who do offer a much wider range of services for a lower cost. As budgets get squeezed, I see a lot of the work going that way, so as much of the work as possible gets done in one place - DVD, Blu-ray, UltraViolet, iTunes, VoD, etc. I just hope the quality stays high.

The Pavement does not offer the complete range of deliverables, so I expect us to remain further up the food chain and focus on creating product, which could mean either move out of the authoring market completely or just focus on the clients that want to work with us like some music and director-led programmes.

Our diversification is coming from new integrated areas with sister company Goldcrest, which include short-form post-production (trailers, promos, epks, etc), mobile App development and a studio in New York opening up this Winter.

One keeps hearing alarmist opinion about the rapid demise of packaged media in the face of online delivery. What is your view as to how long discs will be around? And what could become its main target market?

I think packaged media has a fair few years to go because of the money it still brings in, and even at a year-on-year decline of 11%, it's nowhere being made up by online. Online just can't replace the profits yet for a few years. Anyone engaged in authoring will just need to find a way to make money out of it as surviving solely from authoring just can't happen.

The ever lower margins on Blu-ray discs makes the economics of BD authoring and replication very challenging. What needs to happen, what features need to be added, to make it a viable business for independents?

The new authoring features brought about by Blu-ray are not really sought by clients as they generally only add cost and lengthens the production time. I'm talking features like BD-J menus and BD-Live. In fact, at times I wish HD-DVD had won the war as it would have pretty much satisfied the majority of the requirements on Blu-ray today and saved a lot of money for everyone in AACS licensing costs and replication upgrade to the manufacturing lines.

I don?t think there is anything you can do as clients simply need discs made as cheap and as fast as possible most of the time. It's going so bad as of late that many requests we get for creating a Blu-ray title - which can take up to 40 man hours - have a budet that is less than the cost to duplicate a HD master tape - approximately 3 man hours.

Do you see the arrival of 3D as the shot of adrenaline the Blu-ray disc format badly needed to progress in the market, or do you think consumers will eventually make a success of Blu-ray irrespective of whether 3D develops?

I just can't see it making that much of an impact. What's more important will be the development of glasses-free 3D, and the ability to make and sell Blu-ray 3D titles with no consumer confusion which I have seen. People do not realise that a Blu-ray 3D title will play in 2D on their standard HD screen. We are probably one of the few authoring facilities in the UK that offers full 3D services, and we expect to make approximately 10 3D titles by the end of 2012 - not a great volume.

Given the apparently slower than expected take-up of 3D, do you thing 3D is here to stay or consumer interest in stereoscopy is temporary?

I'm sure it's here to stay, but I'm not sure about how it will grow, mainly because of the poor consumer marketing that has surrounded Blu-ray 3D compared to the cinema 3D.

Do you think the consumer take-up of 3D depends on the arrival of glasses-free autostereoscopic solutions? If yes, how many years do you believe consumers will have to wait for a high-quality glasses-free system to rival the existing active shutter glasses 3D systems?

As I said above, I think it will definitely have a positive impact, but I'm on the fence as to the level of that impact. There's a chance that consumers might have lost interest as 3D loses its new sex appeal.

Cloud-based UltraViolet digital copy is making inroads. Do you see it as potentially increasing the sales of BD discs (as the studios intended) or be the death knell of packaged media?

I think it's a great idea to try and extend the life of packaged media whilst introducing customers to cloud-based digital delivery. As it stands, it's still only in the reach of Hollywood studios as the entry cost for independent labels is just too high. So, just like BD-Live, BD-J, and a bunch of other Blu-ray features, there is a danger that independents will never really grasp UV or it will take quite some time to get there because of costs.

From an authoring house perspective, we're already set up to deliver UltraViolet Common File Format files, but outside of that, the set up to deliver is out of our financial reach. We just look at UV as any other tool in our armoury that we can call on in developing a prodcuct for a client.

What do you see as the opportunities, but also the pitfalls associated with Digital Copy on a disc?

Opportunities for who? None really for the authoring house or replicator unless they are also doing the delivery. Also, many clients who have tried it just haven't made any money unless they had a perfect title - and then they only broke even. The benefts are that consumers still get a sense of ownership, but these are outweighed by the problems of incompatabilities across various devices and companies who try and lock you into their ecosystem.

How to you see Hollywood squaring the circle between the inexorable fall of high-revenue producing packaged media and the unstoppable rise of low-revenue generating online digital delivery?

They can't. DVD was a unique moment in time - almost entertainment utopia. The good times of DVD will never be seen again. The world loved and adopted DVD from every angle no matter who you were, or what you did, but now with so many platforms, formats, devices, and a new generation of kids - there just won't be the same effect ever seen again anywhere on anything.

How much of a revolution smart TV represents, given that consumers are already comfortable using other screens (laptops, tablets, smartphones) to access Internet-delivered content?

I personally just don?t think smart TV offer that much. The ones I've experienced just seem so clunky and old school. Whilst they have all this connected abiliy, how much of it do you really want to share with your family and friends. I can see how mum and dad will enjoy the TV, whilst the kids are interacting with the same programme via a second screen. That generation is expecting things very differently to the ones that has the money to buy DVDs.

4,000-line Super HDTV is pointing on the horizon. Do you anticipate this to be the next TV format? If so, could it lead to the arrival of a next-generation larger-capacity Blu-ray disc to deliver this content, given that broadband could be inadequate?

I find it hard to believe that there will be a higher capacity disc delivering 4,000 super HD content, when they are struggling to sell Blu-rays carrying standard shot HD produced programming. To shoot and produce content in 4K just wont happen for some time. So much of the content will be standard HD. I think the focus should first be on quality programme-making before catering for 4K. A badly written and produced story is rubbish in any resolution.

If you let your imagination run wild, what system, format, application aimed at delivering content to the home would you like to see implemented in 10 years time?

Wow! Tough one. I'd love there to be a revival of the old school, just like with vinyl. A huge section of the market rejecting all these new multiscreen, multi-device, subscription -based, no physically owned content, uzi-9mm-superduper whizzbang content transmitted directly into your brain-delivery mechanism??and a demand continues for a lovely shiny disc you know how to work with your favourite film to watch, with no interruptions or adverts selling you something. Oh yes, and trailers you can skip on a Disney disc :-)

Contact: www.thepavement.com.
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