http://www.videobusiness.com/article/CA6671823.html
Connecting with... David Bishop
Q&A: Sony Pictures Home Entertainment's president says the 'sky is not falling' on home entertainment
By Susanne Ault -- Video Business, 7/17/2009
JULY 17 | Q&A: This is the first in a series of conversations with key home entertainment executives about the changing nature of the business. David Bishop is president of Sony Pictures Home Entertainment.
VB: There has been quite a bit of media attention on the decline in DVD sales. What is your take on what is happening with physical media? When and how will the home entertainment business return to growth?
Bishop: Well, as far as the home entertainment business is concerned, the sky is not falling, as some pundits would have you believe. There are clouds, but I see Blu-ray peeking through them to signal a strong future for our business.
While there has definitely been a decline year to date in the overall sales of physical media, it continues to also be a strong revenue generator for the studios. It also remains one of the most cost effective means for a family to consume entertainment.
We are also seeing evidence that despite consumer sell-through revenue being down, gross shipment revenue is only slightly off. The reasons for this slight decline are twofold: Rental spending has increased during the first half of 2009, and Blu-ray is constituting a larger percentage of shipments. These factors suggest that Q4 2008 may have been the worst part of our downturn.
Blu-ray discs will be one of the major keys to renewed growth in the category.
Additionally, there are several opportunities that are present to further ensure SPHE's success. Among them are digital downloading/streaming; alternative distribution formats including MOD and flash drives; increased retail space; and portability and connectivity on any desired playback devices.
VB: Blu-ray is clearly an opportunity to return growth to the maturing packaged media business. Is the format where it should be in terms of adoption? Is it on track for the mass market?
Bishop: Blu-ray is on track to reach mainstream status, and we are very pleased with the format’s overall performance and growth both from a software and a hardware perspective. News of the doubling of BD set-top players in first-quarter 2009 over Q1 2008 sales is a very encouraging sign. Even in this challenging economic climate, there was a nearly 100% growth in BD software sales during the second quarter of 2009 over the same period last year ([according to] DEG). We are continuing to see the percentage of a title’s overall sales increase on Blu-ray, with some key titles spiking at 15% or higher.
There's clearly a hunger in the market for high-definition content (particularly with the increasing HDTV penetration amongst U.S. households), and Blu-ray provides the absolute best in high-definition for the home. Out of the 40% of U.S. households that have an HDTV, more than 30% of those households are Blu-ray-enabled homes.
VB: What are your plans for continuing to promote Blu-ray to consumers? At the moment, ads mostly mention that titles are available in Blu-ray, but don’t elaborate. Will there be further promotions about the advantages of going Blu-ray in general?
Bishop: We are continuing to call out Blu-ray on all of our marketing efforts for new release titles, in print, TV and online ads. Additionally, we use innovative promotional efforts to showcase our new-to-Blu-ray catalog releases, emphasizing the significant improvement in picture and sound quality, as well as the unique interactivity such as BD Live and additional high-definition content.
Additionally, SPHE continues to develop promotions and retail displays to showcase Blu-ray, as well as furthering our online reach with e-mail blasts to our user base about Blu-ray.
Most important, of course, SPHE continues to develop new and exciting added-value content, with an emphasis on BD Live. Among our latest is what we believe will be BD Live’s “killer app,” MovieIQ. With a MovieIQ-enabled Blu-ray Disc and an Internet-connected Blu-ray player, movie fans can immediately access continuously updated information on cast and crew and explore relevant trivia such as production facts, music and soundtrack information all tied to scenes within the movie. These kinds of organic yet compelling features are what, we believe, will drive Blu-ray into the mainstream.
VB: Sony is in a unique position having resources in every part of the evolving home entertainment world, both in hardware as well as software. Will SPHE ramp up cross-divisional marketing in these areas?
Bishop: We continually work with our Sony sister companies to develop a unified message targeting both consumers and retailers. This includes creatingenticing Blu-ray propositions that combine the best in hardware and software, as well as creating educational messaging campaigns to drive home some of the key attributes of Blu-ray as a format.
For example, we are working on a BD Live piece with Sony Electronics that will show both the ease of connecting your Sony Blu-ray player to the Internet and accessing exclusive BD Live content with Sony Pictures Blu-ray titles.
Additionally, we have partnered with the Sony Rewards team to create the Sony Pictures Blu-ray Club, wherein users can register their Sony Blu-ray Discs via BD Live to earn points that they can then redeem for cool Sony products. We work closely with our hardware partners and always strive to collectively offer the best high-definition experience for our Sony customers.
VB: We understand that you recently began overseeing Sony Pictures’ downloading/streaming operations. How does that business fit with your packaged media business?
Bishop: While there are certainly key distinctions between digital distribution and physical media, there are also a number of similarities between both businesses. The transactional models, specifically electronic sell-through (e.g. iPod downloads) and VOD, are similar from a consumer standpoint to our traditional sell-through and rental business in that we are trying to drive consumers to buy and rent SPHE products. These transactional models behave similarly and need to be managed coherently, which is ultimately the rationale for our reorganization. We can now manage the business across all titles, optimize marketing across all formats and provide multiple delivery options for our consumers.
VB: How do you plan to maximize both physical and digital distribution? How might that be different from how you managed blockbusters from a couple of years ago?
Bishop: By utilizing both physical media and digital distribution, we’re able to offer a choice to the consumer. This choice allows them to enjoy their movie in pristine high-definition in the home, in standard-definition (for those who have yet to upgrade to high-def), or as a download for on-the-go viewing via their PC or favorite portable device. We also offer the option to purchase or rent in a variety of formats, rounding out the wide array of options we can provide today’s consumers.
In the past, we were more focused on the breakdown of how many DVD units were needed for sell-through and rental. But now, as the home entertainment spectrum has rapidly expanded, we must look at successfully fulfilling all methods of distribution. In order for the home entertainment industry to continue to grow, we must be smart and adapt to ever-changing consumer behaviors and the evolving landscape of physical and digital media.
http://www.videobusiness.com/article/CA6671823.html
Connecting with... David Bishop
Q&A: Sony Pictures Home Entertainment's president says the 'sky is not falling' on home entertainment
By Susanne Ault -- Video Business, 7/17/2009
JULY 17 | Q&A: This is the first in a series of conversations with key home entertainment executives about the changing nature of the business. David Bishop is president of Sony Pictures Home Entertainment.
VB: There has been quite a bit of media attention on the decline in DVD sales. What is your take on what is happening with physical media? When and how will the home entertainment business return to growth?
Bishop: Well, as far as the home entertainment business is concerned, the sky is not falling, as some pundits would have you believe. There are clouds, but I see Blu-ray peeking through them to signal a strong future for our business.
While there has definitely been a decline year to date in the overall sales of physical media, it continues to also be a strong revenue generator for the studios. It also remains one of the most cost effective means for a family to consume entertainment.
We are also seeing evidence that despite consumer sell-through revenue being down, gross shipment revenue is only slightly off. The reasons for this slight decline are twofold: Rental spending has increased during the first half of 2009, and Blu-ray is constituting a larger percentage of shipments. These factors suggest that Q4 2008 may have been the worst part of our downturn.
Blu-ray discs will be one of the major keys to renewed growth in the category.
Additionally, there are several opportunities that are present to further ensure SPHE's success. Among them are digital downloading/streaming; alternative distribution formats including MOD and flash drives; increased retail space; and portability and connectivity on any desired playback devices.
VB: Blu-ray is clearly an opportunity to return growth to the maturing packaged media business. Is the format where it should be in terms of adoption? Is it on track for the mass market?
Bishop: Blu-ray is on track to reach mainstream status, and we are very pleased with the format’s overall performance and growth both from a software and a hardware perspective. News of the doubling of BD set-top players in first-quarter 2009 over Q1 2008 sales is a very encouraging sign. Even in this challenging economic climate, there was a nearly 100% growth in BD software sales during the second quarter of 2009 over the same period last year ([according to] DEG). We are continuing to see the percentage of a title’s overall sales increase on Blu-ray, with some key titles spiking at 15% or higher.
There's clearly a hunger in the market for high-definition content (particularly with the increasing HDTV penetration amongst U.S. households), and Blu-ray provides the absolute best in high-definition for the home. Out of the 40% of U.S. households that have an HDTV, more than 30% of those households are Blu-ray-enabled homes.
VB: What are your plans for continuing to promote Blu-ray to consumers? At the moment, ads mostly mention that titles are available in Blu-ray, but don’t elaborate. Will there be further promotions about the advantages of going Blu-ray in general?
Bishop: We are continuing to call out Blu-ray on all of our marketing efforts for new release titles, in print, TV and online ads. Additionally, we use innovative promotional efforts to showcase our new-to-Blu-ray catalog releases, emphasizing the significant improvement in picture and sound quality, as well as the unique interactivity such as BD Live and additional high-definition content.
Additionally, SPHE continues to develop promotions and retail displays to showcase Blu-ray, as well as furthering our online reach with e-mail blasts to our user base about Blu-ray.
Most important, of course, SPHE continues to develop new and exciting added-value content, with an emphasis on BD Live. Among our latest is what we believe will be BD Live’s “killer app,” MovieIQ. With a MovieIQ-enabled Blu-ray Disc and an Internet-connected Blu-ray player, movie fans can immediately access continuously updated information on cast and crew and explore relevant trivia such as production facts, music and soundtrack information all tied to scenes within the movie. These kinds of organic yet compelling features are what, we believe, will drive Blu-ray into the mainstream.
VB: Sony is in a unique position having resources in every part of the evolving home entertainment world, both in hardware as well as software. Will SPHE ramp up cross-divisional marketing in these areas?
Bishop: We continually work with our Sony sister companies to develop a unified message targeting both consumers and retailers. This includes creatingenticing Blu-ray propositions that combine the best in hardware and software, as well as creating educational messaging campaigns to drive home some of the key attributes of Blu-ray as a format.
For example, we are working on a BD Live piece with Sony Electronics that will show both the ease of connecting your Sony Blu-ray player to the Internet and accessing exclusive BD Live content with Sony Pictures Blu-ray titles.
Additionally, we have partnered with the Sony Rewards team to create the Sony Pictures Blu-ray Club, wherein users can register their Sony Blu-ray Discs via BD Live to earn points that they can then redeem for cool Sony products. We work closely with our hardware partners and always strive to collectively offer the best high-definition experience for our Sony customers.
VB: We understand that you recently began overseeing Sony Pictures’ downloading/streaming operations. How does that business fit with your packaged media business?
Bishop: While there are certainly key distinctions between digital distribution and physical media, there are also a number of similarities between both businesses. The transactional models, specifically electronic sell-through (e.g. iPod downloads) and VOD, are similar from a consumer standpoint to our traditional sell-through and rental business in that we are trying to drive consumers to buy and rent SPHE products. These transactional models behave similarly and need to be managed coherently, which is ultimately the rationale for our reorganization. We can now manage the business across all titles, optimize marketing across all formats and provide multiple delivery options for our consumers.
VB: How do you plan to maximize both physical and digital distribution? How might that be different from how you managed blockbusters from a couple of years ago?
Bishop: By utilizing both physical media and digital distribution, we’re able to offer a choice to the consumer. This choice allows them to enjoy their movie in pristine high-definition in the home, in standard-definition (for those who have yet to upgrade to high-def), or as a download for on-the-go viewing via their PC or favorite portable device. We also offer the option to purchase or rent in a variety of formats, rounding out the wide array of options we can provide today’s consumers.
In the past, we were more focused on the breakdown of how many DVD units were needed for sell-through and rental. But now, as the home entertainment spectrum has rapidly expanded, we must look at successfully fulfilling all methods of distribution. In order for the home entertainment industry to continue to grow, we must be smart and adapt to ever-changing consumer behaviors and the evolving landscape of physical and digital media.
http://www.videobusiness.com/article/CA6671823.html
