Packaged Media Will Coexist with Electronic Delivery, CDSA Told
Electronic delivery of entertainment will grow but needn’t be the death knell for packaged media, speakers said at Tuesday’s Content Delivery and Storage Association conference in New York. Compelling new features and flexible use models for content, along with consumers’ desire for physical ownership, will keep packaged media in the forefront while business models and DRM for electronic delivery evolve, they said.
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“Electronic delivery is growing but for most content companies prepackaged media is still the bulk of sales,” said Charles Van Horn, CDSA president. As an example of how electronic and physical media can coexist, he cited rock band Radiohead’s In Rainbows album. The CD version sold 1.75 million copies “mostly after the free release for downloading,” Van Horn said. A new “stimulus package” is coming for media companies on February 17, “when the DTV transition will spark demand for all things digital,” Van Horn said.
Blu-ray hardware already is in 28 percent of U.S. HDTV homes, said Michael Frey, president of replicator Sony DADC. Studio demand for 50-GB Blu-ray discs now is “significantly greater” than for BD-25s, he said. Sony produced its 50 millionth BD-50 earlier this year (CED March 11 p3). “A year ago, pundits said BD-50 couldn’t be made cost-effectively. Then, they said we couldn’t fill market demand for it,” Frey said. “Well, our cycle time is now as fast or faster than any DVD lines we have,” for making prerecorded discs, he said. “And although we're still capacity-constrained for BD- 50, we have been able to get all the product into the marketplace.” That was done partly by converting BD-25 lines to BD-50, and through accurate forecasting of title launch dates by studio customers, he said.
Frey forecast a healthy future for packaged media. Consumer studies found that 52 percent prefer to obtain home entertainment by physically buying it, while 29 percent prefer physical rentals and only one percent prefer downloading. New features like Blu-ray’s BD Live online interactivity will give consumers new reasons to buy, but bring a challenge, Frey said. The interactive experience must be kept “fresh” and process must be “seamless and fast” to make it worth consumers’ time, he said.
Flash memory maker SanDisk also remains bullish on packaged media. “Will physical media survive?” asked Daniel Schreiber, SanDisk senior vice president and general manager for audio-video. “Yes, and if it ends up not surviving it will be because of suicide, not homicide.”
There are a billion multimedia-capable cellphones with flash-card slots worldwide, “and that’s a ready-ecosystem for selling prepackaged media,” Schreiber said. This fall, SanDisk and partners began addressing that market with “slotMusic” -- albums on microSD flash cards (CED Oct 16 p6). The partners included all four major record labels, and retailers Best Buy and Walmart.
The MP3 albums on slotMusic list for $15, use high- quality 320-kbps compression and include liner notes and album art. In addition to playing in cellphones, SanDisk offers a dedicated portable player for $20. The slotMusic albums are sold in all Best Buy outlets and half of Walmart’s. Sales statistics are preliminary, Schreiber said. But slotMusic now accounts for six percent of sales for artist Rihanna’s Good Girl Gone Bad: Reloaded album, and 10 percent for Tim McGraw’s Greatest Hits 3.