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Industry practitioners speak
In a series of Q&As, professionals in all facets of the packaged media industry share their views of things past, present and yet to come. It’s the turn of ANDREA SOLTESZ, Managing Director of authoring and production company Media Vision Ltd in Budapest, Hungary.
DVD celebrated its 10 anniversary last year. How many more years are we going to see DVD around? Are there lessons in the development of the DVD format that could/should be applied to Blu-ray?
Volumes will obviously decreased, but DVD has another 5-10 years in front of it. The lesson we have learnt from DVD relates to the wrong pricing in the Hungarian movie market. Two years ago independent publishers there started to release titles at a normal price, but barely two months later reduced that price on virtually all titles dramatically.
Consumers stopped buying DVD at normal price level and waited until it get cheaper. The result is that, nowadays, new titles are released from the outset at the lower price. This definitely should not be done with Blu-ray Disc. I do hope that the independent publishers have also learnt the lesson.
Do you think Blu-ray discs will eventually replace completely DVDs or will they only partially replace them, becoming a niche, albeit big?
In my opinion Blu-ray discs will become a niche and will not replace DVD completely. Many people are satisfied with the resolution of DVD and they are not keen on investing in HD technology. It is different now than it was with VHS and DVD. The target group for BD is different from the ones for DVD.
The unexpectedly rapid fall in price of Blu-ray discs, so early in the commercialisation of the format, makes the economics of BD authoring and replication very challenging especially given the heavy investment required. What needs to happen to make it a viable, long-term business for independents?
Yes, it is really challenging for authoring studios. Our experience is that it is always with the studios that publishers want to start cutting costs. In my opinion, the AACS costs should be reduced, they are currently too big a proportion of total costs. The licensing costs should accommodate small markets like Hungary to come together to produce regional releases and, thus, make the BD format viable.
Interactivity and BD-Live, in particular, are Blu-ray's key unique selling propositions. Do you think enough publishers and studios will commit extra production resources to spread its usage? Which feature do you think may become a killer app? Or will consumers be mostly interested in no-frill 'vanilla' film-only – and cheaper – BD discs?
The problem is that BD-Live has enormously high costs associated with it, which kill its potential. Consumers are amazed by these capabilities, but at the end the publishers will decide to have a cheaper film-only BD disc. The main point is always the costs. On the other hand, our experience is that sadly many people still do not have any clue as to what Blu-ray is, and often people want to play a BD disc on a standard DVD player or DVD drive. Yet another group of consumers expects BD discs will become cheaper and they wait to buy them.
It is said that diversification is the best way of staying afloat in the face of market uncertainty. How to you see your company's range of services evolving over the next 2 to 5 years?
Diversification is the rule of the game. Earlier we had been active mainly on the movie market with authoring, but recently we have engaged into new directions like complete planning and construction of home cinemas installations, which is somehow related to HD technology. Blu-ray has pushed up interest in the cinema at homes.
Films on solid state/Flash memory, Holographic disc, 4,000-line Super high-definition, Networked TVs, 3D home entertainment are advanced technologies at varying state of development. Do you see any of them entering the consumer market and, if so, in what time frame?
Film on solid state is widely spread in Hungary, especially with young males between 18 and 30. Unfortunately, too many young people are 'fan' of piracy and downloading. Many of them are not even aware what intellectual property is. Networked TVs are more and more popular with families. 3D movies have just entered the market.
Contact: www.mediavision.hu...
On predicting the future
Predicting the future, let alone the future of packaged media, is a perilous exercise, and possibly counter-productive, as the exercise closes doors rather than keep them open, argues JEAN-LUC RENAUD, DVD Intelligence publisher. Consider that: Apple was left nearly for dead 15 years ago. Today, it became the world's most valuable technology company, topping Microsoft.
Le cinéma est une invention sans avenir (the cinema is an invention without any future) famously claimed the Lumière Brothers some 120 years ago. Well. The cinématographe grew into a big business, even bigger in times of economic crisis when people have little money to spend on any other business.
The advent of radio, then television, was to kill the cinema. With a plethora of digital TV channels, a huge DVD market, a wealth of online delivery options, a massive counterfeit underworld and illegal downloading on a large scale, cinema box office last year broke records!
The telephone was said to have no future when it came about. Today, 5 billion handsets are in use worldwide. People prioritize mobile phones over drinking water in many Third World countries.
No-one predicted the arrival of the iPod only one year before it broke loose in an unsuspecting market. Even fewer predicted it was going to revolutionise the economics of music distribution. Likewise, no-one saw the iPhone coming and even fewer forecast the birth of the developers' industry it ignited. And it changed the concept of mobile phone.
Make no mistake, the iPad will have a profound impact on the publishing world. It will bring new players, and smaller, perhaps more creative content creators.
And who predicted the revival of vinyl?
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