helen davis jayalath, head of video...• most titles will be nr but there will be some catalogue...

Bringing 3D home: the role of Blu-ray DiscHelen Davis Jayalath, Head of VideoMedia-Tech AsiaMacau 14 March 2011Macau, 14 March 2011

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AgendaAgenda

• Why home 3D matters to the HE industry

• The role of Blu-ray 3D in bringing 3D to the home

• Current home 3D hardware and forecasts

• Release strategies for Blu-ray 3D

• Blu-ray 3D forecasts for US and Japan


Why does bringing 3D to the home matter so much to the industry?so much to the industry?

• Theatrical 3D is a key driver for BO revenues• On average 3D added around 21% to box office revenue per title in 2010

US box office receipts for 3D theatrical releases

On average 3D added around 21% to box office revenue per title in 2010• While Avatar remains stand-out, 8 further titles have generated >80% of revenues from 3D

• The objective is to replicate this additional revenue growth in the home

500

600

700

800US box office receipts for 3D theatrical releases

200

300

400

500

($m

)

0

100

200

Copyright © 2011 IHS Inc. All Rights Reserved.Note: US 3D slate from Dec 09 to Feb 11

Hollywood is now strongly supporting 3D meaning more content is on its way

• Live action’s share of 3D content is increasing• Most titles will be NR but there will be some catalogue conversions (eg Star Wars I Titanic)

meaning more content is on its way

50Theatrical 3D release schedule

10%

Live action 3D genres

Most titles will be NR, but there will be some catalogue conversions (eg. Star Wars I, Titanic)

40

es

24%

25%

10%

20

30

umbe

r of t

itle

18%4%

25%

0

10

N 3%1%8%7%

4%

Action Adventure Comedy


2005 2006 2007 2008 2009 2010 2011 2012 TBA

Animation Live action

Action Adventure ComedyDance Drama FamilyFantasy Horror Sci-fi

Note: Titles for 2011 and beyond based on confirmed slate

Why is Blu ray 3D (BD3D) important?Why is Blu-ray 3D (BD3D) important?

• Can deliver the best quality 3D experience to the home• Better than broadcast

• Outputs full HD 1080p to both left and right eyes

• Although displayed resolution also depends on the 3D TV technology (eg. passive TVs)

• Potentially, BD3D can help enhance consumer interest in Blu-ray Disc (BD)• Positions physical media at the cutting edge of new technology

Has a ‘wow’ factor arguably missing in HD• Has a wow factor arguably missing in HD


Home 3D hardware is already available to consumersto consumers

• Over 150 3D TV models and around 50 BD3D players launched worldwide so far

S ’ PS3 i Bl 3D bl• Sony’s PS3 is Blu-ray 3D capable• Universal 3D glasses also on the market

• But some issues still need to be addressed regarding current 3D TV technology• Communal viewing on active shutter TVs is limited

• Passive polarised 3D TVs display 3D to both eyes in a lower resolution


Most new branded BD players will be 3D compliant from 2011compliant from 2011

• By 2014, >40% of video hardware HHs will be 3D capable (Profile 5.0 or PS3/4)• Cost of BD3D player will be insignificant beside 3D TV cost for those keen to upgrade

Key markets: video hardware HHs

• Cost of BD3D player will be insignificant beside 3D TV cost for those keen to upgrade• PS3 will eventually be a Trojan horse for 3D as it is for BD

200

250

300

s (m

)

Key markets: video hardware HHs

100

150

200

quip

ped

HH

s

0

50

2006 2007 2008 2009 2010 2011 2012 2013 2014

Eq

/ / S / /


2D BD player/recorder 3D BD player/recorder PS3/4 DVD player/recorder only

Note: Key world markets = USA + W. Europe + Japan

But it will be 3DTVs and glasses that really drive take updrive take-up

• In a few years, 3D will be a standard feature on most mid-high end HDTVs• By 2014 29% of US TV HHs will have a 3D capable TV• By 2014, 29% of US TV HHs will have a 3D capable TV

• ‘BD3D enabled’ HH must have 3D TV connected to a BD3D player (or PS3/4) +3D glasses• 22% of US TV HHs will be BD3D enabled by 2014

30

35US 3D hardware penetration of TV HHs (%)

15

20

25

0

5

10


2005 2006 2007 2008 2009 2010 2011 2012 2013 20143D TV PS3/4 BD3D player BD3D enabled

Take-up will be slower in Japan and EuropeEurope

• 19% of TV HHs in Japan will have a 3D capable TV by 2014;14% will be BD3D enabled• BD3D player/recorders are already selling well with 27% of TV HHs expected to have one by 2014

• In Western Europe, 18% TV HHs will have a 3D TV in 2014; 11% will be BD3D enabled

30

Western Europe 3D hardware penetration of TV HHs (%)

30

Japan 3D hardware penetration of TV HHs (%)

15

20

25

15

20

25

0

5

10

2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

5

10

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

3D TV PS3/4BD3D player BD3D enabled

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

3D TV PS3/4BD3D player BD3D enabled

There is no BD3D bottleneck in authoring and replicationand replication

• The large authoring houses have been BD3D capable since at least April 2010A th i ti f BD3D l d hi ti f 2D BD• Authoring times for BD3D are already approaching times for 2D BD

• Many independents are also now able to author BD3D (most using Sonic software)• 3D adds estimated 25-30% premium on authoring time and thus costs

• Quality of input content, correct frame rates and resolution are vital to minimising costs

• At this early stage many are still learning but the step change is much smaller than DVD-to-B D

• 3D conversion from 2D is a longer process, quality conversion takes up to 6 months

• There are no differences between 2D BD and 3DBD replication (but BD50s are required)• As a result, we don’t expect BD3D to necessarily affect replicators’ market shares

• But larger replicators are offering 3D services across all stages of production

• BD3D is rapidly becoming an area of competitive advantage , especially for studio product


BD3D retail release slate ramped up last year despite a slow startyear despite a slow start

• In the US, 39 titles were available by mid Feb 201128 on retail shelves enough to fill a standard retail bay

Theatrical vs BD3D slate

• 28 on retail shelves - enough to fill a standard retail bay• Retail availability critical for home 3D adoption

BD3D titles at retail

10

15

es

Theatrical vs. BD3D slate

28%

BD3D titles at retail

5

ber o

f mov

ie

72%

0Num

b

Titles in storeTitles exclusively bundled


Theatrical Blu-rayNote: theatrical 3D slate includes all 3D releases to Sep 2010 (and thus eligible for BD release by Jan 2011; BD 3D slate includes all titles released to mid Feb 2011

Titles exclusively bundled

Note: BD3D slate includes all titles released to mid Feb 2011

2011 BD3D slate is off to a positive start2011 BD3D slate is off to a positive start

• 29 titles already confirmed for BD3D*release in the US this year*• Disney to release at least 15 titles in 2011 including Tron Legacy• Disney to release at least 15 titles in 2011, including Tron Legacy

• The majority will be NRs, but there will be some catalogue conversions• Disney’s Beauty and the Beast and The Lion King, plus 3x Harry Potter titles from Warner• Titanic and Star Wars: The Phantom Menace scheduled for theatrical 3D release in 2012

Confirmed 2011 BD3D releases*

Copyright © 2011 IHS Inc. All Rights Reserved. *For release between mid Feb 2011 and end 2011

0 2 4 6 8 10 12 14 16

BD3D release strategies: one or 2 SKUs?BD3D release strategies: one or 2 SKUs?

• US studios are so far adopting a dual SKU strategy• Allows for a premium price on the BD3D SKU• Allows for a premium price on the BD3D SKU

• Some indie distributors (eg. Image Ent/Big Pictures) are phasing out existing 2D BD SKUs• Ensures BD3D visibility on retail shelves• Builds up 3D content in 2D BD HHs

35US Pricing ($)

50Average NR BD prices by studio

15

20

25

30

20

30

40

S SR

P ($

)

0

5

10

15

0

10

20

US


DVD retail 2D BD retail BD3D retailBD3D 2D BD

3D will help reinvigorate interest in Blu rayBlu-ray

• IHS SD’s existing forecasts include 3D• 3D will help maintain BD’s premium position and price• 3D will help maintain BD s premium position and price

• Based on current title slate, US consumers will spend >$800m on buying BD3D in 2014• 14% of BD spending or almost 10% of all physical video spending

10

12Consumer spending on retail video: USA

6

8

10

($bn

)

0

2

4


02009 2010 2011 2012 2013 2014

DVD retail 2D BD retail BD3D retail Digital retail (EST)

It has the potential to take off slightly faster in Japanin Japan

• Based on current title slate, Japanese consumers will spend $300m on buying BD3D in 2014• 18% of BD spending or 11% of all physical video spending• 18% of BD spending or 11% of all physical video spending

• BD3D will also fit into current BD rental models

4Consumer spending on retail video: Japan

2

3

($bn

)

0

1

(


02009 2010 2011 2012 2013 2014DVD retail 2D BD retail BD3D retail Digital retail (EST)

BD3D set to generate $1.5bn in consumer spending in key world markets by 2014spending in key world markets by 2014

• 14% of BD spending or 7% of all physical video spending• If take up is more enthusiastic than expected it could generate additional incremental• If take-up is more enthusiastic than expected it could generate additional, incremental

revenues

25

30Consumer spending on retail video: Key world markets

15

20

25

($bn

)

0

5

10

(


02009 2010 2011 2012 2013 2014

DVD retail 2D BD retail BD3D retail Digital retail (EST)

BD3D is an exciting technology with the potential to reinvigorate the BD categorypotential to reinvigorate the BD category

• The technology must be marketed and promoted clearly & comprehensively

to generate awareness and understanding• In-store demos by knowledgeable staff are vital

• As is working demo equipment!• As is working demo equipment!

• In some markets (eg, UK), broadcasters effectively captured the HD market,

leaving BD out in the cold• The industry must ensure that this does not happen again

• BD3D has real ‘wow factor’ – the home entertainment industry must work

together to translate that into genuine consumer enthusiasm!together to translate that into genuine consumer enthusiasm!


Thank youThank you

helen davis@screendigest [email protected]

helen davis jayalath, head of video...• most titles will be nr but there will be some catalogue...

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