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 NEIL GOODALL, CEO of Testronic Laboratories.

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?

DVD is still going to be around for many more years. It has a very strong embedded base and there is a much less compelling need to replace DVD with Blu-ray as there was to replace VHS with DVD. The most important take away from DVD that needs to be applied to Blu-ray is that it must be inexpensive enough to appeal to 2nd and 3rd tier content owners. Right now, it is a very expensive proposition to produce a Blu-ray disc, so the vast majority of content comes from the major Studios.

The good news is that 2009 will see significant cost reductions and therefore more content owners releasing product on Blu-ray. From a technical perspective compatibility has been an ongoing struggle in DVD and only reached a level of stability/acceptance in the last couple of years. The complexity and options for creativity of BD authoring will only magnify this issue.

Do you think Blu-ray discs will eventually replace completely DVDs or will they only partially replace them, becoming a niche, albeit big?

Yes, but much more slowly and organically than DVD replaced VHS. Unlike the rush of consumers in 1998-1999 to purchase DVD players, consumers are not rushing to replace their DVD players with Blu-ray players. However, when they upgrade to HDTV’s or need to replace a dead DVD player, they are highly likely to purchase a Blu-ray player especially since it is backward compatible with DVD. Eventually, Blu-ray will have a strong enough embedded base to dislodge DVD as the primary videodisc format.

The unexpectedly rapid fall in price of Blu-ray discs, so early in the commercialisation of the format, makes the economics of BD production very challenging especially given the heavy investment required. What needs to happen to make it a viable, long-term business for independents?

Clearly the upfront investment needs to reduced. However, this is already happening. Discussions are ongoing to reduce the AACS fee, which is the biggest roadblock to independent adoption of Blu-ray. In addition, a paradigm shift must take place in the way that producers look at Blu-ray vs. DVD. DVD is a media disc with a little bit of programming. Blu-ray is software. To truly take advantage of Blu-ray’s advanced capabilities, a different development approach is required, which should include QA throughout the development lifecycle. The earlier that QA is introduced into the workflow (game only testing, BD-J pre-qualification, etc.), the less expensive and more successful the final product will be.

That being said, it is possible to treat Blu-ray as merely media disc. In order to make this approach a success, workflows need to be streamlined and tools need to be developed to reduce the burdensome costs of Blu-ray disc production. Just as the introduction of Apple’s DVD Studio Pro markedly changed the production landscape of DVD, new tools will be introduced in the near future to enable the creation of simple Blu-ray discs, while more complex discs, using a software development approach, will remain in the hands of the large authoring facilities.

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?

BD-Live is, first and foremost, a marketing tool. Imagine popping in a Blu-ray from a major Studio and you are immediately offered an exclusive sneak peak at a new film from the Studio opening in two weeks. Few consumers will turn down that opportunity and once they have clicked into the Studio’s BD-Live portal they can be presented with other offers, games, prizes, whatever. The cool part is that 3 months later, if a consumer pops in the same disc, he or she can be presented with a whole new set of offerings for the Studio’s next set of releases.

Second, it can be used as a community building tool, but, to a certain extent, the community already needs to exist. The best example is the soon to be released box set from Neil Young. The ability to upload consumer content in the form of pictures which are then immediately available to anyone with the discs is remarkable. Of course, what makes this work is the already intensely loyal Neil Young fan base.

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?

Through design, rather than luck, Testronic Labs is well positioned to thrive as content delivery continues to converge over the next five years. Back in 2006 we recognised that not only are Blu-ray players being connected to the Internet, but also many other consumer electronic devices, including televisions. As CE devices continue to gain more and more computing power, convergence is finally going to become a reality.

Along with testing spinning discs, Testronic Labs is already involved with QA/QC of websites, console and web-based games, digital television, video-on-demand, and hardware (USB, DLNA, etc.). Our expertise in all of these areas uniquely allows us to serve our clients during this evolution of content delivery to the consumer. So we are not going to leave DVD and BD behind but use it as the entry point to embrace all of this convergence.

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?

We are talking about several things here. 3D, a content based advancement, will surely hit the market sometime in 2010, with many more titles arriving in 2011. The Studio’s theatrical 3D pipelines are full, with dozens of new releases planned over the next few years. They will not be satisfied with only releasing this content in the theaters or in the weak anaglyph (red/green glasses) format. In case of the on-line distribution formats, IPTV and WebTV will also enter the living room in next 5 years but mass adaptation will heavily depend on the development of broadband internet connection, standardisation and content protection in this field.

Networked TV’s are already here and will continue with an organic penetration, much as Blu-ray, as people replace their TV’s. Solid state movies are a potential successor for the next physical format, if they manage to work around the format's perception of low value, but the need for such a format will diminish as broadband continues to penetrate into households allowing for high quality video delivery without physical media.

However, video-on-demand has been available since the early nineties, yet here we are in the midst of the successful launch of a new physical format, which tells me that we are at least a decade, if not more, out from the death of packaged media. Lastly, I think that next gen disc formats will most likely have a future in the storage business but is less likely to have a huge HE future.

Don’t underestimate the consumer. We pundits like to attempt to predict the future, but there are far more unsuccessful product launches than successful ones. Each and every one of those were conceived, developed and launched by very smart people, and the consumer didn’t bite. Shows how much we all really know. Just like everyone else, all of us are looking for the next hit device or killer app and working hard to position our companies to take advantage of it when it shows up.

Contact: www.testroniclabs.com
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