We went out to find out how both the driving forces behind UltraViolet and the end users view the progress. A market strength and something absolutely unique to UltraViolet is its relationship with the customer at the retail level. While some consumers have no trouble deciding that UltraViolet is a service that will cover many of their viewing needs, acceptance by consumers at large has been a little more mixed.

Here is a small selection of what we uncovered in our research:

• “No one but the Hollywood studios like the implementation. When you upload your movies to UltraViolet, they are no longer yours. You merely have the privilege to access them for however long they decide to keep the content and license servers running. And what do you have if this goes away? Nothing.”

• “Put a film in the cloud like this for $2 and it'll theoretically be there for you long after your kids are grown and you’re retired. That's not a feature you got when you originally bought the DVD/Blu-ray Discs. I like to think of this as the digital equivalent of buying an extended lifetime warranty.”

• “I just can't see driving to Walmart, walking a quarter mile across the parking lot and standing in line at a kiosk to get digital media for my device. That's too much old-school style shopping inconvenience for digital media.”

• “As for the convenience, considering that Walmart is the world's biggest retailer, most people go there once in a while anyway. The only inconvenience is remembering to bring the DVDs with you when you’re there to shop.”

The full feature will appear online and in the June issue of D2D.

“There is nothing comparable to the experience of a live show. However, few artists issue live recordings and when they do, it’s generally many months after the concert has taken place,” said Ian Murray, President of Migratory Music and inventor of the Ovation Tower platform. “As a music fan and frequent attendee of live events, I found even the best concert experiences broken. With technology a passion of mine, I set out to develop a platform which would broaden the live experience for music fans and provide benefits to artists and multiple facets of the music industry.”

An e-commerce solution for rights holders and a new platform for the live fan, the Ovation Tower is a product of Migratory Music that enables the on-site digital distribution of live concert performances immediately following the performance and the artists’ digital music catalog. With a touch-screen user interface and typical transaction time of less than a minute in most cases, consumers have the option to download the live content to their portable device via the dock or USB connectivity on the Tower console in addition to receiving a secure link via email to download their purchase at home. The Ovation Tower completed beta testing at The Greek Theatre in Los Angeles and City National Grove of Anaheim during 2011 and has 15 kiosks installed for its second season at The Greek, which began earlier this month.

“We are pleased with our partnership with Migratory Music and thrilled to enhance the experience for concert goers at The Greek Theatre in Los Angeles” said Rena Wasserman, VP of Operations for Nederlander Concerts and GM of The Greek Theatre in Los Angeles. “The Greek was the first venue to partner with Migratory Music and install the Ovation Towers last year. Since then, we have installed the Towers at City National Grove of Anaheim, another Nederlander Concerts venue. Being able to offer concert goers a live recording immediately following concerts is a great amenity, plus the visual impact that the Towers present at the venues complements the overall experience.”

In addition to the attendee being able to order their live album anytime throughout the show, the Ovation Towers offer a hand-selected digital catalog tailored to the genre of each show with content from all the majors and many independent labels through its music licensing deal with MediaNet. The Ovation Tower has digital distribution rights to sell the artists’ full digital catalog, as well as the capability to offer promotional tracks in support of new artists, photos, videos, eBooks, sponsor ads, deals and other exclusive content. Ovation live albums are available for under $20, while digital catalog albums are sold for under $15.

www.migratorymusic.com

Rob Seidel, Executive Vice President of Deluxe Digital Studios, highlighted the features of Veristream. “Using sophisticated algorithms, Veristream analyzes source video masters and encoded streams identifying potential corruption or processing issues that could have been introduced throughout the video production process. In doing so, Veristream predicts potential video anomalies in a highly accurate, fast, and reliable way providing efficient ways for operators to review and verify potential issues. The efficiency enabled by this automation is a major step forward in quality assurance testing and we are unveiling this service with Testronic Labs because they bring an unparalleled depth of knowledge and testing experience.”

While the human element can never be discounted in the testing field, automation tools are the next important development area for quality assurance. The ability to move large files through a pipeline with automated pre-qualification is increasingly crucial to a viable workflow. Part of the appeal for Hallen is the ability of Veristream to analyze almost any picture element. “When we work on a title that may have as many as 26 versions and numerous encodes, there are literally thousands of files to test on a single project. Testronic is dedicated to the innovation and investment that is necessary to lead the testing industry forward into these new digital areas. We have engaged in a number of beta trials with Deluxe on these tools and will continue to provide them with usability data to enhance refinement of the software.”

Hallen concluded, “While various types of automation tools have been available for a number of years, Veristream incorporates a fresh approach to creating powerful efficiencies for the rapidly evolving needs of our supply chain. It’s exciting and an honor to be involved with Deluxe Digital Studios on this initiative.”

www.bydeluxe.com
www.testroniclabs.com

Since the initial awards banquet on May 16, 1929, in the Hollywood Roosevelt Hotel’s Blossom Room, 2,809 statuettes have been presented. The statuettes, known as Oscars, represent a knight holding a crusader’s sword and standing on a reel of film. The film reel features five spokes, signifying the five original branches of the Academy (actors, directors, producers, technicians and writers).

According to the US Census Bureau, when the first Oscars were awarded in 1929, Americans spent $720 million that year going to the movies. Now, motion picture theaters generate more than $13 billion in revenue annually.

In addition to May marking the Academy Awards, many of the movie stars honored with Oscars through the years were born in May, among them Katherine Hepburn and John Wayne, along with Gary Cooper, Henry Fonda and Jimmy Stewart.

www.census.gov

The screening celebrates the recent launch of the Casablanca 70th Anniversary Three-disc Blu-ray + DVD Combo Edition from Warner Home Video. The limited and numbered gift set edition will introduce two never-before-seen documentaries – Casablanca: An Unlikely Classic, and Michael Curtiz: The Greatest Director You Never Heard Of. The new documentaries will complete more than 14 hours of bonus material that also includes a compilation of three comprehensive feature length documentaries.

This special screening event also celebrates ‘Inside the Script’, a new digital publishing initiative that gives movie fans an innovative new way to go deep inside films. Inside the Script is a series of highly illustrated e-books that contain the film's actual shooting script, rare materials from the Warner Bros Corporate Archive and more, and are currently available via iBookstore, Kindle and NOOK by Barnes & Noble.

www.facebook.com/CasablancaTheMovie

Consumers are watching more video than they have in the past, across a variety of platforms. One-third of U.S. adults online (34%) say they watch more video content today than they did a year ago. Viewing of television video programming is up 28%, with consumers citing convenience and the appeal/variety of programming as the top factors for increased viewing. Viewing of content on portable devices has also increased, with 40% watching more on those devices today than a year ago.

Many consumers (66%) who are watching video content on television are simultaneously using other consumer electronics (CE) devices. This behaviour is more prevalent among younger consumers, as 85% of 18- to 24-year-olds and 70% of 25- to 34-year-olds multitask with another device while watching video on a television. US adults online report watching some type of video content an average of 3.2 hours a day, five days per week.

Televisions continue to be the most commonly used device for watching video but other devices are gaining in popularity. HDTVs are the most prevalent devices used for video viewing, used by two-thirds (66%) of U.S. adults online. Computers are also commonly used to watch video, with 62% using a laptop to watch video and 55% using a desktop. One-third (33%) of consumers are using their smartphones to watch video content, and 17% are using their tablets.

Televisions have also emerged as a device that can do more than just play video. Among consumers using televisions to watch video content, nearly half (47%) also use their sets for other purposes. One in three (34%) consumers who use a television to watch video also use their set to listen to music, and one in five (21%) uses a television to listen to audio. Usage also varies by age and the type of display owned.

Younger consumers, those under age 25, rely on their TVs more for music, social media, going on the web and communicating. Consumers with internet-enabled TVs use their displays in a number of ways as well: 47% listen to music, 28% use social media, 26% surf the web and 23% view photos. “Younger consumers accustomed to multi-tasking are defining new video behaviours as they watch video content across multiple platforms, on their own schedule, all while interacting socially on their devices with their friends,” said DuBravac.

Future television purchases will be based on better picture quality and larger screen sizes as consumers will continue to seek the latest innovations in the market. Almost half (48%) of consumers planning to purchase a TV in the next 12 months will be replacing an ageing, obsolete or broken set. However, half (51%) desire improved picture quality in a new display and half (50%) want a larger screen size. One in four (24%) consumers with intentions to purchase a TV over the next year expect to purchase a 3DTV; 21% plan to purchase an OLED display; and a quarter of consumers (25%) plan to purchase an Internet-enabled TV. While stated purchase intentions do not always translate to transactions, the study clearly shows many consumers have their eyes fixed on newer TV technologies.

“Easy access to the Web makes TVs more versatile, allowing us to stay connected, informed and entertained,” said DuBravac. “In the future, new technologies, like OLED and 3D, will continue to improve the viewer experience, and internet-enabled sets will fulfil consumers’ desires to be connected.”

www.CE.org

“The movement from dedicated e-readers to multi-function tablet devices is an important one for publishers to understand, as it allows them to deliver a richer, more interactive e-book experience,” said Angela Bole, BISG’s Deputy Executive Director. “One of the strengths of this study is that it can plot such evolution, preparing publishers for what e-book readers want and expect from them next.”

It seems the iPad may be starting to lose its firm hold on the tablet market, at least in this sector, as the increase in tablet preference was not primarily for Apple’s iPad (which rose by just over !%), but for non-Apple tablets – overwhelmingly from Amazon and Barnes & Noble. These non-Apple devices increased from 5% to 14% over the same period. The study also points to a buoyant book market. Nearly 30% of respondents in the February 2012 survey reported an increase in dollars spent on books in all formats since they began acquiring e-books, while nearly 50% reported an overall increase in the volume of titles purchased in any format.

The numbers are even rosier for the e-book market: more than 62% of respondents reported an increase in dollars spent on e-books, and more than 72% said they have increased the volume of e-titles they are buying. Some publishers are reporting that even when overall revenue has declined, profitability – particularly for e-books – has increased.

www.bisg.org

“As Digital Cinema extends its reach, managing the list of trusted devices is becoming more complex and labor intensive. Automating the process of collecting, validating and securely distributing this information is a critical need that must be addressed,” said Steve Weinstein, president and chief executive officer of MovieLabs. “We are looking for innovative service providers interested in playing a central role in D-Cinema.”

The project aims to develop a worldwide high availability Trusted Device List Registry for D-Cinema that is voluntary and open to all in a non-discriminatory manner. The TDL Registry is designed to receive information from exhibitors and to interoperate with regional registries, deployment entities, and system integrators. The TDL will contain all information necessary for service providers and other ecosystem members to generate Key Delivery Messages (KDMs) to enable the exhibition of Digital Cinema Packages (DCP).

www.movielabs.com

In March of this year EDC also received accreditation from SEDEX which strives to drive improvements in responsible and ethical practices in global supply chains.

CEO John Fitzgerald said: “EDC aims to deliver the highest possible standards across every aspect of its business. To be recognized and accredited by respected industry bodies such as CDSA and SEDEX underlines our commitment to providing our customers with the highest possible standards of service.”

EDC joins more than 100 media creation, manufacturing and distribution facilities worldwide which participate in CDSA’s anti-piracy programs which are supported and endorsed by the intellectual property community.

www.edc-gmbh.com

Mark Stanborough, Senior Film Services Co-ordinator at ITV Studios Global Entertainment commented: “With royal nostalgia at a high, ITV Studios Global Entertainment wanted to restore A Queen is Crowned to the best possible standard. JCA previously restored Sharpe’s Rifles [D2D will be providing a detailed account of JCA’s Sharpe restoration online and in the June issue of the magazine ] and Poirot for us, so we knew the team could handle the challenge of bringing the documentary digitally up-to-date. Their attention to detail and grading expertise is going to give viewers around the world the opportunity to watch this historic event in a quality previously unseen.”

ITV Studios Global Entertainment commissioned JCA to digitally restore from available film elements. The negatives were scanned to super 2K resolution and then fully restored and graded to create a high definition master.

Matt Bowman, Commercial Director at JCA, added: “We are receiving an ever-increasing number of digital restoration commissions. From classic shows to historic documentaries filmed decades ago, broadcasters, distributors and producers are keen to maximize the assets they already possess. In this instance, bringing a British documentary about the Queen to life means that ITV Studios Global Entertainment will be able to offer international broadcasters this unique footage for their Diamond Jubilee celebrations in June.”

A Queen is Crowned, which is the only feature-length Technicolor record of the coronation, will be available on Blu-ray in 2012.

www.jca.tv

Technicolor had requested, the day before the announcement, that trading in its shares be suspended ahead of the imminent Board of Directors meeting, where the Board would “review a proposal received from an international institution to invest and take a minority stake in Technicolor to support its strategy and its Amplify 2015 roadmap”.

Frederic Rose, Technicolor CEO,said: “I am delighted that JPMorgan plans to make a substantial investment in Technicolor to become a long-term shareholder in the Company. The capital increase we are planning will provide the Company with a stronger financial structure and a stable shareholder base to implement its growth strategy. The planned investment is a strong evidence of confidence in Technicolor and an endorsement of our strategy and growth potential.”

www.technicolor.com

Warner’s Potter-driven awards were Marketing Initiative of the Year (Box Office over £10 million category), Retail Title of the Year (Film), and Best British Title of the Year (Film) as voted by HMV’s online users. HMV online visitors also voted BBC Worldwide’s Frozen Planet – The Complete Series Best British Title of the Year (Non-film).

Lavinia Carey, Director General of the BVA (pictured left, with Miles Jupp, right, and David Cooke, Director, BBFC), said, “The judges found a phenomenally high quality of entries this year and the difference between winners and highly-commended was wafer thin. This is a reminder of the importance attached to the video sector, without which much of our favourite content would never get made or reach such wide audiences, whether on dedicated players, connected devices or standard television screens and that so much of its success comes down to British talent and ingenuity.”

This year the ‘Marketing Initiative of the Year’ for Film award was divided into four categories, according to box office takings. The winners were: Revolver Entertainment won two of them, for Fire in Babylon (up to £1 million Box Office) and Anuvahood (up to £1 to £3 million Box Office category), in what was an especially good night for them too, as Revolver’s latter campaign also scooped Creative Initiative of the Year. Universal Pictures (UK) won with Senna in the £3 to £10 million Box Office category, with Warner Home Video taking the prize in the £10 million+ Box Office category for Harry Potter and the Deathly Hallows Part 2.

British stars and marketing excellence were also recognized through Distributor Marketing Awards for George Harrison – Living in The Material World from Lionsgate Home Entertainment, Sarah Millican – Chatterbox Live from Channel 4 DVD, Arrow Films’ The Killing – Complete Series One, Universal Pictures’ Barbie Princess Charmschool, 20th Century Fox’s Star Wars: The Complete Saga and Sony Pictures’ Moviextras campaign.

Tesco was rewarded for its ‘Get the Physical, Get the Digital’ initiative, promoting its new service which allows Tesco Clubcard customers to automatically get a digital copy of any title credited to their Blinkbox account so they can view it seamlessly on connected devices as soon as they buy the physical copy in-store or online, while HMV picked up the Bricks and Mortar Retailer of the Year for the third year running. 

In the online environment, Amazon, iTunes and LOVEFiLM were all successful, winning 2012 Online Retailer, Online Digital Service and Rental Service of the Year respectively. The BVA award for Supplier/Agency of the Year went to marketMe and this year’s Best British Authored Disc was won by StudioCanal’s Submarine authored by Dubbs|Eyeframe.

“We were delighted to present the BBFC [British Board of Film Classification] with a BVA Special Award to mark their achievements in adapting to industry’s needs over the video industry’s relatively short life in this their centenary year,” said Carey. “And our copyright awareness campaign, ‘Moments Worth Paying For’ run by the Industry Trust for IP Awareness, deservedly won Industry Initiative of the Year as another British success story in cross-sector collaboration for the benefit of the entire audiovisual industry.”  

The Awards were sponsored by 20th Century Fox Home Entertainment, AGI-Shorewood, Apollo Cinemas, Arrow Films, Bezier, CTBF, Delga Print, Dubbs|Eyeframe, DVD Intelligence, EDC, Freeform.London, Handle, HMV, IHS Screen Digest, ITV Studios Home Entertainment, Kantar Worldpanel, Lumacoustics, Koch Media, MPO, Momentum Pictures, Official Charts Company, Paramount Home Entertainment, Pictureblast, Rovi, Sony Pictures Home Entertainment, Universal Pictures (UK) Ltd, VDC, The Walt Disney Company and Warner Home Video.

www.bva.org.uk

This is the BBC’s first public launch of a companion screen experience, after closed trials conducted around Secret Fortune and Frozen Planet, with the Corporation’s stated strategy for companion apps being to: “build on existing audience needs and behaviour, go beyond broadcast, and drive creative renewal and innovation”.

Jaye added, “We’re also taking viewers on a journey beyond where the broadcast program can go, providing in-depth content about the stories and the history behind featured antiques in the program, drawn from across BBC Online and other trusted sources. It’s a great example of how we can creatively renew our audiences’ enjoyment of watching a much cherished BBC program.”

The companion experience is designed to work alongside both live broadcast and on-demand viewing and offers the audience the opportunity to play at expert or amateur level and choose from four value ranges for each antique item featured on the show. Audiences make their valuation against the clock, before the answer is revealed on the TV. Viewers using the app on their PC, tablet or mobile can see what others playing along are estimating with a ‘Ask the Nation’ function.

At the end of each episode, audiences receive their final score, and find out how they ranked compared to the others taking part in the experience. The app also invites audiences to explore featured antiques in the program and the stories behind them.

Simon Shaw, Executive Producer, Antiques Roadshow, said: “We’re delighted to welcome the companion screen experience to The Antiques Roadshow. Our viewers love the rich mix of stories, surprise and learning from our team of experts. Now they’ll be able to really test their skills at playing the valuation guessing game and seeing how well they do against the rest of the nation.”

www.bbc.co.uk

The study also reveals that proprietary operating systems will remain the main type used by manufacturers in the next five years, though Android OS will start gaining presence and is expected to reach a significant share of the market by 2014. IMS Research’s forecast shows that during 2016, more than 80% of the connected TV sets shipped worldwide will have built-in Wi-Fi and close to 30% will have advanced user interface features such as motion, gesture or voice.

“Connected TV sets will help boost sales of flat panel TVs as the awareness and the demand for Smart TV features increases,” Thayer added. “However, the impact that internet-connectivity will have on total TV set growth will be diminished by the availability of other internet-connected devices such as Apple TV, Roku and game consoles.”

TV set manufacturers’ product launch plans are expected to drive the majority of the growth for connected TV sets during the forecast period, she concluded.

www.imsresearch.com

Anthony Zuiker (pictured left with Michael Kassan, Chairman/CEO of MediaLink), creator of the CSI franchise and the new BlackBoxTV channels on YouTube keynoted at the summit, which took place against a backdrop of recent change in the landscape of digital-delivery mechanisms that utilize the internet and other OTT topologies, and highlighted the myriad new opportunities that exist for content creators.

As several panellists freely recognized, developments such as YouTube’s new hyper-channels offer new delivery opportunities for producers and storytellers attempting to reach new audiences. “There are hundreds of hours of content available,” stated Drew Buckley, COO of Electus, a content studio that this summer is planning to launch three YouTube channels. “But you need to be very efficient. While YouTube is the most powerful channel for new media,” he advised, “it is not based on discovery. So you need aggressive marketing” to reach target audiences for these emergent hyper-channels.

“The one advantage for YouTube,” conceded Mark Terbeek, a partner at MK Capital, a leading venture fund with a strong sector focus on digital media, “is that straight out of the gate it’s a global platform” with extended reach into the consumer space. MK Capital’s portfolio includes Movieclips and the popular gaming site Machinima; in March the firm announced a major investment in the app-driven DramaFever, an Asian portal whose programs are subtitled in English. “Machinima has 1.5 billion hits a month,” Terbeek offered. “That is a major advance from the 20 million we got when we started four years ago.”

Regarding the type of digital content that these new Internet-enabled channels should carry, “Start with content that people want to see,” advised Ben Wolin, CEO with Everyday Health, a YouTube-hosted partner. “And then actively promote the channel through social media and use the authority of your platform to bring [visitors] to YouTube.”

As Zuiker stressed during his Keynote Conversation with Michael Kassan, chairman/CEO of MediaLink: “The win was in the doing.” Citing the example of Cybergeddon, a new production that will premier on BlackBoxTV as nine, 10-minute weekly episodes, “With less cooks in the kitchen we are able to achieve better results, more productivity and maintain tighter budgets.”

The filmed production about the growing threat of cyber crime begins in May and will be unveiled in September, Zuiker revealed, “with interactive splash screens and interstitials. We also plan to react to feedback from social-media participants. While the plot will be locked, we will use up-to-the-minute metadata to connect with our audience.” Norton by Symantec will offer technical advice on security issues.

“Once you have control of the traffic, you have an apparatus for promotion that far outweighs billboards on Sunset,” Zuiker stated, referring to high-visibility schemes to promote Hollywood blockbusters. “The future is multi-platform digital – it offers more artistic control, more ownership and reduced red tape!”

In terms of monetizing available delivery mechanisms for digital programming, including mobile, over-the-top and over-the-air, Aubrey Freeborn, SVP of marketing & product management for worldwide VOD/EST at Twentieth Century Fox, offered that “video-on-demand has proven itself” as a $2 billion per year revenue stream. “We are firm fans of those transactional models. New demographics are emerging, with 25- to 44-year-old females reacting to new content in increasing numbers, focusing on family-friendly titles.” After all, as Freeborn stressed, in many homes, “Mom is in charge of the remote!”

“You need to go where your customers are,” stated John Sykes, President of Clear Channel Entertainment Enterprises, which uses its 850 radio stations as a single collective brand to help market its clients’ new TV shows, movies and concert tours. “Our iHeart Radio Music festival in Las Vegas last year,” Sykes offered, “created 50 million subscriber hits – that’s a great way to build a digital channel.”

“On-line channels offer accountability,” considered Debbie Menin, Category Lead, entertainment & travel at Yahoo, which is marketing engagement access to a catalog of new digital channels. “After all, over-the-air broadcast offers enhanced scale. We need to offer new demographics for Madison Avenue about advertising opportunities. Digital networks can make a viable statement about monetization.”

Gale Anne Hurd, executive producer of The Walking Dead, related that this popular AMC cable show uses the internet and social networking to actively promote each episode, “with nine million hits from last season’s finale, in addition to eight million followers on Facebook. We also develop webisodes with unique elements that do not appear on the show. AMC also offers a live after show, entitled The Talking Dead, which offers second-screen opportunities for fans. We also produce multiple EPKs [electronic press kits] for the show – more than we do for our motion pictures - with a crew on set every day to get material for the websites. For the next season we plan to maintain those audiences with more on-line content and complementary digital activity to secure major social-media hits.”

As Dan Cryan, Research Director of digital media at IHS Screen Digest, revealed: “Although home entertainment revenue is falling, we expect that digital media rentals and digital subscription movies via the cloud will stabilize that decline over the next four years. By 2014 we predict that, in terms of viewing time, more of the US audience will be watch on-line than will watch physical discs.”

www.variety.com/events/2012/entertainment-and-technology-summit-spring-2012

Photo credit: Mel Lambert. Lambert has been intimately involved with the international media production and delivery industries for many years. Currently, principal of Content-Creators.com, a Los Angeles-based research and editorial service, he can be reached at mel.lambert@content-creators.com; +1.818.558-3924.

Every conference has its rock star moment, and this year’s PEVE was no exception. Danny Kaye, keynote speaker on the first day, took to the stage to the rousing strains of Led Zeppelin’s Whole Lotta Love, which brought goofy smiles to just about everyone (at least everyone of a certain age) in the audience. Kaye, the EVP Global Research & Technology Strategy, Twentieth Century Fox, showed a video clip of some of Hollywood’s latest and greatest movie moments and declared, “It’s this kind of content that compels consumers to buy.”

There was a serious message to Kaye’s presentation: the vast and rapid changes of the video delivery landscape and the need for the industry to ensure that the consumer is not left confused. “There is a consumer perception that technology is moving too fast,” he said, “That’s our fault, and we have to do a better job of framing what the changes are.” Kaye presented a number of slides and statistics to highlight the changes, and how the content community should keep up.

In a ‘Then and Now’ video viewing slide (“I have to update this regularly”), Netflix subscribers went from 2.4 million to 24.4 million between 2004 and 2011; in the same time period YouTube went from nothing to 5 billion views per day globally, Facebook went from 1 million to 800 million users, and Twitter went from nothing to over 200 million registered users globally. The technology has moved no less rapidly, including tablets going from nothing to over 55 million users globally, Blu-ray players coming out of nowhere to being in over 34 million households, smartphones at nearly 100 million global owners, and HDTVs now in 80 million households from 5 million in 2004.

“At Fox we do a ton of consumer research,” he said. “We don’t always like what we hear but we have to listen and adjust our business models accordingly.”

There was good news: overall home entertainment spending was up in Q4 last year from the first time in a while and Kaye expected it to be up in Q1 of this year as well. “That goes for physical too, not just overall,” he pointed out, “and the Blu-ray format has been a success, despite what pundits say. Blu-ray growth shows that consumers are convinced that this is the format and they can start to convert their DVDs.”

One clear message, he added, is: “When you add in alternative ways of viewing home entertainment, it is very consistent over time. Once the economic crisis is over we can rebuild sell-through.” Ownership has its advantages, which include more content and more rights; however, Kaye added, and even by 2015 digital sell-through will account for only 12% of video, though the story is very different for games, music, and books, which will all see digital take over 50% of sell-through.

Still, Kaye concluded, “The ultimate goal is to make all aspects of the digital experience work as well as a DVD,” which means offering quality, collectibility, safety of ownership, and the ability to watch content again and again. “What we have done in physical we should do in digital; second screen, 3D, more digital rights... that’s what consumers want and we need to offer that.”

That provided a smooth segue into UltraViolet and Project Phenix, both initiatives that, said Kaye, the studio community will be working on to enable digital to work. (After his presentation Kaye was asked by conference chairman Ben Keen of IHS Screen Digest if there would be UV-enabled Fox content this year. “As soon as we think it works as it should,” Kaye replied, but Fox considers it still to be a work in progress, albeit a serious one.)

Overall, Kaye concluded, “The future is very bright.”

VIEWING INFIDELITY

Another rock star moment was Richard Bullwinkle of Rovi, who captured the audience’s imagination when he introduced, among other topics, the notion of viewing (in)fidelity and told his own story, along these lines: “My wife is a big Mad Men fan. I don’t like it that much, but I love sitting next to my wife, so I watch it with her. I got a call at 4am today (thanks, honey, remember the time zone next time) to say Mad Men was about to start and she was thinking of watching it. Well, no way! That’s like cheating. We watch it together, she can’t watch it without me, even thought I don’t really like the program.”

It turns out that 88% of people think it is cheating to watch “couple’s content” without their partner. Bullwinkle’s overall presentation dealt with the Rovi consumer research into viewing habits; highlights included the fact that the proliferation of personal devices in the home creates a complex position of managing devices and there are certain expectations – 96% of people think that the evolution of the television set means not improvement but bringing the ‘bad’ of computers to TVs.

A staggering 92% of people surveyed have devices in their home with unrealized potential because they can’t figure out how to make them work. The future is here, Bullwinkle announced, showing a slide with the aforementioned proliferation of viewing devices. “Just bring the digital duct tape.”

People have split personas – 97% manage three types of content across all devices, he stated, content they watch alone, content they watch with a spouse or child, and content the whole family watches. Time-shifting threw out some interesting facts: for instance, 41% of people own a DVR but 81% still watch TV ‘live’. Catch up TV means that 72% of people have picked up a series new to them. People also select content based on the time available: on weekdays people will bypass a movie to watch a 30-minute episode of something – but then they will end up watching two or three more episodes, or about the same amount of time as a movie.

“Sport is king,” Bullwinkle declared. “There is very little content which will attract three generations around a TV but with sport you can do just that. About 91% of people organize their viewing time around sporting events.” Other interesting facts: people still experience “DVR guilt” when they can’t watch everything they’ve recorded but can’t bring themselves to delete anything; they are also reluctant to navigate through VOD; even if content is free they are concerned about getting charged.

Content is many things, Bullwinkle concluded, and it is dependent on the split persona: what people want to watch depends on where they are, who they are with and what they are watching on. Content is an event, like the sports example, where people plan, invite others and watch together (though this viewing model is less frequent). It is an escape: “What you are watching is not as important as just relaxing and not having to think.” It is a commodity (“There is throwaway content that people watch right now for half an hour or so.”)

Size is everything: “Some things will never be shared on a big screen. The bigger the screen the less personal informations shared – 95% of teenagers said they would not feel comfortable with using Facebook on TV.”

Where content is enjoyed says a lot about intent, Bullwinkle concluded: “The living room is to share content, while the bedroom is for private ‘me time’ content watching. The kitchen is for multi-tasking and watching while you accomplish other tasks, making the TV effectively a radio.”

KEEPING CONSUMERS HAPPY

The show had officially opened with Keen taking the audience on a little time travel tour of the past 20 years in terms of the world at large, PEVE, and the video home entertainment industry, all of which highlighted the appropriateness of this year’s PEVE theme: ‘Solid business advice for a complicated future’.

After thanking the sponsors (Sony DADC, DEG Europe, AGI Shorewood, MPO, KIT Digital, Rovi, Dubbs/Eyeframe, and Akamai), Keen introduced the first of two consumer panels. “These have been a highlight of the conferences,” he said, “and IHS Screen Digest can take credit for pioneering the approach of putting the consumer up front. The panels have been such an important part that they have now been brought to the beginning of each day.”

The two consumer panels were indeed highlights of the event; both were moderated by Jason Kramer of Vital Findings and Nicola Pearcey of the DEGE, both of them approached home entertainment from slightly different perspectives, and both of them provoked about the liveliest discussions of all the sessions. Oh, yes, and at some point both tackled the issue of UltraViolet.

Day one’s panel was about how people engage with entertainment both in and out of the home, and how technology developments are impacting how consumers consume content. The panel all had different ways of watching video: streaming, renting and then buying, the cinema and then disc, and all agreed that it could sometimes depend on cost and where they were. When Pearcey asked if anyone had heard of digital copy, the responses were varied but, surprisingly, given the range of viewing habits, only two people thought they knew what it was: “I think I know what it is and downloaded it once but it is still sitting on my iPod,” said one panellist, “but I prefer to rent the disc. I still need to see something physical; if I can’t see it, it doesn’t exist.”

When the concept was explained more fully, many of the other panellists conceded that they may have bought discs with a digital copy but would have assumed the paper with the code on it was just an insert and would have thrown it out.

What did seem apparent was that most people still bought discs at some point and when Kramer queried, “What would you think about having a digital copy of the disc’s content when you buy it,” the general consensus was that it would be a good idea but not if it was just on a “random bit of paper”. The concept of double and triple play was also a new one and again, when it was explained, panellists were cautiously in favour of it though, as one said, “I don’t see the point of two discs but a digital copy, yes, that sounds good.”

Blu-ray took a bit of a beating: only one panellist had a Blu-ray player; another said that DVD quality was good enough for him, while a third said that she thought the discs were too expensive. DVDs were cheap enough to still be desirable as an impulse buy, though newer releases on disc were also considered good for gifting.

UltraViolet also took a slight pounding when it was first brought up, as only one person had “sort of” heard of it. Most panellists were uncertain about the cloud, and those who knew anything about it assumed it was an “Apple thing”. When it was described in more detail to them and Kramer asked what it would take to get them to use it, price was an important consideration and few thought they should be expected to pay a premium for UV-enabled disc.

Surprisingly, after all that, when asked, “In three years how will you be watching video at home?” virtually everyone thought they would be watching at least some content on discs. In a foreshadowing of Danny Kaye’s remarks later that day, one panellist remarked, “Probably something that’s not out there yet. The industry moves so fast it’s really hard to keep up. Blu-ray is all very well but devices are out of date so soon. Eventually you have to live with the idea that you have to cap it and can’t always have the latest technology.” But people will still have discs, he agreed.

The second consumer panel took a slightly different tack, examining people’s view of the value of different types of home entertainment, and how much they are prepared to pay for various options. While all but two people had bought DVDs in the previous six months, there appeared to be a disconnect when it came to what the discs were worth, with a few panellists perceiving them to be priced at £12-£15 and hence “not value for money”. If they were priced at about £8, everyone agreed that was good value and they would probably buy more DVDs. When it came to Blu-ray, the perception was that discs cost around £20 but that they would be good value at slightly less.

Three people on the panel had heard about digital copy, and two of them used it. “It would be useful,” a non-user said, “like getting a free download when you buy a vinyl album.” Again, there was a little confusion about digital copies as opposed to the cloud, with any awareness of the cloud being largely limited to the Apple aspect of it. Interestingly, even those who didn’t really buy many discs thought that it was a safer option for ensuring the security and longevity of content. The cloud would be all very well as a backup, but overall discs came off better: “online you can drown in choice”, “you take better care of discs”’ and “you feel more committed to physical especially if it’s something you really love” were among the comments.

And summing it all up was a comment eerily like that in the earlier panel: “Technology needs to improve to the level where we can understand it. Things should be improved rather than just changed.”

HOME FIRES BURNING

Another trademark feature of the PEVE conferences is the ‘fireside chats’ where IHS Screen Digest analysts sit in comfy armchairs and chat cosily to key industry executives. There can be an edge to some of the cosy chats, however, as Richard Cooper of IHS Screen Digest proved with an early question put to Chris Reiser of Sony DADC. “When the London facility was burned down in the riots, that provided a great opportunity to wash your hands of physical media and walk away with a huge insurance payment,” Cooper pointed out. “Why didn’t you?”

First of all, Reiser said, while not an event to be wished for, it was concrete evidence of how good the company’s disaster recovery plan was. “It also showed the industry standing together,” he said, referencing the fact that companies normally competitors, such as Cinram, helped to get Sony DADC’s distribution back on track almost immediately. “Nowadays we need to co-operate more; in extreme cases the industry should hang together.” In addition, he pointed out, the UK is a major cornerstone of business for Sony DADC. “We need to have a presence and provide the services. Leaving the UK would have been the wrong message, even though it was a major undertaking just to get back to where we were.”

Matt Brown of Sony Pictures Home Entertainment, introduced as “just about the nicest guy in the industry”, hunkered down for a chat with Ben Keen after the second consumer panel, making the first questions from Keen an obvious one: had the panel provided any surprises? “First of all, we like to get the consumer perspective,” Brown said. “The biggest learning is that we take too much for granted. We need to tell people more – if you buy a car you are told about all the features. We need to do that with our products.”

Given the fact that younger people particularly are less interested in discs, and that people consume movies now in a number of ways and on a number of devices, Brown pointed out, “As content providers we have to provide content when and how consumers want it at a reasonable price.”

Has the industry moved fast enough? Keen wondered, or is it too late? “Some of the industry has been slow to change but the horse hasn’t bolted,” Brown stressed. “The consumer loves entertainment. Ultimately the consumer counts and we have to provide what they want. It was exciting to hear that people recognize Blu-ray is the best quality and sound. We are still selling a lot of physical product, and we still value bricks and mortar.” 

On the topic of piracy (“What about the value of content? It’s always hard to compete with free.”) Brown had very strong views. “Piracy drives me insane,” he declared. It doesn’t just hurt studios and actors, Brown stressed: Truck drivers lose money and jobs because content is stolen. There is still a lot of physical piracy as well as pirate download sites so it needs to be fought on all fronts. We need to be aggressive about it.”

Another fireside chat wasn’t quite what it should been: a discussion that could have proved very interesting – on the topic of the synergy between the theatrical sector and downstream content delivery – lost one of two interviewees, Rob Arthur of the Apollo Cinemas group, so the theatres weren’t heard from. Matt Smith, Head of Distribution at Lionsgate, had to answer for both the theatrical and the home entertainment sectors.

Like others over the course of the two days, Smith pointed to The Hunger Games as a record-breaking theatrical release: “The appetite for film is still there and home entertainment is the bulk of a title’s revenue so we want to see a theatrical success translated to home.” There are emerging markets, such as VOD and EST, he added, “But we don’t see DVD as being obsolete. Adults still want film and they are less likely to download.”

Another feature of the PEVE conferences: punches aren’t pulled, as Keen demonstrated by pointing out a comment often heard: the systems of theatrical windows is obsolete and a detriment to everything else. Shame that Rob Arthur wasn’t there to comment, but Smith did agree: “The windows model is not obsolete but it needs looking at and needs to be more flexible.” He pointed to examples of exhibitors pulling movies because of studios allowing home access too early, Alice in Wonderland being one of the most publicized examples when Odeon theatres in some European countries refused to show it because Disney reduced the window on it.

“Hard and fast windows need to be more flexible,” he said, adding that strict windows hands content “to pirates on a plate. Illegal downloads start as soon as a title is out of the cinema and then slow when the DVD comes out.”

While it is good to have a window of exclusivity for major titles, given that the top 20 titles account for 50% of the box office, said Smith, “Exhibitors think their only USP is the exclusive window but people still enjoy the experience. Exhibitors need to engage with other forms and join the party.” For instance, having exhibitors sell EST and VOD themselves and make money from it as well as the content owners. “Some titles are better in the cinema first, but windows should be shortened. It could positively impact piracy figures as people choose how and when to watch something.”

www.screendigest.com/events/peve

We had a conversation about 18 months ago, when Atlas Holdings had announced that it was buying the AGI brands (AGI Media, AGI Amaray and AGI Polymatrix) from Meadwestvaco. Since then there has been a big merger with Shorewood Packaging. Talk us through some of the recent developments and how the new business model has been unfolding.

During the first year after the sale of the company, we at AGI thought about how to expand the business and find ways of adding new opportunities to our portfolio. Physical media is obviously very challenged, and while we don’t subscribe completely to the doom and gloom some people project, we do recognize the challenge. We were looking at how to add new business which would balance the home entertainment sector, which is very Q4-centric, and improve the utilization of our assets.

And then, of course, the news broke about the AGI merger with Shorewood. That was a lot to take on as well; how did that come about?

As the move forward with Atlas details began to unfold during 2011, the opportunity arose to talk to International Paper about the possibility about merging AGI with Shorewood Packaging. The different strengths and weaknesses brought to the table by both businesses created strong synergies with Shorewood having a strong US foothold outside of the home entertainment industry, and AGI bringing a presence in Europe in addition to the Shorewood presence in Asia. When you put that together with the AGI history and strengths in home entertainment, you begin to see the opportunity to get much stronger asset utilization and an enterprise that is much less susceptible to Q4 seasonality.

Overall the merger has made us fitter and stronger in terms of balance sheet, global connectivity and a very powerful innovative mentality. Both AGI and Shorewood were always very innovation-focused.

Presumably there were geographical advantages as well, with two relatively global companies?

Yes, the combination brought strength to Europe, with AGI’s presence and also throughout Asia where Shorewood was more established. We’ve gone from the old AGI in North America and Europe to a more powerful presence across the Americas, Europe and Australasia, with revenues more than doubling in the process. We are now a real global company that is able to offer a truly global proposition and provide our customers with services that range from highly creative packaging design to consistent, high quality printing in all parts of the world.

Recently we have been producing a very big job in the home entertainment sector which was started in Europe, then went in to production in North America and recently we have been trialling for production in Asia. Not all companies are looking for a global supplier, but there are some who have that requirement, and for those who just require more regional services we are well positioned to provide that service and move towards a global offering should that be desired later.

What about the morale generally? People can get nervous with takeovers and mergers and you have gone through both in a relatively short space of time. How have you overcome any worries?

Naturally, immediately following the merger – as with any merger – there can be a feeling of uncertainty and insecurity among employees as well as all other stakeholders. There has been some consolidation but we have come through this now having also made some positive and significant changes to our sales and management organisation. We knew that once we got through Q1 and had done what we needed to do to integrate the two businesses, we would be over the worst. That was true, and once we were through March the atmosphere lifted considerably as everyone could see the empowerment coming back to the business.

Presumably, again, with takeover and merger there will have been other management changes throughout the company and up to the very top level. Where do you fit in now, for instance?

As far as the corporate structure goes, we have a new CEO in the US: Mike Ukropina; three regional CEOs: Mark Caines in North America, Lucy Tzou in Asia, and of course me in Europe; and we also have a global CFO and EVP, Don Eldert. We have also made some significant management changes in the European structure. Dustin Wills who was originally at Shorewood is now head of our home entertainment sales. He is a very strong part of the team, with a vast amount of experience in that sector. Martin Bril, from our Van de Steeg facility in Enschede, Holland, has been brought in as Director of New Business Sales, which is to a new role. Basically, Dustin will handle the home entertainment market, and Martin will handle everything else. Another big change is Suvi Sylvelin in our UK office moving to head up the marketing department. 

Another big issue surrounding takeovers and mergers is corporate identity. You recently had a change of identity and rebranding exercise following the Atlas acquisition, when you became AGI World. Now presumably you have to go through that process all over again to incorporate the Shorewood identity – how will that work?

I was asked to sponsor the rebranding process, which involves managing a group to carry out the task. That means that I need to remove any possible barriers they might run into as well as keeping the team focused. The branding team comprises the entire leadership team as well as people from both the US and European creative teams, and also bringing in creative people from Australia and Latin America. The first part of the process was one to one discussions with 30 major customers along with 120 online interviews. That was to help us get an idea of the perception, views and awareness of the brands, the names, etc. We now have to decide whether AGI-Shorewood is the best long-term identity and begin to build a new brand for the company.

So overall, it’s all a very positive message for employees, customers, and the industry in general?

Yes. We are now at that critical point where we will soon have to make the final decision around the branding. By the end of June we will be able to make announcements about the new brand and the new look. Obviously existing brands, like Amaray for example, will continue. As I said, once we got through the first quarter everything has settled down and is running much more smoothly. I’ve been with the company for over 19 years; when I first joined AGI it was the premier music packaging company in Europe and it’s nice to feel that we have continued to build and consolidate that position in home entertainment.

www.agishorewood.com

“We chose to partner with Gaikai’s game streaming service for its leading performance, graphics, and content,” stated Fraser Townley, President of Sales for Wikipad. “It is the leading game streaming solution with the best library of AAA games and we are thrilled to offer these high quality experiences to our users where Gaikai’s network is deployed.”

The Wikipad is capable of running games locally but will also offer extremely high performance games from Gaikai’s cloud gaming platform. “The Wikipad is one of the most exciting devices for gaming to date” said Robert Stevenson, EVP of Business Development & Strategic Partnerships at Gaikai.

“The tablet was designed with the needs of gamers in mind, enhancing the mobile gaming experience with a set of controls on par with today’s consoles and PC gamepads, enabling gameplay mechanics that have been previously unavailable with just touchscreen controls.”

www.gaikai.com
www.wikipad.com

The company also announced recently that it had received written notice from a non-core customer who has decided not to extend the fulfillment services currently provided by Cinram beyond the current term, which expires June 15, 2013. Cinram has provided distribution and related services to this customer since 2008. Revenues from this business for the year ended December 31, 2011 represented approximately 6% of the total consolidated revenues of Cinram International Inc.

Steve Brown, Cinram CEO, commented: “While we are disappointed with the decision by this customer to end our five-year relationship as their service provider of distribution services, we will nevertheless be working closely with them to ensure an orderly transition to a new provider of the services and ensuring that all affected employees and other stakeholders are given the absolute greatest consideration during this process.”

www.cinram.com

The study evaluated connected TV audience segments, platform familiarity and usage, as well as advertising effectiveness and engagement. It included online surveys of connected TV users and in-home interviews, and tracked eight Smart TV advertising campaigns for leading entertainment and conventional brands.

Key quantitative highlights of the survey were:

Awareness: 68% of users exposed to areas of Smart TV platforms with ad placements noticed the advertisements; 1 in 3 of those clicked through
Reach: Connected TV advertisements on select platforms delivered a claimed 6% incremental reach in addition to traditional media channels
Brand Favorability: Exposed versus non-exposed brands on the Smart TV platform produced favorability rates twice as high
Brand Association: 86% uplift in association with key brand statements for brands exposed on the Smart TV platform versus non-exposed control samples
Purchase Intent: 47% of connected TV viewers exposed to Smart TV ads claim they will investigate the product in the future; intent to purchase was 2.5 times higher compared to a non-exposed control sample
Engagement: 2 in 5 connected TV viewers exposed to Smart TV ads claimed to have watched the video featured on the brand's micro-site, with 79% of ad viewers claiming to have subsequently participated in additional product or brand-related activities

Smart TV ads were seen as non-intrusive because they were ‘contextually relevant' to the platform. Providing content in the form of trailers, clips, etc. was seen as valuable content in its own right. Content apps were found to be the most popular, generating a great appetite for consumers to engage in additional content from the advertiser's micro-site. “As our survey findings help reinforce, advanced TV advertising provides new opportunities for brands to efficiently and effectively reach consumers in the living room,” said Siegel.

www.rovicorp.com

The company faces an investigation by the Department of Labor over allegations that it failed to pay its employees. It has been sued by two vendors and its former CFO over alleged non-payments, and in turn filed a civil complaint against two businessmen who founded a website, savtiraexposed.com, charging that the website disseminated false and defamatory information about the company.

In his statement, Roberts said, “My complete focus is on the advancement of Savtira: our relentless push to market is driven by the knowledge that our patent protected technology will revolutionize the way our clients reach out online and experience an unparalleled level of access for consumers of online products.”

The Chapter 11 filing., he added, “will allow us to carry on, despite recent injuries”; injuries that he said included “a trail of breached contracts, official documents, and forensic evidence [which] revealed the insidious actions of a few individuals who have colluded to interfere with our business, to derail our strategy, and launch a public opinion battle to distract the public and our own clients, customers, vendors, and employees from the truth”.

The company’s strategy going forward, said Roberts, would be “aggressively pursuing every legal remedy available: we are gathering evidence and filing suit on several individuals to protect our shareholders, creditors, and our IP and patents from these malicious predators”.

There is a plan, he concluded to restore service in two to three weeks “on a much more secure and stable environment, which will further ensure our service integrity”.

www.savtira.com

In the US, according to figures compiled by DEG members tracking sources and retail input, overall consumer spending was up 2.5% compared to the first quarter last year, driven by the healthy consumer appetite for Blu-ray. Blu-ray now accounts for one out of four of all of the physical sell-through dollars spent by consumers compared to less than 15% two years ago. The progress in Blu-ray Disc sales is even more significant when viewed as growth off an ever-increasing base, says the DEG.

Highlights for the US home entertainment’s first quarter include:

• Blu-ray Disc and EST continued their steady gains with consumer spending on Blu-ray jumping 23% and EST up 17% compared to the same period last year.
• Physical sell-through of theatrical product was up 2% for the quarter, while catalog sales on Blu-ray Disc were up 27%, and TV on Blu-ray sales were up 54%.
• Consumers have opened nearly two million UltraViolet accounts to access their movies and TV shows in the cloud.
• The number of Blu-ray homes continues to climb, with 2.4 million players sold in the first quarter (including BD set-tops, PS3s and HTiBs).
• Total household penetration of all Blu-ray compatible devices now stands at more than 40.8 million U.S. homes.
• Further, 6.5 million HDTVs were sold to US consumers in the first quarter 2012. HDTV penetration to date is now at more than 77.6 million US households.

In the UK, the video entertainment market remained steady in the first quarter of 2012, according to a British Video Association (BVA) announcement. Blu-ray Discs grew in volume by almost 18% and 3.5 million discs sold in the first quarter. The 15% rise in value to £45.2 million, combined with DVD sales, meant that physical discs accounted for 70% of total video market value and remain the most popular way for viewers to access video entertainment. Demand for digital video also continues to rise, with sales increasing more than 14% to £72.8 million.

Lavinia Carey, Director General of the BVA said: “The Q1 figures show that the video industry is holding its own against a tough economic background. Given the pinch on the consumer purse, illustrated by the 4% drop in ASDA’s income tracker, it is heartening to see a 3.1% increase in the average weight of disc purchase, even though inflation remains relatively high. The rise in digital and Blu-ray sales is where we would hope to see growth and it is encouraging that our audience is increasingly enjoying viewing content on a range of formats, alongside the nation’s traditional favourite – the physical DVD.”

However, the total value overall of consumer spending on video entertainment in the UK slipped 3%.

www.bva.org.uk
www.degonline.org

Dan Brilot, YouGov’s Media Consulting Director, commented: “The ‘smart’ part of a Smart TV is not yet the main reason people are buying them; it’s more about future-proofing their TV set in the same way that lots of people bought HD TVs even before HD channels were available.”

The most common reason (50% of respondents) for intending to buy a Smart TV is simply having a more up-to-date TV. The most important feature of Smart TVs amongst people who already own one is the picture quality (96% of owners) followed by the size of the screen (93%) then sound quality (89%).

“I think many early adopters of Smart TV are buying them for the sake of owning the latest gadget,” said Brilot. “We see the profile (in terms of tech adoption) as very similar between iPad and Smart TV owners at the moment. These are the kind of people who are willing to make a big ticket purchase without quite realizing what they’ve bought.”

YouGov believes that Sony could well be overtaken by Samsung in the near future as the manufacturer of choice for Smart TV owners. Amongst Smart TV owners, over one third (36%) have a Sony, followed by Samsung (33%) then Panasonic (16%). However, almost two-thirds (62%) of people planning to purchase one in the next 12 months are considering Samsung, followed by Sony (48%) and Panasonic (40%).

Over one quarter (26%) say they plan to buy an Apple TV, even though the manufacturer has not yet launched one. Apple is also seen as the most stylish and innovative Smart TV brand; LG is seen as representing the best value for money while Hitachi is seen as the most outdated.

Brilot added, “Sony is seen as the quality or premium brand favoured by the early tech adopters – late 20- or 30-something men – but Samsung is the brand working the hardest and most successfully to bring Smart TV to the masses through its advertising campaigns as well as leading the way in the availability of apps on the sets. With 14% of UK households set to own one in the next year, Smart TV’s are likely to have a big impact on on traditional viewing habits. Just over one in three (35%) Smart TV owners say they now spend more time watching TV through on-demand services than they do watching traditional linear TV.

www.yougov.co.uk

Videographers can be part of large-scale productions but also manage smaller, event scale productions, such as commercials, documentaries, live events, short films, training videos, weddings and other family and business events. They often need to produce high-quality discs throughout the film and video process, but these quantities are typically quite small, used for drafts, promotions, launch events or small orders from individuals, and need to be created in a short amount of time.

Primera has designed its disc publishers for this type of situation; the latest model range offering the fastest disc printing in its class, with cost-effective, full-colour, 100% coverage discs in just six seconds each. The DP-4100 Series is Primera's first solution incorporating separate ink cartridges for Cyan, Magenta, Yellow and Black, which saves money on every printed disc as only the colour(s) that need replenishing needs to be replaced. This is especially true for print layouts using more of one colour than another.

Depending on the needed disc capacity, whether Blu-ray or just CD/DVD support is requested and whether a desktop or industry-grade solution is needed, Primera offers several different models starting with the DP-4051 – a small 50-disc capacity desktop model and ends with the DP-4102 XRP – an industrial version that comes in a 18-gauge steel cabinet with locking front door, high-wattage auto-switching commercial power supply and on top of that can be rack-mounted.

www.primera.eu

The NAB Show in Las Vegas (16th-19th April 2012) showed decent stats: exhibitor numbers rose slightly to just over 1,600 and they splayed out over more space (815,000 square feet versus 745,000 in 2011). Attendance was flat, though, at 91,932 from 151 countries, according to NAB’s preliminary figures, and substantially below the 108,000-plus who attended in 2007, just before the recession hit.

However, the number of issues facing broadcasters and content providers these days seems like a growth industry. These include monitoring the Federal Communications Commission’s implementation of the spectrum legislation signed into law in February that will probably result in some broadcasters relinquishing their spectrum to wireless operators, as well as a continued push to get wireless operators to include radio chips in cell phones so they can receive FM radio; media ownership; and the battle around retransmission consent rules, which require pay TV operators to negotiate fees to use broadcaster programming. But there was more of a focus this year on new technologies.

THREE DIMENSIONS

3D remains a significant issue in broadcast technology – the show began just as the 3D reissue of Titanic hit US cinemas and stores, and the principals of the Cameron | Pace group (unveiled at last year’s show) were on hand to discuss ‘The Secrets Of Making 3D Profitable’. 3D’s economic prospects have been hit and miss thus far, but projections remain optimistic.

For instance, according to forecasts from Informa Telecoms & Media, over 20 million TV homes globally will be watching 3D TV within five years. Backed by key industry players including set manufacturers, content owners, broadcasters, platforms and satellite operators, the analysis says that 3D TV is expected to be in 1.6% of all homes by 2015. North America will lead the way in terms of number of 3D TV homes with 9.2 million, Western Europe will be the second largest region with 6.8 million, and Asia Pacific third with 4.6 million.

Another market analysis, from DisplaySearch, put shipments of 3D liquid crystal display (LCD) TV panels at 7.8 million in Q4 2011, up 26% quarter to quarter. The firm estimates total 3D TV panel shipments in 2011 at 21.2 million, accounting for 10% of all LCD panels shipped. NPD forecast strong growth in the category of 138% for 2012, which would lead to 3D LCD TV panel shipments of 50 million units, for a penetration rate of 21.6% of all LCD TV panel shipments.

However, despite these optimistic predictions, observers agree that the absence of a glasses-free system of watching 3D TV will constrain growth, though Dolby’s demonstration of its new glasses-free 3D system was well-received (covered later in this article). Other limiting factors cited include lack of content, high production costs, scarcity of channels, bandwidth constraints and the relatively high cost of 3D sets.

Dr Barry Sandrew, founder, CEO and CTO of Legends3D, the largest US based 2D-to-3D conversion studio, and which served as the primary conversion partner on Academy Award-winning films including Transformers: Dark of the Moon and Hugo, as well as the pending 3D rerelease of the classic Top Gun, addressed several of the issues facing 3D broadcasting and cinema.

Sandrew believes 3D is in a growth period now and expects the format to become “ubiquitous” within three years, including in the broadcast realm, despite what he acknowledged to be a low level of acceptance among consumers to date. Besides market research analysis, Sandrew cited a combination of industry data and empirical observation, such as the doubling of on-demand 3D titles from his own cable provider in the last 12 months. He stated there are “no real [technical] challenges” to converting theatrical titles to 3D for cinema or broadcast applications – in fact, he said, converting 2D content to 3D is easier and less costly than shooting in 3D in the first place, citing the larger number of cameras and crew involved and the complexity of precisely aligning those cameras, particularly for action pictures, which are the largest genre for 3D. Sandrew further stated that Transformers, putatively shot in 3D, actually had 78 minutes of the movie upconverted by Legends3D.

Nonetheless, costs even for upconverted content are still substantial – between $10,000 and $15,000 per minute, he estimated, for high-quality conversions, though that’s less than even a year or so ago when they reached $20,000 per minute. Lower-quality work can be had for as little as $3,000 per minute, though Sandrew disparaged such shops as detrimental to the uptake of 3D amongst consumers.

Those costs, however, mean that 3D will have a longer slog of it in broadcast, despite the optimistic reports of 3D market penetration projections, because of the nature of TV’s core 30-minute content, which makes conversion less cost-effective. On the other hand, Sandrew pointed out, the relatively low video picture and action complexity of the typical television sit-com or drama, compared to action or sci-fi genres that have been the staple of 3D, makes for a lower-stress conversion environment that could eventually scale up to make financial sense for television production schedules and budgets. Legends3D is in the midst of negotiations for exactly that but Sandrew could not disclose the networks or shows involved due to NDAs.

Even streaming, which many foresee as the primary distribution method for television within the next decade, does not present a problem for 3D broadcast, Sandrew concluded. “The only place where it really strains bandwidth is when you have to broadcast the [3D and 2D] versions on the same pipe,” he said. Even streaming to handheld devices should not present a problem, as long as those devices use lenticular viewing solutions, which will reduce the demand on bandwidth. Sandrew’s own optimism is firm. “It took 25 years to transition from black and white to colour,” he said. “3D won’t take nearly as long.”

NEW LANDSCAPE, SAME CHALLENGES

There was a lot of over-the-horizon sentiment at NAB this year, as though the seemingly endless disagreements about carriage fees and licensing that’s taken up so much legal bandwidth in the US in the past year has compelled many to look for a more promising, hopefully simpler future. That was underscored by the contrast between last year’s keynote address by CBS head honcho Les Moonves versus this year’s crop of disrupters, including Netflix, Machinima, Electus and Revision3. But many using the NAB Show to start putting that future together are seeing plenty of familiar issues.

When I asked Mark Adams, Vice President of Accedo, which creates smart-TV and IPTV apps for partners like CNBC and MTV, what the time period we were in that would be analogous to previous cusps-of-new-eras, he thought for a moment and replied that it reminded him of the early 1980s, when multichannel cable systems were trying to get traction in the US. IPTV and smart-TV have a business model and an infrastructure, in the form of faster broadband implementation, but they’re still trying to figure out exactly what they are and convince consumers why they will need them. (Interestingly, John Leverence, the Senior Vice President of awards for the Academy of Television Arts & Sciences, cited a similar comparison in an interview with TheWrap.com, stating, “It is in 2012 what premium cable was in 1984.”)

“There’s nothing wrong with TV as it is, for most people,” Adams conceded, noting that licensing issues currently prevent consumers from having what they want when they want it on the platform of their choosing. “You can watch Mad Men on Vudu but not on a Roku [box],” he said. “But once these issues get straightened out, the potential is enormous. Until then, even though they’re reaching 38% of households, these kinds of services are supplementary and complementary, but they can’t replace the existing viewing experience fully. But sooner or later, they will see wider adoption. Meanwhile, the networks and content providers are looking for strategies, and that’s what we’re developing. And those strategies will be led by apps.”

UPSTAIRS, DOWNSTAIRS

While much of the main show floors were taken up with conventional terrestrial broadcasting technology, the upper level of the Las Vegas Convention Centre’s South Hall represented the future of broadcasting, and the further back one went on that level, the more ambitious but ambiguous that future looked, and longstanding challenges continue even as the landscape shifts from PC to laptop to mobile device. Mathew Gilliat-Smith, CEO of content protection systems developer Fortium Technologies, remarked that content providers are still looking to find the balance between strengthening content protection to reduce illicit copying and viewing on the one hand, but assiduously trying to avoid making accessing legitimate content so difficult that it compels consumers to seek out easier-to-access illicit copies.

“Approaches to [copy protection] solutions that have been around for years are still being talked about,” but not fully implemented, Gilliat-Smith said, because none have managed to strike that balance well enough. In addition, the legacy content industry has moved in fits and starts towards evaluating and adopting solutions, with some players being particularly adventurous – Gilliat-Smith pointed to Warners as an example – and others much less so. Meanwhile, these same copy protection issues have migrated to the mobile playing field without being fully resolved in previous formats. “It’s more urgent now,” he added.

At Civolution’s booth here, about halfway between Avid’s sprawling stand in the front of the hall and the smaller, aspirational start-ups towards the rear, CEO Alex Terpstra outlined some of the company’s accomplishments and new technologies, including its automatic content recognition system SyncNow, which uses combinations of audio and metadata to link and synchronize broadcast content with second-screen content, including advertising. Its Teletrax media intelligence and NexGuard forensic media protection systems are being positioned to be monetized more widely.

The notion of content unbound to traditional networks, available anywhere anytime, on any device, is inevitable, and sooner than later, Terpstra commented. The advantages to consumers are obvious, and younger media consumers consider it almost a right, while advertisers are already jockeying to find ways to turn second screens into revenue streams. The challenges, however, are considerable, he said, led by the concern that such ancillary advertising could cannibalize conventional advertising revenue.

Terpstra, whose company is descended from media conglomerate Philips after a 2008 spin-off (and still resides in Philips’ Eindhoven fortress), is not unsympathetic to such concerns, but he’s convinced that data will convert the cautious. “We need more ways to derive metrics from content usage,” he stressed. “The metrics will prove how valuable the new ways of distributing it can be.”

TECHNOLOGY ANNOUNCEMENTS

Dolby and Philips announced a joint project focused on enabling the kind of 3D experience on entertainment devices that will be critical for 3D becoming a success in the marketplace. Branded Dolby 3D, this suite of technologies aimed at devices with glasses-free (auto-stereoscopic) 3D displays combines many key benefits missing from the consumer 3D experience. These include integration with any 3D-enabled TV, tablet, laptop, or smartphone; automatic optimization of 3D content for the specific device and screen size; upgrading of half-resolution 3D to full resolution (for both glasses-free and traditional glasses-based 3D); and elimination of the ‘sweet spot’ by rendering multiple views for each display.

Transcoder developer Telestream and video library management and workflow software maker Levels Beyond announced an integration partnership of Vantage transcoding products and Reach Engine workflow software. The integration adds the library management and scalability of the Reach Engine platform to the video transcoding, media workflow and analysis tools of Vantage and extends them across multiple networks.

Combined, Vantage and Reach Engine allow users to ingest and conform content directly into their Reach Engine managed media libraries. Media and metadata sourced from Vantage is published directly to the Reach Engine asset database. Users can select any asset or group of assets from the Reach Engine web based interface and deliver those assets to any Vantage workflow. The Reach Engine web interface allows users to secure Vantage workflows based on roles and permissions. Live progress and status reporting is available directly in the Reach Engine web interface, allowing remote workers to monitor and manage Vantage workflows from any device at any time.

Rimage announced the launch of Rimage Signal Online Publishing, a platform to push secure mobile content to nearly any mobile device or computer. Companies can now publish content directly to their subscribers while applying security and usage policies to effectively manage and control their content, even when it is resident on subscribers’ devices and disconnected from the internet.

Signal allows companies to choose which devices can receive content, how long the content is available and the desired sequence of content playback. Companies can change, grant or revoke usage policies and optionally delete content from subscribed devices. Companies can upload media of all formats, such as videos, images, audio and documents for viewing on iPads and nearly any Windows, Mac, iOS or Android device. Transcoding and securing of files is streamlined into one step, regardless of the number of target devices.

Livestream introduced the Livestream Broadcaster device, a hardware encoder that simplifies broadcasting of live events in HD to the web, mobile and connected TVs. The Livestream Broadcaster is fully integrated with the New Livestream Platform, which offers unlimited, ad-free, HD streaming. The Livestream Broadcaster supports most 3G and 4G modems from US carriers, including Verizon 4G LTE, as well as many international carriers that enable wireless streaming in the field. Cameras connect to the Livestream Broadcaster via the HDMI video input (including 1080i, 720p and 480i). The Livestream Broadcaster encodes real-time in high quality H.264 video and AAC audio at up to 2.3Mbps. HDMI audio or line in (3.5-mm jack) audio input are provided.

The 2012 NAB Show underscored the continued existence of lines of demarcation between old and new guard when it comes to technology and business models. And existing challenges continue to confound content owners even as they realize that those challenges apply annoyingly well to new mobile and personal-device markets. It’s an industry still in transition.

www.nab.org
www.nabshow.com

Maybe it was the Association of Independent Media Manufacturers Association (AIMMA) joining forces with the Media-Tech Association (MTA) and the Colonial Purchasing Co-operative to produce a US show like the latter did in the two previous years. Or maybe it was the zany Day Two keynote presentation by Troma co-founder Lloyd Kaufman (pictured) whose oldest running US independent movie studio has been making independent, non-mainstream movies for nearly 40 years. [See below for more details on Kaufman's presentation.]

But independence and industry co-operation were recurring themes of Packaged Media & Beyond 2012 held in April at The Wynn casino and resort in Las Vegas, where MTA and Colonial mounted a similar event last spring at the same venue. In this time of less demand for physical media, all three synergistic trade organizations have recognized a need for co-operation, and in turn, strengthen their collective members’ aims (ie, remain in business, and perhaps even grow).

There was a wink-wink undercurrent to the proceedings that those in attendance embodied survival of the fittest, as everyone left back home an austerity-minded operation of working far harder for far less than they did a decade ago, yet somehow were able to muster enough funds to make the jaunt to the Vegas strip’s swankiest destinations. Although the conference featured speakers from replication Goliaths Cinram and Technicolor, both focused on non-physical disc aspects of their companies’ business, digital supply chain and second-screen applications, respectively.

The robust program included updates on progress made with UltraViolet and Managed Copy – both pro-consumer developments that give consumers more control of what they can do with their disc purchases. Other speakers covered critical aspects of the packaged media food chain such as storage, quality control, the volatility of petroleum prices impacting on plastics used in discs and packaging, and the unusual recent renaissance of vinyl. [For more on the vinyl renaissance, see the D2D article in Issue 16, page 16.]

Aaron Shapiro, CEO of New York-based digital marketing agency Huge Inc, which also has offices in London, Los Angeles and Rio de Janeiro, kicked off the day-and-a-half main conference’s ‘reinvention’ focus with his aptly titled keynote address ‘Surviving the Digital Economy.’ (The pre-show had Colonial and AIMMA holding board and member meetings, while vendors and suppliers made price-specific pitches to their media manufacturing customers.)

Shapiro, author of the recently published book Users, Not Customers, reminded the audience that these days, no matter what business you’re in, consumers or potential users of your products or services almost always check out your website first before calling. That being said, Shapiro urged, “Build up your ecosystem, customers naturally follow.” Acknowledging that he was speaking to packaged media professionals, the keynoter pointed out: “Media is everywhere, and it is no longer about ‘What do I own?’ Rather it’s about ‘How do I access it?’” He noted that brick-and-mortar Blockbuster and Borders failed to react to the changing marketplace, only to be supplanted by web-based Netflix and Amazon.

Getting into the psychology of why people buy, Shapiro advised that all successful businesses in the 21st century need to deliver digitally: “Trust, Convenience, Price and Fun.” Several speakers noted that with consumers’ thirst for digitally delivered entertainment going up, their monthly broadband bills are also going to increase.

POSITIVE DEVELOPMENTS

“Guaranteed Comcast will want higher rates from us if we’re streaming everything to our TV.” Keith Nissen, Research Director and principal analyst for NPD Entertainment Group, noted that generally consumers are moving away from traditional forms of entertainment, and replacing them with digital means.

Social networking is up, as is digital music. Meanwhile, people are not going to the cinema as much as they used to. Watching movies at home is down, as a result of the Netflix hiccup last winter. Consumers are buying fewer DVDs, CDs and video games. He attributed the declines to, “The overlay of a bad economy.”

Nissen provided some statistics about DVD’s current standing among US consumers’ leisure-time activities:

• 35% of consumers are purchasing or renting DVDs • Purchasing or renting DVDs is down 8% over the past year
• Standard DVD sales account for 46% of total video spending
• Netflix (21%); Blu-ray purchases (17%); DVD/BD rentals (7%); cable VOD (4%) 

“Another way to look at it is that [physical discs are] still the majority of the market, so it’s got a fairly long way to go before it goes away,” he commented.

But the movie studios are concerned about Blu-ray not compensating for lost DVD sales. The movie industry generally caters to males in their mid-20s, but disc purchases are made by older adults. Although Blu-ray sales are up year-on-year, “They’ve taken a dive in the last six months,” Nissen reported. By 2016, NPD projects that 61 million US households will have a Blu-ray player. “As long as there will be players there will be a Blu-ray market,” he said.

Another positive development borne out by current research is that despite their popularity, “Tablets and smartphones are not the primary screens that people prefer when watching full-length video. They want a big screen.” Retailers these days don’t offer as much product as they did previously, which explains diminished volumes for physical media sales, the analyst noted.

Video-on-demand subscription services offering original TV programming, such as Hulu-plus, a YouTube partnership with Disney, another from Yahoo, and HBO and Showtime deals with Netflix, are likely to further siphon DVD sales in 2012, according to Nissen.

Explaining Troma’s tendency of being an early adopter with home video technology, the self-deprecating Kaufman said, “Being a small company we can move fast – optimistically or stupidly.” Although Troma films never had major distribution theatrically or at retail, the VHS pioneer managed to get its 100-title catalogue in front of a loyal audience that still buys its bonus-packed DVDs and now rents them from Netflix. Following through on Kaufman’s libertarian approach to home entertainment, Troma will soon have a free dedicated, ad-supported channel on Comcast cable TV systems, and the studio already streams films from its website.

Prior to delivering his address on video game trends, Mark Fisher, Executive Vice President of the Entertainment Merchants Association, recounted how Troma’s biggest title The Toxic Avenger, soon to be made into a Broadway musical, was a major hit on video when the company he worked for supplied grocery stores with VHS tapes in the 1980s. Fisher reported that 72% of US households currently play video games, and, surprisingly, 29% of those individuals are over 50 years old and 42% are women.

Video games haven’t been immune to the economic downturn, coupled with digital alternatives, that has impacted negatively sales of music CDs and DVD movies. Hardware fell 35% while software fell 26% this past March, although total game revenue still totalled $1.1 billion, according to NPD numbers cited by Fisher. (For 2011, physical games totalled $9.3 billion in revenue, down 8% from 2010.) “It’s a very cyclical business,” Fisher noted, adding that EMA is projecting the overall video game market to soon bounce back, thanks to three new consoles: Nintendo Wii U later this year, and PlayStation 4 and Xbox Durango/720 next year. The good news for media manufacturers also is these new console iterations will still require a physical game disc, he added.

Victor Matsuda, representing the Blu-ray Disc Group, reported there are currently more than 36 million US Blu-ray households (roughly one third), increasing by nearly 40% over 2010 (Source: Futuresource) and that HDTV penetration is now nearly 75 million US households. Citing numbers from the Digital Entertainment Group, Matsuda reported software unit sales grew by over 30% in 2011 and that Blu-ray accounted for 40.1% of disc sales of the Top 10 titles released in 2011, up from 27% in 2010. In addition, consumer spending on software surpassed $2 billion for the first time ever.

Still, the costs involved in manufacturing Blu-ray are apparently beyond the financial means of smaller replicators in attendance at the conference, some whom quipped whether “Blu-ray is a fad?”

THE FOUNDATION OF SUCCESS

In general, Michael Weiss, CEO of Rockville, Maryland-based Video Labs and President of AIMMA, was pleased with the event: “The conference was exactly what the media manufacturing industry needed. While the death of media manufacturing has been pronounced by so-called experts, the conference’s take-away is that media manufacturing has morphed into media services. In other words, folks are no longer simply making copies, but rather businesses are distributing communiqué and using ancillary streams such as captioning and post-production to support effective distribution. The event brought together experts who provided attendees with tools and such valuable insight into the economy and technology as it relates to media services.”

Attendee Frank Loverme, Sales and Business Development for California-based Emerging Technologies, agreed with Weiss’s assessment: “The topics were relevant and presented by key industry thought-leaders. Networking opportunities were abundant. The Wynn Hotel was a terrific venue with great food. And the event smartly coincided with NAB. I give it five stars!”

Morris Ballen, Vice Chairman of Disc Makers, also praised the conference for being conducive to networking. “We get together only once a year. There was a great turnout [a sentiment echoed by Colonial President Doug Franzen] and The Wynn is a great venue,” said Ballen, praising the “comradeship” among the attendees. (Incidentally, Disc Makers is now known corporately as AVL Digital Group; thus providing an example of one company already moving in the digital direction to supplement its core disc business.)

“The industry is still alive, and in some areas we are doing better than expected, as with in CD,” commented Media-Tech Association Chairman Frank Hartwig. “It is more and more important that companies build a strong relationship between North America and Europe. With this second combined conference [with synergistic trade association partners] we showed that we are committed to this idea on both continents. We will gain more business, a better cost structure and we will expand our knowledge base. The conference was again a success story and we will do it again next year. The networking and the growth of interaction between Colonial Purchasing and the Media-Tech Association is the foundation of success for all stakeholders.”

Why Kaufman’s presentation was zany
I meant ‘zany’ in that Lloyd wasn't your typical keynoter, which was exactly what I was aiming for when I invited him and put him on first in the morning to ‘wake up’ the audience. And he didn't disappoint; audience laughter was abundant. Firstly, Troma films generally are comedies that are take-offs on classics and/or genre films with pun titles like Tromeo & Juliet, infused with gratuitous violence (think Monty Python and “it's just a flesh wound”).

As Kaufman spoke, a reel of Troma's greatest hits played on the big screen behind him. But it was also what he said, provocative statements, considering the audience, such as “piracy is good”, as he displayed a Chinese Blu-ray bootleg of one of Troma's biggest titles, Poultrygeist, in deluxe packaging, better than what his own company provides, he jealously admitted.

Kaufman believes that a kid who makes copies of an un-copy protected Troma film and then gives them to his friends, is not stealing, a far cry from the traditional Hollywood studio line on home entertainment.

He ended the talk with a self-deprecating clip of him homeless on the street, hawking Troma DVDs to passers-by for $1 each so he could eat. Lloyd and his wife, Pat Sweeney Kaufman, who is the New York State Film Commissioner, then presented me with an Official Troma Diploma for “supporting truly independent art”. The audience loved it; me too. I told them how my parents would be so proud. Honestly, I was touched.

Larry Jaffee, conference program organizer and event reporter.

The first thing that was different about this event was that the networking drinks were held first to loosen things up and let panel and audience mingle. This set the tone of the discussion which was frank, open and honest with standing room only at the back. There were also plenty of men in the audience coming along to see what this was all about!

In my own career I have worked my way up through the ranks of various areas of technology, attending meetings, events and speaking at conferences usually totally dominated by males so this topic is very dear to my heart.

The powerful group of women panellists included Darcy Antonellis, President Technical Operations, Warner Bros; Jenny Fulle, Founder and Visual Effects Producer, The Creative Cartel; Veronica Sheehan, SVP Global Network Operations & International IT, Turner Broadcasting Inc; and Diane Tryneski, EVP & Production Operations, HBO.

Topics included the current challenges of this business, how to get more women into echnology and inspire new careers, the challenges of being a woman in this industry, and the differences in style from male leadership, as well as risks the panellists had taken to further their careers.

A number of current business challenges were cited: for instance, publishing for second screens: with multiple platforms and dot.com businesses, old workflows no longer support the business. For international distribution, regional differences and re-versioning, the world of post-production is changing, with automated software, such as audio recognition, being tested. The challenges in motion pictures and the visual effects world are moving massive petabytes worth of data around the world, and managing and storing this cost-effectively. The tape shortage accelerated file based usage by 50% and boosted file distribution.

And a challenge for most businesses these days: how to incorporate social media now that consumers themselves are in the digital space. The pace is a problem; with the lack of standards it is hard to is keep up. New media challenges, such as testing a new app for mobile device compatibility means running 800 devices at once in the development stages.

The advice on getting more women into technology was varied. Warner’s Antonellis felt it needs to start with young girls in eduction being encouraged to study maths and computer sciences. She said: ‘A concern is the lack of a really robust and well represented workforce with enough women in media and entertainment, which is currently a low 20% representation.”

Mentorship was also stressed, women reaching out to help other women and nurture their careers. Internships is another area to be explored, giving young women the opportunity to move from department to department and learn about technology in on-the-job training.

The most revealing responses came from the question posed on how differently women work from men and how it benefits this industry. Sheehan felt: “The ego based boss is usually male, whereas women are more collaborative and are better at relationships and bridge-building. They don't mind asking for help. I was not embarrassed to ask when I didn’t know something. Men will pretend they know when they don't! It's about knowing what you bring to the table.” HBO’s Tryneski: “It’s important to be open, recognize skill sets, don't feign something you don't know, it is about people skills and understanding other’s strengths, and women are good at this.” 

Then came the question of the risks that these women had been prepared to take for their careers and these responses are fascinating, if not a little intimidating! Antonellis moved 3,000 miles across the country to Warner in June 1998, which she described as “an unsettling move but a great professional decision”. Diane Tryneski quoted, “Taking jobs in areas where I didn’t have a background, I went from CBS set design to finance to telecommunications. This broad background opened up a move to Discovery on the creative side and then back to technical. These were all big risks! Sheehan moved from New York to Atlanta to join the network, then took on a global role having just adopted a baby boy as a single parent and first-time mother! Fulle of the Creative Cartel cited hers: “ My biggest risk was to leave Sony after 11 years as an Executive Vice President and set up my own company to make myself happier."

Personally, my big takeaway from the session was a great quote from Veronica Sheehan “Get your priorities right, a job won’t hug you at night!”

“Mobile devices have clearly captured the attention of many consumers and companies within the content value chain, but consumer electronics devices like TVs, Blu-ray players, and game consoles remain at the heart of the digital living room,” said senior analyst Michael Inouye. “Connectivity continues to present new opportunities for all members within the value chain to enrich the user experience and mobile devices will increasingly be an additive part of the equation.”

Second screen applications and social TV applications like GetGlue, Miso, zeebox, Disney Second Screen, and Shazam are prime examples where mobile devices are accentuating the viewing experience in the living room. Programming the DVR and multiscreen services are also gaining a great deal of attention from pay-TV operators and consumers alike, but this is still a nascent facet of the market.

“There will always be value in viewing content on the large screen, so we do not see these mobile applications as subtractive or competitive to the connected CE space,” added Inouye. “Respondents, for instance, continue to favor connected CE devices for viewing Internet video content on the main screen over alternatives like smartphones or tablets.

“While connecting a mobile device to the TV screen or wirelessly mirroring the screen may be foreign to many consumers, this practice will occur more frequently as the market and consumer behavior evolves, but given the portable nature of these devices and social nature of TV viewing fixed devices will continue to have a strong role to play in the digital living room.”

www.abiresearch.com

ADR AG and Solstice intend to jointly distribute CD/DVD/Blu-ray Disc wrapping and packaging machines, products and services designed to offer consumers, publishers and distributors more choice and opportunity. Solstice will be the main distributor of ADR products in the US, handling sales, customer service and technical support from their offices in the US and Canada. In the future Solstice might also consider taking on more of ADR’s product range such as rollcoaters and laminators.

www.cd-robotics.com
www.solstice-inc.com

“Blu Ray gives us an additional service for our European film customers, as a company we are committed to offering the broadest possible service for all our customers,” said EDC Sales & Marketing Director, Paul Murphy. “We are particularly keen to further support independent labels for whom Blu-Ray forms part of the future. We are looking forward to continuing to build our presence in this area of the market"

www.edc-gmbh.com

The run is a huge challenge for the AGI-Shorewood Team but it's for a great cause so please join D2D and make the pain worthwhile by digging deep and donating online now.

Jeans for Genes is a charity that aims to change the world for children with genetic disorders. Individually, genetic disorders are rare but together they affect 1 in 25 children born in the UK – that's more than 30,000 babies each year. Their associated health problems mean that genetic disorders are the biggest cause of death of children aged 14 years and under. The Bupa London 10k is presented by the London Marathon and is run on the course likely to be used for the 2012 Olympic Marathons.

Photo, top from left: Malcolm Swindell, Celine Perron, Rudy Martinez, Gemma Pratt, Nina Raphael, Roger Ward, Debbie Wilson. Bottom from left: Ed Crocombe, Suvi Sylvelin, Maria Vazquez-Ricote and Hazel Forsyth

To donate: http://www.justgiving.com/AGI-Shorewood
www.jeansforgenesday.org
www.london10000.co.uk

Paramount Pictures and Universal Studios, which brought us iconic and unforgettable movie characters like The Godfather, the adorable extra-terrestrial E.T. and the great white shark in Jaws, both turn 100 years old this year. The two studios are celebrating their centennials in much the same way: new logos, restorations of classic titles and consumer sweepstakes and promotions all year long.

But the current financial status of these venerable Hollywood titans could not be more different: Paramount earned $5.17 billion worldwide in 2011, while Universal’s revenues were flat at $4.5 billion and the studio’s operating income fell almost 96%. Woe, alas, in Hollywood, some things never change: you’re only as good as your last motion picture. Paramount had a string of box office successes among the 16 films it released in 2011: Transformers: Dark of the Moon; Rango, its first animated movie; and new instalments in its Mission Impossible and Paranormal Activity franchises. But, Universal had a series of disappointing box office returns on the majority of the 15 films it released last year, including Cowboys & Aliens, Larry Crowne and The Change-Up, with only two genuine hits: Bridesmaids and Fast Five.

And, from the executives that run the studios, just as their predecessors have uttered for the past century: mea culpa for the flops, praise for the hits. And, to be fair to Universal, the studio had excellent numbers in 2010, largely due to the mega-hit Despicable Me, which made $543 million in global ticket sales and sold 3.75 million DVDs in its first week of release at retail. (Universal also did not have the biggest dud of the year – that honour belongs to Disney, which is expected to lose $200 million on John Carter, an action-adventure movie that failed miserably last year because, according to most critics, its script was completely incomprehensible.)

Steve Burke, CEO of NBC Universal, the parent company of Universal Studios, acknowledges the “underperformance” of the studio’s 15 movies in 2011 as compared to the 15 movies released in 2010. Plus, NBC Universal is in the midst of a costly and continuing turnaround effort at NBC-TV and, another division, Universal Studios Home Entertainment, had lower revenue thanks to declining DVD sales. In total, Universal’s adjusted operating cash flow – basically the money a studio uses to operate its divisions – fell 95.8% to $10 million from $230 million in 2010.

Top of mind for Burke – Universal’s summer 2012 releases, which includes the highly-anticipated Snow White and the Huntsman (opening in the US June 1st) and the next instalment in the Jason Bourne franchise, The Bourne Legacy (August 3rd). “We’re very optimistic about the 2012 slate,” Burke says. “We think we can see some improvement in film.”

MOVIE ATTENDANCE DOWN

The cyclical nature of the film industry makes every studio vulnerable at the start of every release year, and banking on a blockbuster that is rejected by the public has nearly bankrupted studios in the past. Hollywood has also long been at odds with Wall Street over the creative spreadsheets the studios’ finance departments use to explain why the cost of making movies continues to skyrocket.

And research supports the very real contention that going out to the movies is not the top choice in entertainment as it was as recently as 10 years ago. An increasingly tech-savvy public now turns to Netflix, video streaming and Video-on-Demand to save themselves time and money. Last year, North American movie ticket sales fell 3.8% to $10.2 billion, and overall attendance dropped 4.2% to 1.3 billion. Research from the Motion Picture Association of American (MPAA) reveals that the drop in movie attendance is nothing new: from 2000 to 2011, the percentage of people who “frequently” go to the movies dropped from 30% to 10%, while the ranks of those who never attend grew to 33% from 26%.

Nevertheless, the MPAA released an optimistic forecast in March for the theatrical movie business this year. And film studios were supposed to disappear after television was invented, so competing against new devices with smaller screens that encourage people to watch their entertainment at home is nothing new in the history of Hollywood.

Once again, and as it has been for all film studios over the past century: it’s all about the movie. Driven by mega-hit The Hunger Games, 2012 box office receipts are already up about 13% year-to-date over last year and there are strong films with excellent advance buzz set to break this summer. One or two good movies in the summer can be enough to deliver a profitable year to a studio, although release patterns have changed to include the important week between Christmas and New Year’s Day and also early in the first quarter.

“The studio model is not dead, DVDs are not dead – just look at Redbox’s revenue – but the studios’ way of thinking is dead, says Dan Rayburn, Principal Analyst at Frost & Sullivan. “The reason demand is less is so many more movies are crap. Their entire business revolves around hoping that one movie out of five is a blockbuster.”

Ironically, Universal is the studio that launched the concept of ‘the summer blockbuster’ when it released Jaws in June 1975. At the time, Universal spent an unprecedented $1.8 million in promoting a movie that cost only $9 million to make. The studio inaugurated the idea of wide release – opening Jaws on 450 US movie screens – and then backed up their effort with three things now considered standard when promoting a potential blockbuster: national TV ads; marketing tie-ins with toy companies, publishers and novelty manufacturers; and saturation press coverage, making the film’s actors and creative team available for widespread print interviews and guest appearances on TV.

Jaws recouped its production costs in two weeks and the movie went on to earn close to $471 million and win three Academy Awards.

On August 14th of this year, Universal will finally release Jaws on Blu-ray disc, one of 13 classic films to be digitally remastered and fully restored as part of the studio’s 100th birthday celebrations.

Jaws also ushered in an insatiable appetite for American films abroad. “Jaws holds a unique place, not just in Universal Pictures’ history, but in global pop culture,” comments Craig Kornblau, President of Universal Studios Home Entertainment.

Saturation marketing is now the worldwide norm for big releases, with stars and directors attending splashy red carpet openings for their movies in three or four international cities, not just Los Angeles. And international ticket buyers have not let Hollywood down in the nearly 40 years since Jaws was first released and became a global hit.

While North American attendance for movies was down last year, Hollywood can thank foreign box offices for helping once again to offset poor US and Canadian returns. The global market for theatrical releases was red-hot in 2011. International ticket sales were up 7% and the total box office receipts were an impressive $32.6 billion in 2011. Among the standouts: Japan, with $2.3 billion in ticket sales; China and France with $2 billion each; the UK with $1.7 billion and India with $1.4 billion. Also growing fast: the number of new movie theatres being built in China, Russia and Latin America.

What most alarms studio executives is the drop in movie attendance in the US and Canada among young people. There are still immediate ‘must go see’ movies for young people – the new Harry Potter, the new Twilight instalment, and now, The Hunger Games, but analysts say that tweens and teens want to watch less popular movies on their own timelines. Competing with tweets and texts, Facebook and smartphones has left studios searching for how to re-capture the coveted teenagers’ time – and get them back in the movie theatres.

ULTRAVIOLET: FRIEND OR FOE?

Studios are expected to cut the number of films they release in coming years, especially since consumers are now balking at paying more for movie tickets, most notably 3-D premium tickets. Poor attendance figures combined with fewer movies is “just the beginning of emerging secular headwinds facing the box office,” believes Robert Fishman, an analyst with Nomura Securities.

Fishman predicts 2012 will be a good year for box office tickets sales, but expects attendance to fall slowly and steadily from 2013 to 2016. He warned cinema owners in a first look report in March that movie attendance will also be hurt by changing release patterns, including premium VOD.

“Based on our discussion with different studios, we believe there is likely to be another push for premium VOD either towards the end of the year or next year,” Fishman notes.

Releasing fewer movies is a sensible strategy that will benefit everyone in the entertainment content business, Rayburn predicts, “I hope studios make less movies as a result of focusing on quality over quantity.” He is far less optimistic about the future of UltraViolet (UV), a format backed by Paramount and NBC Universal, among other studios, consumer electronics manufacturers, cable TV companies, internet service providers and retailers.

The platform is intended to reinvigorate disc and digital sales at a time when more consumers are renting. Consumers have already created more than 1 million UV accounts, but Apple is not part of the consortium of companies that support UltraViolet, nor is Disney, which is developing its own competing platform. So far, UltraViolet has only been available in the US and the UK. “UltraViolet is just another way for the studios to try and get consumers to pay for the same piece of content over and over,” believes Rayburn. “Look at the numbers 18 months from now and you will see that consumers aren’t using the UV platform at all.”

Chief among analysts’ criticisms of UltraViolet is that the “buy it once, play it anytime and on any device” premise behind the new platform should be cheaper and more convenient for consumers, especially to generate positive buzz among early adopters. “The fact they are charging $5 to convert a DVD to digital says it all,” according to Rayburn. “ParamountMovies.com is selling 10-plus year old movies for $20. Why would a consumer buy that when they can rent it for $3 to $4 or buy the Blu-ray for $10? There is no incentive to use UltraViolet.”

Consumers have already balked at higher box office prices and there was collective backlash against Netflix when that company changed its pricing structure; they also rebel against higher VOD prices.

“Remember Movielink? Notice that Vudu (Walmart), Sony (PlayStation 3) and Microsoft (Xbox) have never disclosed how many movies they have rented or sold via their platforms,” says Rayburn. “It’s because the numbers are so low, because the prices are too high and consumers won’t buy in volume.”

THE SOCIAL CONNECTION

Key to the future business models of both Paramount and Universal in the coming year is continuing to connect with the youth market across every digital device and social network. Movie trailers for the studios’ summer releases now routinely pop up on smartphones. Paramount Home Media Distribution’s primary sweepstakes to celebrate its centennial are being conducted on Facebook; visitors to the studio’s page can enter every month to win a free trip to a destination city featured in one of Paramount’s classic films.

And Universal has designed a massive comprehensive marketing program, designed to bring the studios’ 100 years to life online, across every social media platform. Among the highlights Universal is launching this year: an official website for its centennial,; first-ever archival sharing of content on its new Tumblr site; and exclusives and special promotions for fans of Universal on Facebook and Twitter. Foursquare users who check in at Universal’s studio theme parks will be able to unlock special behind-the-scenes tips and content.

Part of staying relevant for young people is letting them share in pop-culture classics of the modern era. So, for fashion followers, Universal’s Pinterest account will be drawing inspiration from movies like The Breakfast Club, Scarface, Sixteen Candles, Bridget Jones’ Diary and Bridesmaids for users’ Pinboards.

Bridesmaids is an example of exactly the kind of movie Universal wants in its arsenal every year, a cross-over hit among women, the young, and Baby Boomers at the cinema, on VOD and on disc. At the box office, Bridesmaids earned $288 million worldwide, and $169 million domestically. More significantly, Bridesmaids is the top-selling transactional VOD title in history, with almost 4.9 million rental orders since its release on September 20th of last year. The title has grossed more than $24 million on VOD, and, when including iVOD, hotel viewings, electronic sell-through and pay-per-view, Bridesmaids has totalled more than 7 million orders with grosses of $40 million domestically.

Finally, according to Universal, Bridesmaids has also sold more than $100 million in Blu-ray Disc and DVD sales in the US alone.

THE OLDER CLASSICS

No celebration of new technology and platforms would be complete without a nod to the past 100 years of unforgettable movies both Paramount and Universal have produced.

To that end, Universal is planning to release E.T. The Extra-Terrestrial on Blu-ray, timed to coincide with the movie’s 30th anniversary year. The studio also updated its globe logo to reflect its 100th birthday achievement.

Just as Universal is doing, Paramount Home Media Distribution is dipping into its rich library of hits to release 12 classic movies on Blu-ray disc which includes the winner of the very first Academy Award for Best Picture, 1927’s World War I drama Wings; Love Story; Chinatown; and the Hitchcock classic, To Catch A Thief. Due out in the coming months on Blu-ray from Paramount: Hondo (June 5th) and Barbarella (July 3rd).

Universal, founded on April 30th, 1912, actually holds the honour of being the very first Hollywood studio to turn 100 years old. Paramount was founded as Famous Players Film Company by Adolph Zukor in May 1912 – hence the studio’s claim to 100 years in entertainment this year – but Paramount Pictures Corp did not become incorporated until 1914.

That’s okay, the studio is quick to point out, as Paramount boasts the single oldest surviving film logo in the motion picture industry (these things are important in historical Hollywood): the familiar snow-capped peak with the name Paramount across it was created in 1916. The studio, just as Universal has done, updated its logo to reflect its centennial, with the 100-year designation to be removed in 2013.

Paramount’s Facebook sweepstakes, the first of its kind by the studio, invites fans to win roundtrip airfare and hotel stays at cities made famous in Paramount Films: New York, where The Godfather and Breakfast at Tiffany’s were filmed; Chicago, the location for Ferris Bueller’s Day Off; San Antonio, Texas, the location for Wings and Hollywood, where Sunset Boulevard was filmed, along with thousands of other Paramount productions.

Paramount also holds the distinction of being the last film studio still located in Hollywood proper in the city of Los Angeles: the Paramount gates and entire studio backlot and sets still stand at 5555 Melrose Avenue.

www.paramount.com
www.universalstudios.com

Almost three-quarters of connected TV owners are using their TV to connect to the internet according to a new consumer research study in the ‘Living with Digital’ series from Futuresource Consulting. Connection rates are highest in France at 71% and lowest in the UK at 56%. However, with increasing numbers of Wi-Fi enabled models emerging into the market, these figures are set to rise.

Putting the research in context, internet connectivity has expanded rapidly in recent years with a wide array of mass market home and mobile devices now offering access. Until relatively recently, if someone wanted to connect to the internet the only route was via a PC or laptop, but now almost every type of consumer electronics device comes with internet connectivity as standard.

At the same time, many of these products – led by the smartphone – have seen an explosion in sales growth, taking some of these items to mass market status. This trend has radically changed the way that consumers live their lives, carrying out interactions and functions on the move that were previously confined to the home or office. Watching TV and movies and playing games on the move have all become commonplace, while online shopping, web surfing and social networking have become significantly more popular as the range and ownership of connected devices has expanded.

Hampered by the poor economic climate, consumers are no longer buying and replacing consumer electronics products in the same way that they did in the past, while the growing array of multi-functional devices is removing the need for some standalone products. The competitive situation has become more intense as a range of new products bring new brands to a business once dominated by traditional CE suppliers.

As a result, gaining insights into what drives brand loyalty and what influences new purchases is becoming more and more important.

Our new study explores digital entertainment behaviours and is nationally representative by age and by gender, focusing on the key growth areas of connected TVs, smartphones, tablets, eBooks and eReaders. Conducted in March 2012, a total of 4,000 consumers aged from 16 to more than 66 years old completed the online survey across the US, UK, France and Germany.

Results from the study show that ‘Watching Videos on YouTube’ was the most frequently used aspect of a connected TV by respondents in households which own a connected TV in Germany and France, while in the US the most frequently mentioned aspect was ‘Watching Movies’. In the UK ‘Watching Catch-up TV’ was mentioned as the most frequently used aspect.

62% of respondents said they interact with additional electronic devices while watching TV, with laptops and mobile phones being the devices most commonly used. Although the majority are doing completely unrelated activities, a significant 25% of respondents are now going online to find out more about the programme that they are watching. Looking to the apps, YouTube is undoubtedly the most popular app for connected TV across all countries, with Germany and France also favouring Facebook; BBC iPlayer in the UK and Netflix in the US.

In addition, nearly half of all respondents download apps onto their smartphone and/or tablet. Apple device owners are more likely to download apps than those with other brands, with the most frequently downloaded genres for both devices being games, social networking and weather, plus news, books and music for tablets. The most popular ways to search for new apps is via online app stores or by word of mouth, with 85% being downloaded through dedicated stores. Tablet owners are most likely to pay for apps and, by country, respondents from the US were found to be more willing to pay.

Looking at respondents with children, the study found that laptops are the devices most commonly used by children. 44% use a smartphone, with over half using them to listen to music. 20% use a tablet to surf the web in addition to listening to music and 33% watch video content on connected devices. The study also identified availability and choice of content as key differentiators in brand selection when purchasing devices.

As a result, those companies that have realized the importance of content to help develop brand loyalty have been the clear winners. Companies like Apple, Samsung and Amazon have developed comprehensive content ecosystems, which have been fundamental in helping to lock consumers in and grow market share.

www.futuresource-consulting.com

Broadcasters are taking a big interest in second screen for both opportunistic and defensive reasons. Second screen presents broadcasters with new ways of engaging with audiences, promoting channel loyalty and extending the advertising market. In the US, ConnectTV an alliance of ten broadcast groups that represent more than 250 channels and cover more than 76 million households, is a social network for TV viewers, who can share comments and access additional content.

In the UK, commercial broadcasters ITV and Channel 4 are developing second screen apps. Other broadcasters have taken a stake in second screen app developers, such as Sky, which has a 10% stake in Zeebox, and Fox, which has bought into ACTV8.me. “For Sky, second screen is a fantastic way of getting people to engage with their content and develop targeted advertising,” says Charlotte Miller, Research Analyst at Juniper Research. “Wouldn’t you want to know who is watching your show; what they think of it and what their friends are saying about it?”

Broadcasters want to keep eyeballs fixed to their channels and advertisements, and the danger is that second screen means that viewers are doing something else rather than watching the big screen. “TV networks need to strike a balance,” says David Berkowitz, Vice President at digital marketing agency 360i. “Network executives should accept that people are using their digital devices the entire time programs are airing, including during the commercials. Second, the networks are looking for ways to ensure more people watch the ads. Creating second screen experiences are a way of keeping people engaged the entire time.”

Berkowitz adds that ultimately, second screen should end up making TV advertising more accountable and even more valuable. “If TV ad viewers can receive entertaining content, useful information and discounts through a second screen device, it makes the TV ads more valuable for the advertiser, consumer, and network,” he says.

Programs such as The X-Factor, Celebrity Apprentice and The Oscars have developed specific apps that allow viewers to exchange views on Facebook or Twitter, and access extra content. But second screen app developers say that consumers won’t want the hassle of having to download different apps for different programs, and that a generic ‘one size fits all’ second screen app offers a much better user experience.

Some app developers, like Zeebox, have created tools that enable program makers to develop second screen content for a specific app or second screen platform. Charlotte Miller thinks it’s unlikely that individual programs will become the second screen gateway for most viewers. “People tend to associate TV programs or TV series with a channel or platform. A lot of power resides with the broadcasters, and with film rental services like Netflix and LoveFilm.”

Adrian Drury, Principal for media tech, broadcast & telecoms at research and consultancy company Ovum, believes that the TV screen will drive traffic to the second screen, pointing viewers in the direction of offerings such as brand web channels or web video ads, and he concurs with Shiv Singh, PepsiCo Global Head of Digital, who says that, “The TV spot has become the trailer for something bigger, broader and more interactive... they will be trailers into deeper branded digital experiences.”

Smart TV manufacturers like Sony, Philips, Toshiba, Panasonic and Samsung have launched app stores for their products. Almost all Smart TV manufacturers offer closed gardens, with users limited to the apps offered by the manufacturer. But critics of Smart TVs say that TV watching is communal, while second screening is personal. Who wants to be watching a program with friends or family and have their viewing disrupted by someone posting comments on Facebook?

But Andy Eardley, co-founder and Director of The App Agency, which develops Smart TV apps for brands, says there is a place for second screen-like experiences on the main set, “It’s about whether the information is personal or shared. For personal information – like our Facebook page – we’ll use a smartphone or tablet, but for shared information, it’s better if people can gather around a big screen.” The TV App Agency has developed apps for a range of brands and businesses, including Rightmove for property finding and Seychelles Connect for holidays.

Smart TV manufacturers say that second screen does not pose a threat to them. “The concept behind the second screen is to add to the experience of watching TV on a main set rather than replace it,” says Amit Rullay, Trade Marketing Manager – Television, for Philips UK. “So we don’t believe it will threaten TV manufacturers. In fact, as part of our Smart TV functionality, Philips has already made apps available for Apple and Android phones and tablets to operate our sets.”

Social network giants like Facebook and Twitter are generating massive amounts of second screen traffic but, at present, visitors are going to these sites via their TV screen or a second screen app. But it’s hard to imagine that Facebook at least, will not try to become a gateway for the second screen experience. However, the problem facing all players in the second screen market is how to generate revenues.

“In the UK, people are so accustomed to getting their content for free from sites such as BBC iPlayer that it’s going to be difficult to charge for additional second screen content,” says Miller. “One way of monetizing second screen could be to sell it as part of a TV package, and [the online TV subscription service] Hulu Plus shows that a degree of upselling is possible.”

Adrian Drury says that advertising and data collection offer commercial opportunities in the second screen world. “Are you going to get people to pay to use your app and get more information about a show? The answer is ‘No’ because people can get that for free from Google, so no one is going down that route. This is about selling incremental advertising inventory on top of the TV experience.”

All the new players in this market – such as Zeebox, GetGlue and Miso – have adopted a business model that is about building a critical mass of users by offering a free app. Zeebox, for example, relies on the fact that users log into their system (and thus provide their ID) and give information about what they are watching. Zeebox uses these parameters to provide extra contextual information, and some of this information includes sponsored keywords. If this motivates the second screen user to make a purchase, Zeebox takes a cut of the transaction.

The second screen company Viggle – owned by Function(x) – encourages people to watch advertisements and check into TV shows by paying them virtual money (in the form of redeemable points), which can be exchanged for gift cards, tickets and other goods at vendors such as Amazon, Best Buy and the iTunes Store. Chris Stephenson, President of Function(x) describes Viggle as a: “Loyalty program for TV,” and since its launch in early 2012, Viggle has attracted more than 250,000 registered users, recorded more than 7 million check-ins, and users have redeemed over 123,000 reward points.

Some industry observers think that the second screen providers face a big challenge when it comes to engaging consumers. “We conducted research using a sample of 9,000 people across nine different markets and found that many viewers are using a second screen device when watching a television – some of them quite regularly,” notes Drury. “However, they are using the second screen in a variety of ways. One type of activity is becoming known in the industry as ‘stacking’ – layering a new media experience on top of television viewing, but which has nothing to do with the TV program.”

Ovum found the most common forms of stacking behaviour involved browsing the web; accessing specialist sites; social networking, where the commentary is not about what’s on the TV screen, and browsing retail sites like Amazon. When it comes to second screen behaviour related to the TV screen, the most common form of activity is finding out more information about a TV show and, in particular, news and sports programs.

Some viewers are using social networks to comment about the program they’re watching, and the third most popular activity is Googling more information about a TV advertisement. Drury thinks that companion app makers, “Have to drive engagement, whether it’s by providing more content that’s related to what’s on the screen; providing relevant contextual information, offering some form of social engagement, or even offering a reward in exchange for logging in and using the application.”

A potential benefit for second screen providers is that they can acquire data related to individuals rather than households or large demographic groups, as is the case with conventional TV ratings systems, such as the People Meters used by Nielsen in the US and Barb (British Audience Research Bureau) in the UK. Barb, for example uses a sample of around 5000 households to cover the UK’s 26 million households. “If just one percent of people watching the X-Factor are Tweeting, that sample is going to be considerably higher than Barb’s and provide a huge amount of information – their demographic, what they are watching, what they’re saying, and their attitude to the show,” says Drury. “It’s down to the individual level and the data is captured instantly.” In the US, Nielsen has joined forces with Facebook to launch Online Campaign Ratings, a system for tracking and measuring online ads.

David Berkowitz says, “There’s a lot of money to be made from second screening. First, networks can use this as a way to add value or increase revenues for media buys. Meanwhile, advertisers can work with a range of second screen technologies to find ways to make their TV spots work harder for them and bring in more revenue.” Companies such as Shazam and Second ScreenNetworks are chasing the second screen ads market and offering technologies that enable brands and advertisers to take advantage of the new medium. The online world has taken away a lot of advertising revenue from the print world, so could second screen have the same impact on the first screen?

Berkowitz thinks not. “Print publishers got hit hard because online was a replacement for print; most of the time, online consumption happens at the expense of print publications. With TV, it’s symbiotic. Great TV gets people chatting, and it’s growing almost beyond comprehension. Just look at the Grammy Awards – Blue Fin Labs reported social media comments rose nearly 2,300% over last year’s telecast. In light of that, second screen experiences should make TV ads even more valuable, and it will probably lead to increased spending on TV.”

Drury agrees: “You have to remember that the killer application for television is television. We like to get home, kick off our shoes and watch the screen. TV is mainly a passive experience. The reason why companion screen devices have been so successful is because they are personal, whereas television is communal. This is what makes TV great for brand engagement.”

So who will make money from second screen?

In Drury’s words, “It’s all up for grabs. You have to remember that when you’re watching a TV program, you’re effectively looking at three brands – the program, the channel and the TV platform. So who do you aim your app at? At present, almost no one is selling second screen rights, except in kids’ TV. It’s the Wild West; no one knows the outcome to this.” For this reason, Drury says second screen app developers should create apps that are flexible enough to cater for multiple sales channels, and multiple commercial models.

“There will be a lot of winners out there,” says Berkowitz, “TV networks will get better at monetizing this. Brands will find ways to engage with consumers in ways they only dreamed about 10 or 20 years ago. Content creators will probably use it more to drive loyalty and engagement with their programs rather than as a pure money maker.” And other players could win too, he adds.

“A number of app developers will probably get acquired for a decent price. TV and set-top box manufacturers will take a while to figure out what interactive content works best on the first screen, but in a few years they’ll get there. The major social networks like Facebook and Twitter are in an interesting position, as so much activity on their sites happens in direct relation to what’s airing on television, so it will be very interesting to see what they build or buy to fully tap into second screening.”

www.actv8.me
www.connectv.com
www.getglue.com
www.gomiso.com
www.intonow.com
www.secondscreen.com
www.shazam.com
www.tvappagency.com
www.viggle.com
www.zeebox.com

The first panel was about how people engage with entertainment both in and out of the home, and how technology developments impacting how consumers consume content. The panel all had different ways of watching video: streaming, renting and then buying, the cinema and then disc, and all agreed that it could sometimes depend on cost and where they were. When Pearcey asked if anyone had heard of digital copy, the responses were varied but, surprisingly, given the range of viewing habits, only two people thought they knew what it was: “I think I know what it is and downloaded it once but it is still sitting on my iPod,” said one panellist, “but I prefer to rent the disc. I still need to see something physical; if I can’t see it, it doesn’t exist.”

When the concept was explained more fully, many of the other panellists conceded that they may have bought discs with a digital copy but would have assumed the paper with the code on it was just an insert and would have thrown it out.

What did seem apparent was that most people still bought discs at some point and when Kramer queried, “What would you think about having a digital copy of the disc’s content when you buy it,” the general consensus was that it would be a good idea but not if it was just on a “random bit of paper”. The concept of double and triple play was also a new one and again, when it was explained, panellists were cautiously in favour of it though, as one said, “I don’t see the point of two discs but a digital copy, yes, that sounds good.”

Blu-ray took a bit of a beating: only one panellist had a Blu-ray player; another said that DVD quality was good enough for him, while a third said that she thought the discs were too expensive. DVDs were cheap enough to still be desirable as an impulse buy, though newer releases on disc were also considered good for gifting.

The somewhat beleaguered HMV (“They’re going bust, aren’t they?” was the comment from a consumer panellist the following day) was held up as a good place to go browsing and shopping for gifts, even if supermarkets were better value. “HMV is like YouTube,” was one view. “You end up in different places and wonder how you get there. I like the interactivity and the fact that you can see things playing. Streaming just a list on the internet.”

UltraViolet took a slight pounding when it was first brought up, as only one person had ‘sort of’ heard of it. Most panellists were uncertain about the cloud, and those who knew anything about it assumed it was an ‘Apple thing’. When it was described in more detail to them and Kramer asked what it would take to get them to use it, price was an important consideration and few thought they should be expected to pay a premium for UV-enabled disc. Another home entertainment development that left this particular panel underwhelmed was 3D: most people were not keen on it and felt that they would only really take to it if it was glasses-free.

Surprisingly, after all that, when asked, “In three years how will you be watching video at home?” virtually everyone thought they would be watching at least some content on discs but also, one panellist remarked, “Probably something that’s not out there yet. The industry moves so fast it’s really hard to keep up. Blu-ray is all very well but devices are out of date so soon. Eventually you have to live with the idea that you have to cap it and can’t always have latest technology.” But people will still have discs, he agreed.

And, said another one, “You can’t miss what you never had. Technology can be too clever for its own good: what’s the good of an iPad with screen resolution too high for human eye to see?” Improve by all means rather than change, and even then improve only to a level the consumers can understand, fellow panellists agreed.

More on the PEVE event and the consumer panels will be in our May issue of D2D, available soon in print and online.

In the service’s favour: registering for a Vudu account (an essential part of the service) was swift; Wal-Mart employees were quickly and easily able to verify a title’s availability; and the content was quickly available on his Vudu account. Against it: “filling out the form with what movies we were converting. Hopefully, this process can be streamlined with a consumer entering all the information online at home ahead of coming into an actual store.”

There are still challenges, however, Greenfield pointed out, still concerned about pricing, convenience, and content availability. Conversion from SD is one thing, he believes, but for consumers used to ripping music, paying for the digital content on a purchased discs “is not intuitive, even at $2 per disc”. For free, Wal-Mart would get customers into stores to sign up for a Vudu account, and the studios would get consumers more aware of and excited by digital lockers, which “might encourage digital ownership (buying digital remains a niche business for studios today”.

Availability of titles is also a drawback: Fox is still adopting something of a wait and see policy on UltraViolet in general, and Greenfield pointed to the 600-pound gorilla of Disney, which shows no sign of joining in.

The discovery of a short film dating from 1901, in this, the Bicentenary year celebrating the birth of Charles Dickens, is a timely and important discovery. It is believed to be the first ever filmed adaptation depicting a character from one of Dickens’ works.

The intriguing story of the find also highlights an early piece of technology, which was the home cinema experience of its day, associated with the film. Bryony Dixon, Curator for Silent Film at the BFI National Film Archives, found a trail that led to the film the day after attending a special screening event as part of a three-month season commemorating the work of Charles Dickens.

Much discussion of the author’s work followed the screening that evening. With Dickens very much to the forefront of her mind Bryony was researching a completely different topic the next day looking through early printed film catalogues searching for films on China. Bryony explains: “My eye just lighted on a listing for The Death of Poor Joe (spelt with an ‘e’ in the catalogue) and I thought, Aha! ‘Poor Jo’ is the famous Dickens character from Bleak House. So I decided to see if we held anything in the archive that matched this old film listing in the catalogue.”

When Bryony entered the title in the database what actually came up was a reel of film that had been logged under the main title of Man meets Ragged Boy, but luckily it also referenced an alternate title: The Death of Poor Joe.

The addition of this AKA (also known as) information had been linked to the film only in recent years with the merging of technical and filmographic databases to provide one that listed both information about films as cultural objects and film content descriptions. This descriptive information matched the cataloguing of the early film on the merging of the databases. However, the significance could have remained hidden had Bryony not been searching an old printed catalogue, which prompted her interrogation of the database information that cross-referenced the additional title.

So the missing link came from the listing of the film in a catalogue issued by the Warwick trading company, based in Brighton, which was a very important company in the early days of film. It traded independent films as well as its own fictional and factual film, and so listed titles by many independent producers selling their films.

The film had originally come into the archive in the 1950s from a donor who lived in Brighton and who had deposited it along with about a dozen other reels as examples of early film. These were short films from the turn of the century and, in some cases, just a few shots of various subjects so the cans were variously labelled, many without actual titles.

This meant the cataloguers had very little to go on in the way of markings and in some cases just described what they saw on the film. Hence the labelling of Man meets Ragged Boy which says relatively little and would not throw up a connection to Dickens on a database search today. So, though safely on the shelves of the BFI Archive, the true identity of this film was hidden until this year.

EARLY CAMCORDERS

Among the other reels from the same Brighton donor were some of unusual film gauge (17.5mm) made for the Biokam – a combined camera/projector for the amateur market manufactured by the Warwick trading company between 1899 and March 1901. It is thought these reels were reductions made from 35mm films and given away with the Biokam to demonstrate the device and entertain guests in wealthy drawing rooms of the day.

You could call it the camcorder of its day! We know that GA Smith, an early film pioneer based in Brighton, was working with Warwick on the technical side and on the Biokam development. He was in charge of processing of films and the equipment to reduce film from 35mm to the 17.5mm gauge.

As the Warwick trading company catalogue mentions the film The Death of Poor Joe, this gives more clues as to the age and provenance of the film and prompted Bryony to call up the reel from the vaults to view. She takes up the story:

“I ordered it up as there are some things that can only be identified by actually viewing the material. Being a curator you watch a lot of film and to further identify this work it was necessary to actually recognize the characters in the film. So knowing that it was produced by Warwick didn’t tell me who had made the film, as in the catalogue only the title was listed.

“When I screened it I instantly recognized the two actors in the film; these were Tom Green and Laura Bayley (wife of GA Smith). So poor Joe is played by a girl, as it is a pantomime coming from that theatrical tradition. There was a painted backdrop of a churchyard, and we are outdoors as you can see the wind blowing the backdrop and there are real trees hanging over it. Joe is in rags and sweeping, so we can identify him as the crossing sweeper character that Dickens created in Bleak House. It is a snippet of a stage version of the story so does not follow events exactly as in the book but it is identifiable as the character from Dickens’ novel.

“The film prop of the broom matches the illustrations in the book though to clearly show this is poor Jo (the crossing sweeper). It was common for women to play male roles in the pantomime tradition and Laura Bayley was quite a famous actress of her time. So she was filmed regularly by her husband in his films and most likely was the source of the costumes and the backdrop which he had borrowed to make his film, probably from a production his wife had been in on stage in Brighton.”

It is thought that the film was shot by Smith on 35mm and that he made reductions of the film to 17.5mm to demonstrate the Biokam invention that he had been working on at Warwick. The identification of the actors, leading to confirmation of the filmmaker and the link to the release of the Biokam helps to date the film. Another clue is that the film was shot outdoors, as it is known that Smith built his studio during 1900-1901.

Bryony realized that pinning down the date of the film was key and turned to GA Smith expert Frank Gray in Brighton to confirm these facts and dates. The conclusion is that the latest the film could have been shot was before March 1901. Now, with its original title restored, we can see it for what it is – the oldest surviving film version of a work by Charles Dickens, predating RW Paul’s Scrooge, of Marley’s Ghost (1901) by several months at least.

The timeframe from Bryony beginning her research, through identification and authentication to TeleCine transfer and digital upload to YouTube was just one week. As the discovery came in the middle of the ‘Dickens on Screen’ season there was time to make it part of the celebratory events. This meant that it could be included in a planned screening of early Dickens films by Michael Eaton and uploaded to YouTube for public viewing.

On asking Bryony about the impact of finding the film and what this meant to her she responded: “Recognizing the actors in the film really became the ‘eureka’ moment for me and working out where it was made and by whom was really very exciting – really more for the sake of my colleagues who were putting together the Dickens on Screen season and what it would mean to them.”

The original 35mm film is now held in the BFI’s deep cold store at minus four degrees Celsius to preserve it for future generations and a viewing copy is held in acetate vaults in addition to the tape and MPEG-4 file protection copies.

The film itself is just one minute long and depicts the character Poor Jo, the crossing sweeper from Bleak House, seen at night against a churchyard wall, freezing with his broom in the winter snow. A passing watchman catches Jo as he falls to the ground. But he is too late, and can only comfort the dying boy, shining his lamp upon Jo’s face and mumbling a prayer. Jo puts his hands together and, taking the lamp for heavenly light, he dies.

The importance of the find to Dickens historians, film scholars and archivists has created much excitement within the media and the academic world.

The film can be viewed on the BFI Film channel on YouTube: http://www.youtube.com/user/BFIfilms/featured

Still from the film courtesy of the BFI National Archive.

“In today’s changing world of emerging and converging technologies the value of the content and importance of managing, tracking and preserving our assets becomes all the more critical.

“The audiences today expect releases on Blu-ray in HD and for Digital Cinema to be of the highest quality. The digital tools now available can create a superb viewer experience and there is much to explore on the topics of restoration and preservation. With 3D capture, file based cameras and content now being ‘born digital’ new methods in future-proofing these assets are paramount.”

Maxwell's features so far include insider experience of the restoration of movie classics including African Queen, A Night to Remember, and The Life and Death of Colonel Blimp. She has recently also written an article about the discovery of a film known to be the first movie to feature a Dickens character, which will be appearing online and in the May issue of D2D.

“We are delighted to have Fiona on board to share her wealth of knowledge and experience in the world of asset management, particularly her insights into the restoration of some of the movie world’s shining stars,” added D2D editor Elizabeth Toppin. “With so many studio milestones, and with the increasing number of catalogue titles being released on Blu-ray, the field of restoration is one that is sure to be of great interest to our readers.”

Fiona Maxwell has worked across many different media genres including home entertainment, theatrical film and television distribution, film restoration, digital remastering, post production, archive and digital asset management. She has worked for the Rank organization, the PolyGram group of companies, CIC, Carlton and Granada International, and was with ITV for over 12 years.

Fiona is a regular speaker at technical conferences and international film and television festivals, focusing on new technologies, digital workflows, film restoration, preservation and funding, and has published articles on her specialist subjects of restoration, preservation and re-mastering, including her regular column for D2D. As Director of Operations for ITV Studios Global Entertainment, Fiona’s international distribution role covered broadcast, theatrical cinema release and, for the home entertainment market, DVD, Blu-ray and VOD, with responsibility for one of Europe’s largest media archives of over 400,000 elements, and managing the supply chain and route to market for worldwide exploitation in all media. Now an independent media management consultant,

Fiona is deputy chair of the BAFTA Archive steering committee and an active member of the BFI, AMIA, and WFTV. Her collaboration with the Marin Scorsese’s Film Foundation, the David Lean Foundation and the BFI has won awards and accolades within the industry. Some of the highlights of her career have been working with the David Lean Foundation to restore his films in conjunction with the BFI; appearing on BBC Television News speaking about the restoration of John Huston’s African Queen; introducing A Night To Remember on stage at the Cannes Film Festival; accepting a joint award at the Focal Awards in London with Martin Scorsese for the restoration of The Red Shoes.

For more information contact editorial@digital2disc.com

Editors’ notes: D2D is the only globally distributed business-to-business magazine dealing with the business and technology of content delivery, from CDs, Blu-rays and other physical media to downloading and streaming of content, and the ways in which content (music, video, games, software) can be monetized across the various delivery methods.

Content providers, replicators, packaging companies, and trucking companies all need to analyze supply chain instead of just going after every question or problem that pops up. If you manage on a case by case scenario, “The only thing you are doing is firefighting,” says Meindert Boorsma, Partner, Intelligence For Business (i4b), a management consultancy bureau that offers sustainability services in the value chain. A successful business is about return on investment (ROI), but to accomplish that, a plan must be in place. It’s confusing to have a procurement guy, a sales guy, a supply chain guy, and an operations guy, all making decisions in a box.

According to analysts, replicators and packaging experts, the media industry has improved in terms of consolidating the supply chain, but there is still room for improvement. To be profitable, manufacturers have had to combine all processes into their business. The definition of a ‘one stop shop’ has changed over the years, sources say.

ONE STOP SHOPS

Bringing down component, manufacturing, and shipping costs; cutting turn-times; and eliminating returns are key elements of the one stop shop. Haitham Wahab, CFO of replicator CMI Media Management explains, “We have a large contingent of customers that are shipping quite a lot of DVDs. While we are consolidating our supply chains, those customers are also tightening their own supply chains. Rather than using three different houses for replication through to distribution, many of our customers are doing everything with us because we offer the back end.”

According to Wahab, the days when manufacturers wouldn’t look at orders under 5000 units are long gone. No reason for that philosophy exists any more. With more competition on the retail shelf, television on demand and digital downloading, there is little reason to refuse any disc order. Manufacturers are learning to deal with smaller orders which, at one time, were too tedious, but with optimization of manufacturing and distribution, small orders are profitable.

In the past, customers were ‘shoe-boxed’, says Joel Maxey, Senior Director of Operations, Disc Makers. “It was more cost-effective in the past to make at least 100,000 copies of a title. Customers were forced to buy more than they needed because the price was better. Now, we are able to offer exactly what you need. Turn-times can be as quick as one day. That is helping people keeping their inventories lower. And, if content needs to change, they are not stuck with old discs they have to throw away because they were cheaper to buy.”

With fewer companies manufacturing discs, pricing scenarios have changed and customers are paying more for service. “When there was over-capacity in disc manufacturing, pricing was king, but we are seeing signs of that calming down now that a lot of capacity has been taken out of the market,” Wahab explains. Customers will pay for service.

In order to make the small orders profitable, Frank Salvaggio, General Manager, packaging firm Ross-Ellis, says, “We increase efficiency and productivity by tweaking our methods. With smaller runs, the set-up times on the equipment become an even more significant component of the cost. We use production methods like Kaizen to take the non value added component out of some of these processes so that it is faster and costs less and therefore allows us to deliver earlier.”

Development of a business model for MOD is going slowly, but it is definitely moving forward, believes Steve Brown, CEO, at manufacturing company, Cinram. “The problem with MOD is that the model is not totally baked yet.” It has positives and negatives. While MOD is a great solution to get rid of inventory, it negatively impacts impulse buys and that hurts disc sales, he says. However, Cinram is doing some MOD in Europe and is looking at starting up the service in North America as well.

MOD is happening particularly for the older titles where stock holding is expensive says Jim Bottoms, Director, Futuresource Consulting. “There is quite a strong increase in interest, and I know of two companies (that have to remain unnamed right now) that are developing very focused on-demand strategies.”

FORECASTING AND RETURNS

Order forecasting from the studios is an area that still needs work in the supply chain. “The industry still works on a model of over-supply and returns, which means that product is manufactured, shipped, returned, and then scrapped,” says Bottoms. “All this product needs to be manufactured, handled, processed, shipped and stored.” It’s certainly not the most efficient method.

The problem with forecasting is human error. According to Wahab, “Forecasting is flawed and tends to be more optimistic than it should be. As a replicator, having better software that will offer better real-time information is key. Knowing how much of a client’s product is on the shelf allows a replicator to give customers a heads up when it is time to reorder. However, reordering has to be the customer’s decision. There are delicate points of interaction, and a fine line of how to navigate the situation.”

Salvaggio agrees that manufacturers can help content providers achiever lower inventories. “It’s a difficult process of knowing how much inventory to keep. We supply to the labels, but we have to work with our own materials suppliers so that we have whatever we need to get orders out quickly.”

Increased emphasis on IT and systems will provide better, faster, more detailed management information to improve planning and help reduce waste. In terms of consulting, Bottoms says the Futuresource Systems activity has seen a surge in interest from companies across the entertainment spectrum looking to improve their management information systems to give better data on account and title profitability, and improved detail on stock levels and product movement.

DISTRIBUTION

Another area of business where the old rule books have been thrown out is distribution, according to Bottoms. “Studios and distributors look at every avenue for reducing costs and improving efficiency. A taboo for so long – shared distribution – is back on the table in many markets. The days of one box with Warner product in it and a separate one containing Fox product will soon be a thing of the past in many markets.”

In 2011, there was a long list of company announcements about combining local offices: Universal and Paramount; Sony and Fox; Universal and Sony. Bottoms thinks it is almost certain that plenty more such initiatives will be announced this year.

Replicators are helping combined distribution as well. Cinram’s Brown explains their involvement with UK retailer, Morrisons: “We category manage. We bring all of the studios together and put them all in one box and deliver. Not only studios, but record labels and games customers as well. Rather than the retailer receiving products in separate boxes, there is one delivery, one invoice, etc.” It’s a much more efficient way of doing things.

In the US, home video companies have shared returns for a while. Bottoms comments: “In video, retailers have to deal with ten different suppliers whereas with milk it is treated as a single product no matter what the company. This is particularly a concern when it comes to returns handling. Retailers say, ‘We don’t want to go through the pile of discs to separate studios and replicators.’ In the US video returns handling has been going on by Technicolor.”

While the US has made a few strides, returns are still an issue in Europe. “In the case of Disney product, for example, returns in the UK are sent back to Poland to be destroyed,” says Bottoms. Companies are looking at local destruction more often now. Why not just discount the product to sell? “That can open the door for more problems. For example, how many units has Walmart sold before cutting the price by 30%? Managing all of that is time consuming.”

MULTIPLE SKUS

“Physical product is not competing with download, it is competing for space in the retail stores!” according to Olivier Durand, Managing Director at supply chain development company, Emthelo. Issues are complex on the disc marketing side as well with studios battling the retail market for shelf space. To entice potential customers, there are more packaging SKUs than ever on both new and older product. “Too many SKUs may be a problem in terms of customer confusion and comparison shopping,” notes Salvaggio.

Durand agrees, from a consumer point of view, too many SKUs are confusing. “It may look like a good idea from a label point of view, but we are overcomplicating the shopping experience and customers may download out of pure frustration.”

Cinram’s Brown has been particularly outspoken about getting a handle on SKUs. In speaking to consumers, Cinram’s marketing group found that often people didn’t buy the Blu-ray combo discs because they didn’t “stop to read the package to see that there was a DVD in there as well. The sooner the industry standardizes SKUs, the sooner people know exactly what they are buying.” More than two SKUs for the same title, because it has different graphics, is difficult to deal with not only from a consumer perspective but for retail returns.

From Disc Makers’ perspective Maxey says multiple SKUs continue to be the norm right now, so they have learned to deal with it. “We have made some pretty flexible packaging lines that allow us to place people at different spots so that they can stick in a bubble gum card for example. On the positive side, extra features on different boxes allow consumers to see the value of more in the box.”

TRANSPORTATION AND WASTE

Increasing oil prices are also playing a part in the changing supply chain. Many of those we spoke to believe that content providers as well as manufacturers and packagers want to do as much work as they can locally. Whatever money they may save manufacturing or buying product overseas is now spent on shipping.

Another problem doing work far from home has to do with turn-times. As they are getting shorter and shorter, it makes more sense to do the work locally. “We have the CD plant, the print shop, the packaging, direct mail. Product only travels the 140,000 square feet of our plant. That not only saves on shipping costs, but it also saves time!” says Maxey.

If localized business is not possible, there are other ways to save money, says Durand. “It is worthwhile thinking about the size of the product.” Jewel boxes are a definite shipping culprit, he believes. “The disc market in Europe is about 400 to 500 million discs. That’s about 40 to 50 million tons of product moving across Europe. Most of that weight is packaging. A jewel box is 60 grams of polystyrene. Not only is that expensive to ship, but using something less bulky allows you to put more product on the retail shelf.”

Brown agrees: “Look at the logistics companies and the freight companies. They are picking up the graphics and boxes then delivering them to the replicator. Then they pick up the finished units and deliver them to retail. Later, they pick up the returns and deliver them back. Looking at carbon footprint, we have to drive out that waste in the trucking system to get those logistics worldwide down. I am confident that the marketplace is seeing that and waste will be driven out.”

Boorsma adds that, of course, a more efficient supply chain is tied into sustainability issues. “I am sure that sustainable companies with the best carbon footprint have the best ROI. There is a lot of CO2 used to manufacture a disc. The fewer discs you throw away, the less CO2 there is in the garbage. If you look at the components used in your manufacturing you can come up with ways to improve the supply chain and efficiencies.”

Admittedly, there may be a long way to go before the disc industry can claim complete supply chain efficiency but, as the old saying goes, ‘Necessity is the mother of invention.’ New ways of thinking can make those involved in the industry more profitable.

www.cinemagnetics.com
www.cinram.com
www.discmakers.com
www.emthelo.com
www.i4b.nl
www.futuresource-consulting.com
www.ross-ellis.com

• VOD grew overall by more than 1 billion transactions from 7.8 billion last year to 8.8 billion in 2011.
• 77% of those transactions (6.8 billion) were for free content, providing significant opportunity for revenue growth over the coming years as ad insertion technology becomes commonplace.
• Each month, 33.8 million STBs accessed free content.
• Within FOD, major program viewership is now dominant.  The TV Entertainment category, which includes programming from the top linear broadcast and cable networks, is now the top FOD category by transactions, up from #3 last year.

There is a dangerously thin line between protected content and frustrated consumers, and Barry Fox wonders if video initiatives will be the equivalent of the short-lived and unsuccessful SDMI.

Music networking is a natural progression from music downloading. A smartphone or tablet becomes the prime source of music round the home as well as on the move. Those who don’t download can rip CDs to memory, or a hard disk server, and get the same result.

Of course many music-lovers – self included – still prefer the physical feel of a disc and printed liner notes to ethereal digital but, whether we like it or not, ‘serving’ home audio is increasingly popular. And it’s easy to do because CDs and most downloads are not copy-protected, and national laws either allow music copying for personal use, or turn a blind eye.

Movie material is, however, wrapped in copy protection that usually prevents, or at least hinders and stigmatizes, transfer to a server. US and European laws strenuously prohibit circumvention of the protection. Hence the pantomime procedures adopted by some companies that sell video networking devices. The server leaves the factory legally ‘clean’, with no way to rip a movie disc to its hard drive. But the manufacturer tells its dealers how to tell their customers how to install and activate software which defeats video copy protection. So only the end user is breaking the law.

Attempts at legitimizing this process with ‘managed copying’ have so far failed. The Blu-Ray Disc Association and Advanced Access Content System Licensing Administrator, LLC (AACS LA) (the consortium formed in 2004 by Disney, Intel, Microsoft, Panasonic, Warner Bros, IBM, Toshiba and Sony) have been promising Managed Copy provisions since before BD was launched. Supposedly a standard has been agreed but new hardware will be needed to handle the protection processing. The FAQ information on the torpid AACS website is still “coming soon”. The latest AACS press release is dated 2007.  (http://www.aacsla.com/faq/)

Since 2001 Californian company Kaleidescape has been developing and offering a system that delivers managed copies without defeating copy protection; a hard disk server makes digital copies of DVDs and Blu-ray Discs, with their copy protection still intact. But the movie industry objected and cases have been in and out of courts since 2007. The latest ruling, from a four-week trial in the California Superior Court, went against Kaleidascape. But the company is appealing, again, and this will take at least another year. (www.kaleidescape.com)

Now we have the promise of Project Phenix [for more information on the announcment, see our story here], a new joint venture between Fox, Warner, SanDisk, Western Digital and the newly formed Secure Content Storage Association. The objective is clear; to let consumers legitimately store 1080p copies of Blu-ray Discs, DVDs and downloads on home or portable hard drives and memory devices. The video material can then be networked round the home and remotely accessed online. But how this will be achieved is far from clear. Try Googling “Phenix” and “Secure Content Storage Association” for hard fact information and you will very quickly become very frustrated.

The technical and legal barriers to reaching industry-wide agreement could take years to flatten and the SCSA’s promise to make Phenix “work with the industry-backed UltraViolet ecosystem” surely adds to challenge. As the BD boys have found to their cost, setting a standard is only the beginning; getting it into hardware and consumers’ homes is the real challenge.

Because our industry has a notoriously short memory, it pays here to remember SDMI, which can loosely be described as the audio equivalent of Phenix. It failed miserably with far-reaching consequences.

The Secure Digital Musical Initiative was formed in late 1998, to develop a system that would replace unprotected MP3 for music recording and distribution. The aim was to “protect the playing, storing, and distributing of digital music such that a new market for digital music may emerge.”

More than two hundred companies in the IT, consumer electronics, telecoms and security industries spent a large fortune on research and on air fares and hotel bills as they met in exotic locations round the world try to hammer out a music control and protection standard. Their target was something – indeed anything – other than MP3.

It all sounded relatively simple on paper. SDMI protection would inaudibly watermark the music, in a way that was sufficiently robust to withstand internet distribution and analogue copying, and standardized hardware would look for the watermark and play only music with a watermark that permitted play. The watermark had to be undetectable and unremovable as well as inaudible. The top brains in technology hammered away at the task and US company Verance (better known now for its work with Cinavia for movie and Blu-ray audio watermarking) developed an approved system.

In September 2000 the SDMI threw their agreed solution open to challenge by posting protected samples and inviting anyone interested to try and hack the protection. A group led by Edward Felten of Princeton University quickly removed the watermark. Much unseemly squabbling ensued and when Felten said he would explain what he had done in an academic paper, the SDMI, the Recording Industry Association of America (RIAA), and Verance threatened legal action.

Felten withdrew his planned seminar presentation, but revealed how he had been threatened and told how he had deliberately rejected the offer of prize money so that he was free to publish. After more squabbling, denials, backtracking and legal manoeuvring, Felten finally published his findings in 2001. In the meantime the respected president of the SDMI, Leonardo Chiariglione, had walked away. The SDMI formally folded in May 2001 and was soon forgotten.

With the record industry in disarray over SDMI, and still vehemently anti-MP3, Apple steamed in with the iTunes online music store in 2003. iTunes kept the record companies happy by using AAC coding and proprietary FairPlay DRM. But Apple refused to license FairPlay to anyone else.

After several years of headless chicken behaviour the record companies finally saw that the only way to compete with Apple was to start doing the very thing they had so long resisted and the very reason for SDMI’s existence; they agreed to the sale of music downloads in MP3 without protection and DRM. So audio networking is unobstructed.

Meanwhile, the expiry of the master patents on CD left first Macrovision and then others free to tinker with the CD standard and add CD copy protection. This could have hindered audio networking. But Sony BMG took things much further – and far too far – with the infamous XCP CD protection system in 2005.  

XCP left Sony hit by claims and court cases after outsiders discovered what Sony either did not know or wanted to keep secret; XCP put ‘rootkit’ software on consumers’ PCs, leaving them wide open to virus infection from the internet. It cost Sony at least $5 million in settlements for consumers’ computers damaged by XCP.

The bottom lines are that the acceptance of unprotected MP3 and the demise of CD copy protection have nurtured the growth of legal (or quasi-legal) audio networking. It is now inevitable that one way or another, legal video/movie networking will grow too. If UltraViolet and Phenix prove to be another SDMI, Apple will again be the winner.

There was a serious message to Kaye’s presentation: the vast and rapid changes of the video delivery landscape and the need for the industry to ensure that the consumer is not left confused. “There is a consumer perception that technology is moving too fast,” he said, “That's our fault, and we have to do a better job of framing what the changes are.”

Kaye presented a number of slides and statistics to highlight the changes, and how the content community should keep up. In a ‘then and now’ video viewing slide (“I have to update this regularly”), Netflix subscribers went from 2.4 million to 24.4 million between 2004 and 2011; in the same time period YouTube went from nothing to 5 billion views per day globally, Facebook went from 1 million to 800 million users, and Twitter went from nothing to over 200 million registered users globally. The technology has moved no less rapidly, including tablets going from nothing to over 55 million users globally, Blu-ray players coming out of nowhere to being in over 34 million households, smartphones at nearly 100 million global owners, and HDTVs now in 80 million households from 5 million in 2004.

“At Fox we do a ton of consumer research,” he said. “We don't always like what we hear but we have to listen and adjust our business models accordingly.”

There was good news: overall home entertainment spending was up in Q4 last year from the first time in a while and Kaye expected it to be up in Q1 of this year as well. “That goes for physical too, not just overall,” Kaye pointed out, “and the Blu-ray format has been a success, despite what pundits say. Blu-ray growth shows that consumers are convinced that this is the format and they can start to convert their DVDs.”

One clear message, he added, is: “When you add in alternative ways of viewing home entertainment, it is very consistent over time. Once the economic crisis is over we can rebuild sell-through.”

Ownership has its advantages, which include more content and more rights; however, Kaye added, and even by 2015 digital sell-through will account for only 12% of video, though the story is very different for games, music, and books, which will all see digital take over 50% of sell-through.

We’ll be providing more on this other presentations from PEVE online and in the next printed issue of D2D.

• Mixed service bundles (for example, a locker service, limited interactive service, downloads or ringtones combined with a non-music product such as a mobile phone, consumer electronics device or Internet service)
• Paid locker services (subscription-based locker providing on-demand streaming and downloads)
• Purchased content lockers (a free locker functionally provided to a purchaser of a permanent digital download, ringtone or CD where the music provider and locker have an agreement)
• ‘Limited offerings’ (subscription-based service offering limited genres of music or specialized playlists)
• Music bundles (bundling music products such as CDs, ringtones and permanent digital downloads)

Overall, 13% of all adults watch video from the internet via a connected device at least weekly, compared to 10% last year, and 5% two years ago. Use of connected devices remains skewed towards Netflix subscribers, with 35% of Netflix subscribers watching video from the internet via a connected device weekly, compared to 5% weekly use among all non-Netflix subscribers. “Among all adults, reported time spent watching TV is similar to last year, and there remains little evidence of a significant trend in consumers ‘cutting the cord’ to their multi-channel video services to watch video solely via these emerging services,” said Leichtman.

Video game systems are the key connected devices, with 28% of all households having an internet-connected video game system. Just 4% of all households are connected solely via an Internet-enabled TV set, and Apple TV or Roku set-tops are the only connected devices in 1% of all households.

Other related findings include:

• 16% of all adults watch full length TV shows online at least weekly – compared to 12% last year, and 10% three years ago
• Among all mobile phone owners, 19% watch video on their phones weekly – compared to 15% last year, and 6% three years ago
• 9% of all adults watch video on an iPad/tablet computer weekly – compared to 2% last year
• Overall, 1.6% of households in the sample paid to subscribe to a multi-channel video service in the past year and do not currently subscribe. Yet, just 0.1% of the sample dropped service in the past year, do not plan to subscribe again in the next six months, and say that they don’t subscribe because of Netflix or because they can watch all that they want on the internet or in other ways

www.LeichtmanResearch.com

This recent approval makes Volfoni the first company in the world to have both active and passive 3D technologies approved by Walt Disney Studios: Volfoni's brand of active glasses, EDGE, was approved by Disney in June 2010. The new technology, created using special ‘Surface Switching’ technology, was entirely designed and manufactured in Europe.

“We can now offer our customers the very best in terms of active and passive 3D,” added Jerome Testut, Managing Director of Volfoni's US operations. “Each technology has specific advantages, and because of this, Volfoni will be one of the first companies to offer an active and passive bundle for cinemas. We will be showcasing this at the upcoming CinemaCon in Las Vegas.”

www.volfoni.com

“From digital media to gaming, banking, and the mobile enterprise, app ecosystems continue to expand across new markets and platforms that need to be protected from hackers and other attacks that aim to steal IP and disrupt business models.”

Alanen will lead Arxan’s global business development strategies, including strategic alliances, technology partnerships, major go-to-market and channel relationships, industry ecosystem development, and new strategic growth initiatives. Alanen, who is based out of Arxan’s San Francisco office, will report directly to Dager.

Lord will oversee Arxan’s new growth opportunities and existing operations in the APAC region as vice president of APAC Sales.  He will lead the company’s in-country offices in Japan, as well as regional support for Arxan’s large base of gaming, digital media and enterprise customers and partners.

The appointment of Alanen and Lord further spurs Arxan’s ongoing market focus on the global mobile-driven app economy where software security is a critical component to protect applications and content against sophisticated attacks such as reverse-engineering, tampering, unauthorized access, malware insertion, and intellectual property (IP) theft.

Arxan achieved approximately 100 percent revenue growth in 2011 and doubled its international customer base in both EMEA and APAC markets.

www.arxan.com

The media intelligence provided by Teletrax will allow Twentieth Century Fox Television Distribution to accelerate rights windows for the overseas broadcast of its content, monitor on-air promotions of series, and develop new and more sophisticated business models for the global distribution of its video assets. Under the terms of the agreement, Twentieth Century Fox Television Distribution will utilize Teletrax’s broadcast verification services to monitor telecasts of its feature film and television series product throughout Europe, Australasia and the Middle East.

“Since Teletrax’s inception ten years ago, we’ve prided ourselves on providing the most comprehensive media monitoring reporting in the industry,” said Andy Nobbs, Chief Commercial Officer at Civolution. “Twentieth Century Fox Television Distribution trusting us to provide the most accurate and valuable intelligence on the international use of its content is testament to the power of the service we have worked relentlessly to build.  We feel privileged to help them navigate an otherwise unwieldy international media landscape, and help develop the standards for their global distribution strategy.”

www.civolution.com

“CCI’s mission is to implement the most thoughtful and consumer friendly system to-date for promoting the lawful enjoyment of copyrighted material. Jill’s ability to find solutions that work for content creators, ISPs and their customers will be critical to this task.”

Lesser’s background includes serving as the Deputy Director of Public Policy and Director of the Civic Media Project at People for the American Way (PFAW) and as Senior Vice President for Domestic Public Policy for AOL Time Warner, Inc. She is also a Board Member of the Center for Democracy and Technology.

“I am excited to lead CCI as it begins this constructive effort to reduce and deter online copyright infringement in a way that is centered on education and deterrence, not punishment,” said Lesser. “This unprecedented collaboration demonstrates that when content providers and distributors work together we can protect copyright and empower consumers at the same time.”

CCI was formed in September 2011 as part of a collaborative effort between US content creators in the movie and music industries and leading Internet Service Providers (ISPs) to develop a ground-breaking Copyright Alert System (CAS) and educational framework intended to inform the public about and deter copyright infringement through direct communication with consumers. Lesser will help lead the group in its work with the partner ISPs and content owners to implement the CAS, which is focused on the inadvertent or purposeful unauthorized distribution of copyrighted content through peer-to-peer networks.

www.copyrightinformation.org

The BuddyTV website provides program content and forums for TV fans – the site has ten million visitors. Now, the company has launched the BuddyTV Guide app, which has been downloaded more than 300,000 times. The BuddyTV Guide app ‘learns’ what programs the users like and makes recommendations based on their viewing habits. It can also provide additional content related to a program, such as games, images, quizzes, slideshows and forums. “I believe we are the only second screen app which has an editorial team dedicated to creating content for TV shows,” says Liu. The app can also be used as a universal remote control for selected set-top boxes.

Liu adds that the social aspect of second screen is critical: “We’re providing ways for people to create viewing parties. You can also pull in conversations and see what others are saying about your program, and broadcast comments to your social networks.” BuddyTV’s second screen business model has three strands to it: attracting viewers to premium content, from which is gets a cut of the revenue; tune-in advertising, where TV shows are looking to attract more viewers, and traditional advertising.

“The key to success in second screen will be about attracting as many people as possible to your platform,” says Liu. “This space is highly competitive.”

CATERING FOR THE MASSES 

Zeebox was founded by Anthony Rose (who developed the BBC iPlayer), and Ernesto Schmitt, past president of EMI. Zeebox is an app designed for the iPad and iPhone, and there’s a web version for desktop computers. It’s designed for the UK market, but Zeebox plans to move into other territories. “Despite the internet, live television viewing keeps growing – 85-90% of all viewing is still live TV,” says Rose. Zeebox users can launch the app, sign in with Facebook, and see what their friends are watching. Users can also exchange comments and tweets with friends in real time. The Zeebox app can act like a remote control handset for Smart TVs.

“If content is King, context is its crown," says Google Chairman Eric Schmidt , and Rose thinks that providing real-time information related to the TV content on display is crucial. Zeebox uses automatic content recognition (ACR) technology to sync the device and program, with most of the work being done on the server side. Content related to programs can be selected using Zeetags, small tabs at the side of the second screen that give access to live tweets, Wikipedia pages, music, and other content related to what is happening on the main screen.

Zeebox has attracted more than 300,000 unique users, and the company says that 93% of users stay with the app until the program ends. Pay TV broadcaster Sky has purchased a 10% stake in the company for an undisclosed sum. Showtime is a set of tools that enables broadcasters to create program-specific content available via the Zeebox app, and UK broadcaster Channel 4 has used Showtime to provide interactive content linked to the TV series Desperate Scousewives.

Zeebox was developed to address three main concerns of TV viewers, says Rose. “Viewers told us they wanted three things: more program information; more episodes and the ability to buy things on their TV. People have been self-providing these features via their smartphone – using Google to find information about characters, look for more extra episodes on YouTube and tweet friends. Wouldn’t it be fantastic if there was an app that took the friction out of TV viewing?” The Zeebox main business model consists of receiving income from affiliate merchant fees and second screen advertising.

When the UK television show X Factor launched a dedicated app, it achieved more than one million installs, and enabled users to clap or boo contestants. In the first five weeks, there were more than 100 million claps and boos. Live Talkback, which developed the X Factor app, has also developed its own branded app, Tellybug. The app – designed for the UK digital terrestrial TV service – helps users find the ‘buzz’ around shows on TV. Users can chat or share comments with friends or others watching the same program, and play games related to the program.

Live Talkback CEO Matt Millar says, “For viewers, second screen is a more immersive experience, with the opportunity to influence what is happening on the TV. Watching a concert or sporting event is more fun if you are part of a crowd – so why not create the same experience around a TV show? For marketers and advertisers, there is a new way to engage with the audiences around TV – the opportunity to have a direct interaction with the viewer.”

Millar adds: “Key to creating a compelling second screen app is working to get the buy-in of the TV producers. A second screen experience that doesn't augment the TV show, and doesn't fit in sympathy with the show production isn't a great experience. We work with the producers to produce simple, fun solutions that work with a mass audience – not just the early adopters of new technology.”

Live Talkback has since developed another app for the show Dancing on Ice. “We saw a broad demographic take-up from 16-55 for The X Factor app – it's not exclusively young people,” Millar says. “Different shows appeal to different demographics, and what people will be doing alongside them will differ. With Dancing on Ice we had the challenge of a comparatively older demographic compared with X Factor so we've designed a simpler mechanism for the interaction that mirrors what’s on the TV.”

Dijit has developed an app that the company says turns a smartphone into a personal media assistant with universal remote control (the latter works in conjunction with the Griffin Technology Beacon IR Blaster system) and can control more than 200,000 devices. Users can also access movie guides, content discovery and share comments and ratings on Facebook or Twitter. A personalized program guide can make recommendations based on viewing selections by you and your friends. The Dijit app is compatible with Apple and Android devices, though the service is currently limited to pay TV channels and Netflix in the North America markets.

Jeremy Toeman, Chief Product Officer, Dijit Media, says, “Dijit is focused on creating an amazing consumer experience around using the second screen for discovery and control.  In other words, people want to find stuff to watch, ranging from TV shows to movies to YouTube clips, and they want to easily get that content onto any and all of the devices they own.”

LIMBIC RESONANCE

Mobovivo provides social TV technology to producers, networks and film studios, and has raised $1 million to develop a second screen platform, codenamed Listen Up. The company is also working with Cinram and its subsidiary 1K Studios in the second screen sphere. Trevor Doerksen CEO of Mobovivo, says, “People are using second screen to find information about characters, locations or whatever. They are also using it to communicate – it’s one step up from the water cooler conversation – now we can have that conversation in sync with the program, instead of after it.”

The Listen Up platform will combine communication, information and gaming elements, “It’s about creating technology for storytellers to engage with their audience,” says Doerksen. Mobovivo has also developed what Doerksen says is the first in actor-branded Social TV, designed especially for tablets and smart phones. Reckless Adrian Grenier is an app based around the HBO actor and includes interactive features such as social sharing, scenes from the red carpet, and film screenings. Fans get autographed pictures and keep in touch with Adrian Grenier directly through Twitter.

Starling TV is a social TV platform founded by Declan Caulfield, who has a background in TV, and Kevin Slavin, a games designer. Starling’s service is web-based and Caulfied says this approach keeps things simple. The company also eschews any form of check-in system. “Trying to plan serendipity – ‘I’ll check in and I’ll experience something I didn’t know’ – doesn’t fit in with the TV emotional landscape, which more complex, and where there are multiple characters acting on your psyche,” says Caulfield. Starling believes that limbic resonance has a big impact on how we interact with a medium like television: how other people react to the content we are experiencing affects how we respond to it.

A big challenge for television is to give viewers that sense of audience – the feeling that they are sharing their viewing experience with others. “Television has always tried to bridge that gap,” says Caulfield, “the laughter track for example, is designed to make you feel that you are enjoying the show along with others.” The problem today is that the back channel to live television events is becoming noisier. “The X Factor generates over 9,000 tweets a second, and everything becomes illegible at these volumes. If you respond to a tweet, you are simply writing into a void,” says Caulfield.

Starling has developed technology that can greatly reduce the vast volume of voices in real time, so that a new message is generated every three seconds. “People are comfortable with this rate, and now you can engage with others, and you are not writing into a void,” says Caulfield. “Our smart engine analyses and presents the trending topics and makes that content legible.” Starling has rolled out beta versions of its service, and Caulfield says the company has adopted a B2B business model, with brands, agencies and producers the target market. Like many others in the second screen market,

Caulfield believes that live TV will be the key sector in second screen: “Despite the rise of IPTV, broadcasting remains the most efficient way of reaching a large audience. Most of us still watch live TV,” he says, “even YouTube has started a live TV service.”

www.buddytv.com
www.dijit.com
www.mobovivo.com
www.tellybug.com
www.starling.tv
www.zeebox.com

Oscar-winning director and restoration consultant Martin Scorsese’s sums up his view of the film: “Every time I revisit The Life and Death of Colonel Blimp, it seems to have become more resonant, more moving, more profound. You could say that it’s the epic of an ordinary life. What you retain from this epic is an overpowering sense of warmth, love and friendship, of shared humour and tenderness, and a lasting impression of the most eloquent sadness.”

Set in Germany and England, the story follows the path of a deep and enduring friendship between a German and English Army officer, from their idealistic youth in 1902 through to staid old age, set in 1943 – the year of production. Interwoven into the two mens’ lives is the wonderful portrayal by the beautiful Deborah Kerr, of the eternally youthful recurring incarnations of Colonel Candy’s first love. This is the most wonderful romantic concept of being able to recapture in later life the woman who got away and never ages!

The ageless nature of the film is described by British actor Stephen Fry, who says: “Everything about this film ought to make it seem dated, misjudged and peculiar. In fact the melancholy, humour, tenderness and farce with which the story is told make it one of the greatest films about friendship and the nature of war that I know. We can be grateful that one of the greatest achievements in British film-making made it to the screen, and now returns in all its glory to be discovered by a whole new audience.”

A daring film for its day, it originally faced opposition and caused concern to Winston Churchill that the Colonel Blimp character ridiculed the military, a view that apparently he modified after the release of the film. Michael Powell was advised, however, by government agencies prior to going into production that, “although not banned from making the film, as he lived in a democracy”, if he made the film he would never receive a knighthood. This was a prediction that sadly proved to be accurate.

The film was shot in Technicolor on three strip 35mm using a camera so large it was known affectionately by the crew as ‘the enchanted cottage’. This was also the film that gave the renowned British Cinematographer Jack Cardiff his big break as he came to the notice of the film’s director Michael Powell. There is one marvellous sequence to show the passage of time, achieved by using animal headhunting trophies. These appear on the wall with the sound of a gunshot heralding each arrival, and a plaque showing the location and date of each animal’s demise.

This was very tricky to light, and Jack stayed late on set to film the sequence, unaware that he was being closely observed by Powell. Seeing the skill of Cardiff’s camerawork, the story goes that Powell asked him there and then if he would like to photograph his next picture. This was the enchanting A Matter of Life and Death and, following this, Black Narcissus, for which Jack won an Oscar and a Golden Globe for his Cinematography.

Jack told the story of how Michael Powell had approached him to be his director of photography on the next Powell-Pressburger film and asked, 'Did he enjoy ballet?' Jack responded that he knew nothing about ballet and thought it was for sissies! Powell entreated him to learn about ballet and encouraged his education, the result of course being the beautifully filmed, award-winning Red Shoes.

The restoration process for Blimp began back in 2008 with research on the original elements by the BFI, ITV Studio’s Global Entertainment and Criterion all collaborating with the Academy Film Archive and the Martin Scorsese Film Foundation. The BFI released the original three strip 35mm negatives of the short version from their archives and ITV Global Entertainment loaned their 35mm protection elements from their Perivale Archive. These were all shipped separately to the US for the project to commence. Original prints from the year of release, including a dye transfer print from Martin Scorsese’s personal collection, were used for colour comparisons and reference for the restoration.

Michael Pogorzelski, the director of the Academy Film Archive, supervised the restoration with additional guidance and technical expertise from Schawn Belston, the Vice President of Library and Technical Services for Fox Home Entertainment.

One of the problems of the restoration was that the film had been cut for the original release and even put into chronological order for the US release, rather than depicting the circular story, as it was thought American audiences would be confused.

The reconstruction of the missing sections involved scanning separation masters as well as the original three strip camera negatives. This was carried out both at Reliance MediaWorks and Point 360 in the US. Following the scanning, the digital work was carried out at Reliance in Los Angeles, where the team spent many hours cleaning up dirt and scratches and painstakingly reconstructing the missing elements from the scanned separation masters to bring it back to the full 163-minute version.

The problems they incurred included mould damage on the nitrate camera negatives along with shrinkage, and mis-registration of the three colour strips causing softness and fringing around the images and colour breathing. Kimball Thurston of Reliance’s comments: “There were many challenges restoring The Life and Death of Colonel Blimp. We were dealing with multiple sources of varying quality; some of the original negative had forms of degradation we hadn’t encountered before, and some of the original negative was missing entirely.

“We ended up adding some new tools to our proprietary toolset to address some of the ageing and the damage unique to this film. It was an honour to work on an important piece of British film-making history, and we hope that as a result of the restoration efforts, future generations continue to enjoy and critique this film that appears on many Best 100 Films lists.”

Reliance Media’s Ryan Gomez adds: “We scanned, at 4K, all surviving original negative as well as inter-positive for sections in which an original no longer exists. The sections from the original were compromised due to mould damage and needed to be scanned wet gate. The three- strip film exists in separate cyan, magenta and yellow records, which were scanned individually, then registered digitally.

“In a few cases, the magenta record was so severely damaged that several frames had to be entirely recreated using a combination of image processing and manual paintwork. The most significant example of this fix took place in the ‘beer hall’ scene. Some more typical faults of ageing films were repaired as well. Flicker, instability, dirt and physical damage were all treated digitally with proprietary algorithms designed here at Reliance MediaWorks.”

The digital colour correction was carried out at Warner’s Motion Picture Imaging by Ray Grabowski, the same colourist who worked on the wonderful Red Shoes restoration in 2008. The use of Technicolor is a very important component of the film and the results are quite stunning. John Polito of Audio Mechanics carried out the excellent digital sound restoration, working from three different sources, to match the full length picture version, two 35mm safety track positives and a nitrate track.

The restoration had its world premier in New York in November of last year at the Museum of Modern Art (MOMA) and was introduced by Martin Scorsese and his Oscar-winning editor and widow of Michael Powell, Thelma Schoonmaker. There was also a star-studded UK premiere at the BFI London Southbank, again introduced by Martin Scorsese and Thelma Schoonmaker.

In the audience were the widow and son of the cinematographer Jack Cardiff. The grandsons of Emeric Pressburger – film producer Andrew MacDonald and film director Kevin MacDonald – brought their families along to the screening, and this event was also attended by George Harrison’s widow Olivia, whose Material World Foundation provided the bulk of the funding.

The European premiere took place in February of this year at the Berlin Film Festival introduced to a whole new audience by Thelma Schoonmaker. Kevin MacDonald, who was at the festival to premiere his film Marley, and who had previously proclaimed The Life and Death of Colonel Blimp to be his favourite of his grandfather’s films, also attended the screening.

This was the first time the film had been sub- titled in German and screened theatrically in Berlin. It was gratifying to see a large audience fill the wonderfully refurbished 1960s Kino International Theatre in former East Berlin, and to observe the very warm reception given to the film.

The film will be re-released in cinemas in the UK by Park Circus Films in May and released on DVD and Blu-Ray by ITV Studios Global Entertainment in June.

www.point360.com
www.reliancemediaworks.com

THE LIFE AND DEATH OF COLONEL BLIMP 1943
Written, directed, and produced by Michael Powell and Emeric Pressburger
Production company: Archers Film Productions
Starring Roger Livesey as Clive Candy; Anton Walbrook as Theo Kretschmar- Schuldorff; Deborah Kerr as Edith Hunter; Barbara Wynne; Johnny Cannon
Restoration credits Restored by the Academy Film Archive in association with the BFI, ITV Studios Global Entertainment, and the Film Foundation. 
Funding credits Restoration funding provided by The Material World Charitable Foundation, the Louis B Mayer Foundation, Cinema per Roma Foundation, and The Film Foundation.
Technical credits Digital picture restoration: Reliance MediaWorks Colour by Warner Brothers Picture Imaging, Colourist Ray Grabowski 4K scans: Point 360; Digital audio restoration: Audio Mechanics Consultants
Technical consultants: Michael Pogorzelski and Schawn Belson
Restoration consultants: Martin Scorsese and Thelma Schoonmaker

PIRACY V ANONYMITY

With the rapid growth of e-publishing, it is not surprising that digital media hackers and pirates have turned their attention to the lucrative e-book market. Like their music and video industry counterparts, publishers, retailers and producers of software and e-reading devices have sought ways to safeguard their products and protect the rights of authors. While there has been some discussion regarding the best approaches, nearly all e-books have some form of digital rights management (DRM) protection as well as other content security solutions.

DRM was designed to protect authors and other copyright owners from loss of value or revenue by limiting what can be done with an e- book. Unlike printed books, which you own and are free to share, gift, donate, or sell, an e-book user buys a licence to use the book on one or a limited number of devices. DRM prevents unauthorized usage or distribution to other users or devices. It is considered one of the first lines of defence against piracy. DRM encryptions used by various retailers are designed for their own devices, which is why an e-book purchased through Amazon can only be used on a Kindle, not a Nook, and vice versa.

While most publishers incorporate DRM in their e-book formatting, many are considering whether to keep it on e-books or drop it, as the music industry did five years ago. Although file protection is needed, there is always someone who can hack into or circumvent DRM encryptions to access and illegally obtain digital content. On the other hand, DRM has helped to create and protect merchandize silos that limit consumer choice and the portability of e-books from one platform or device to another.

“At Perseus, we feel we have to require DRM on our e-books,” says Bill Smith, Director of Digital Partner Development for its Constellation Digital Services division. “We provide our client publishers’ title files to re-sellers who agree to incorporate DRM protection. Additional software provides protection and insurance of legitimate end use.” He cites digital services that apply watermarks or DRM to galleys to prevent illegal distribution prior to publishing.

Brian Felsen, President of BookBaby, a leader in the independent e-distribution/e- publishing arena, offers another perspective. “In the e-book conversion experience, we don’t see DRM as being important since our authors’ work is distributed across many diverse platforms. However, DRM is part of our offering. Authors can choose it or not; some of our retail partners require it, and some do not.”

Felsen believes that DRM implementation can be complicated and limiting. If a company puts a lock on its device, it is ultimately not for the benefit of consumers who are looking for accessibility. “If DRM could be incorporated so that the work was protected, yet buyers were not limited to a single platform, it could be a good thing. That said, if anyone is going to steal something, DRM will not stop them. They will figure out a way around it. Besides, for new authors, anonymity is a worse fate than piracy. An open environment with easy consumer access through all platforms would be ideal.”

MORALITY NOT MANAGEMENT

he efficacy of DRM was discussed at January’s Digital Book World Conference in New York where Matteo Berlucchi, CEO of Anobii, addressed attendees. He contends that DRM does not prevent piracy. “You have to educate the public to fight piracy and prosecute criminals in court to achieve real deterrence. That is not to say that we should not protect e-books, but there is a right way. There are protective measures that allow traceability to the e-book’s source, but that do not impede readers who want to access digital content across various devices or share with people they know.”

Berlucchi promotes the concept of Digital Rights Morality, not Management, which emphasizes right choices instead of digital rights. “While DRM is viable in the lending library environment as a way to monitor usage, for other purposes it should be removed. You should put a lighter layer of protection on e-books as a reminder,” he asserts.

One solution is to watermark downloadable e- books with the buyer’s personal information invisibly embedded in the file and visibly appearing on each page (This e-book is the property of...). Another is the licence-based model, similar to computer games where you need a key to unlock a file to access content. There are also cloud-based approaches. “If you are reading on a device through an app, that app content is connected to the cloud,” Berlucchi adds. “Like a cloud-based lending library, a company can provide protected access to the file, which is not downloadable.”

Berlucchi’s proposed model would benefit all stakeholders and provide a truly interoperable solution that fosters competition and innovation. Content producers would be able to monitor the distribution of e-books, while illegal usage could be traced and discouraged.

The establishment of inter-operable standards is one of the goals of the International Digital Publishing Forum (IDPF), a consortium of 300 companies in 30 countries that track digital publishing globally. According to IDPF Executive Director Bill McCoy, “We had hoped that publishers would abandon DRM, but that did not happen. Today 99% of e-books have some DRM, the most popular of which is Adobe Content Server. Companies like Apple and Amazon have their own DRM-based software. There is a debate on whether a strong or weak DRM experience would be best. There are disadvantages either way. Vendors want to make DRM stronger to protect their products; consumers want more accessibility.”

KEEPING UP

In the meantime, companies are exploring other ways to secure e-book content. John Beaton, Senior Product Manager at Irdeto, a global software security firm, contends that there is some confusion between DRM and content security. “DRM is not intended to provide industrial strength content security. It is about managing the rights required by business models and managing the rights of consumers to access digital material through those models.”

Irdeto takes a holistic approach for content protection. In October 2011, the company launched an expansion of its ActiveCloak content security solution to e-Publishing, refining it to work with ePub3 and HTML5 upgrades. ActiveCloak for ePublishing is designed to be both a reactive reduction and proactive prevention tool to deter e- piracy. “The Archilles heel has been the details of implementation for anti-pirating solutions,” says Beaton. “We work with customers to customize and activate ActiveCloak. We make it extremely difficult to hack in, with protection that is invisible to the end user.” Irdeto has the means to mitigate the impact of piracy once it happens.

“There’s no 100% piracy protection solution. If you give hackers and pirates enough time, they will find a way through DRM and other security software, so being able to dynamically update security in the field is a key capability. For content that is leaked, our Irdeto Intelligence solution is designed to identify and take down piracy, removing links from search engines to reduce impact.”

Perseus’ Smith cites other companies, such as Attributor, used by publishers to track illegal e-book activity on websites, blogs and browsers. “Publishers take piracy seriously,” Smith asserts. “Though you can’t presume that 12,000 illegal e- book downloads of a title equate to 12,000 potential purchases, it can still represent significant lost sales. As publishers, we have to send a signal that we value intellectual property.”

Attributor’s Guardian solution provides an end-to-end service that includes ‘web crawlers’ that search the internet to discover and verify illegal users and an integrated process for removal and compliance monitoring.

Because publishers’ core expertise is in creating compelling content, innovative technology is largely in the hands of software and hardware developers. According to Felsen, “Technology is being driven by the big retailers because of their scale. Apple has sold more OS software than anyone, and has in recent months launched iBook 2 for iPad, iBook Author and the new iPad HD tablet. Amazon’s Kindle is supported by its proprietary KF8 software. Baker & Taylor launched its Axis 360 enhanced digital media service with interactive Blio software. Other retailers may not have the money or the core competencies to innovate.”

That’s where a consortium like the IDPF comes in. “Our job is to inform, reward innovation and empower standardization,” says McCoy. “Last year, we introduced an enhanced web-based upgrade of the ePub software, ePub3, that is a good candidate to become the industry standard.”

Overall, record sales have dropped by nearly 50% since 2001. In the UK alone, the market for physical albums dropped 14.4% last year to £484.7 million, say the BPI. And according to a study done by Strategy Analytics, CD sales in the US are expected to drop another 40% in 2012 to $2.7 billion, while virtual digital music sales are expected to hit $2.8 billion in 2012, a 17% increase from 2011.

However, even as overall music sales have mainly decreased in the last decade, the CD remains the paramount format for music in the market-leading LP album category. Of the 309.1 million LP units shipped in the US in 2010, according to the RIAA, 225.8 million or nearly 74% were in the CD format. Furthermore, the number of consumers buying CDs actually increased by 2% in 2011, to 78 million, according to the NPD Group. Indeed, there are nearly twice as many consumers of music CDs as there are of music download services such as Apple iTunes, which celebrates its 10th anniversary in 2013, said Russ Crupnick, SVP of industry analysis at NPD.

“The CD still has a powerful attraction for both older, mainstream consumers who listen in their cars, as well as to superfans who enjoy owning the package and assortment of songs from their favourite artists,” he said in a prepared statement. And the CD did that at a substantially higher margin: those 225.8 million discs sold for an average of nearly $15 each, versus the just-under $10 that 83.1 million digital albums brought in that same year. Nielsen SoundScan, which tracks actual sales, reflects a similar comparison: in 2011, out of a total of 330.6 million albums sold during the year, 223.5 million – or 67.6% – were discs. In the UK, the BPI had an even higher result: 76.1% of all album sales for 2011 were on CDs.

Going forward, the trends are inexorable:worldwideonlinemusic revenue is forecast to reach $6.8 billion in 2012, and grow to $7.7 billion in 2015; consumer spending on physical music is expected to slide from approximately $15 billion in 2010 to about $10 billion in 2015, according to market researcher Gartner. But nonetheless, the putatively terminal CD format is projected to remain the LP sales leader even three years from now, which is nearly a lifetime in the digital age.

THE RISE OF THE INDIE

That surprising robustness has helped keep a smaller but sharper music CD manufacturing business alive. That’s in large part due to the rise of the independent music sector, a collateral phenomenon to the decline of the conventional record label business model.

As music artists found increasingly fewer opportunities to sign with and be funded by major record labels, whose numbers have dwindled from eight in 2000 to three in 2012 as the pending sale of EMI to Universal Music Group is vetted by US and UK regulatory bodies, they have turned to a DIY model, powered by affordable and powerful digital recording systems like Avid’s Pro Tools and Steinberg’s CuBase to create their own recordings. Their masters are then shipped off to a pool of duplicators who have become the inheritors of the major labels’ once- huge manufacturing and distribution infrastructure, one that digital technology has been dismantling for a decade.

“There are fewer major record labels, but more musicians and music than ever,” says Mark Tobolsky, Sales & Marketing Director for National Media Services, a mid-sized media duplicator in the Washington, DC suburb of Front Royal, Virginia, for which music CDs represent as much as 80% of revenues. Tobolsky attributes the traction that his company and several others have gained over the last half decade to improved technology that dovetailed with indie artists’ desires to have their physical product be on a par with that of major labels’.

He cites higher-quality CD-R blank discs, high-resolution digital on-disc printers like the Tapematic 2Print 6- color UV inkjet and the HP Indigo digital offset printing press, and improved packaging materials, such as the Digi-Pak and paper wallets, for letting duplicators more closely approximate what consumers are used to getting in record stores in terms of the look and feel of CDs, and most importantly, to be able to achieve that while doing as close to on-demand as a mass- produced product can be: manufacturers servicing the growing indie artist cohort all report that typical run sizes are now well below 500 per order and can often be as small as 50 discs per title at a time.

Tony Van Veen, CEO of Discmakers, the largest duplicator servicing the independent record market in the US, says that while run sizes have been declining, the actual number of titles has been steadily increasing – Discmakers handled 7,000 titles in 2011 and Van Veen expects that to climb again this year. He says that reflects a reality that’s only become clear in the last few years. “The major labels only put out 4,000 to 5,000 titles a year between all of them, but I’m guessing that there’s around a quarter of a million titles released every year, and most of them don’t get counted,” by SoundScan or the RIAA, he says. That’s a huge market of artists, many of whom sell perhaps a thousand records in a year, if they’re lucky.

It was that paradigm shift that compelled Discmakers several years ago to add short-run duplication capacity to its plant in Pennsauken, New Jersey. Previously, the plant’s M2 and Singulus replication lines (a seventh was added a year ago) were its primary manufacturing systems; short-run orders of 500 units or less were subcontracted to a duplicator in California. The shift to more short-run demand has propelled Discmakers to steadily add its own custom duplication towers, bringing that work in house starting in 2009.

Van Veen also credits advances in duplication and digital printing technologies for the enhanced ability to service the short-run indie cohort. “If it had been possible 10 or even 15 years ago to affordably buy 100 discs at a time, printed, packaged and bar-coded, artists would have done it all along,” he asserts, adding that the 1,000- units minimum that was common a decade ago left many artists with products they couldn’t sell enough of, damping enthusiasm for on-demand manufacturing. In fact, lack of access to short-run manufacturing may have pushed many of them to online distribution only.

“Once it became possible to have a professional-looking end product with inkjet [printing] on the disc and a digitally printed insert for 100 discs at a time, the market really took off.”

OTHER OPPORTUNITIES

The CD is a mature format and prices for finished duplicated projects reflect that. Discmakers customers can get 100 printed discs in paperboard sleeves for as little as $230 (£145). At 500 pieces, bulk orders (on spindles) can cost as little as $0.79 per disc; the same order with a 6- panel Digi-Pak jacket cost $2.59 each. But the increased availability of short runs has created other opportunities for profits.

Both Discmakers and National Media Services charge extra for rush orders, and the size of most orders assures there will be plenty of those, as musicians constantly replenish their inventories for last-minute gigs. New Media Services offers a standard 5-day turnaround and offers a 3-day turn-around for a premium cost. Toblonsky says the company is considering experimenting with a 1-day turnaround service for bulk (spindle-only) orders.

The biggest profit centre for duplicated music CDs, however, is printing, both on the disc and for packaging. Toblonsky says the vast majority of his clients want printing on the media and the package, and combined with regular rush orders. “Musicians tend not to plan ahead,” he says. “It’s the nature of the beast,” and these services can substantially help compensate for the disc’s low margins.

That same dynamic has also significantly diminished the number of brokers in the CD marketplace, which used to cut further into manufacturers’ margins. While the blockbusters that fuelled the major- label model are fewer and smaller now, the Balkanization of music into more and deeper genres is also helping duplicators. Bluegrass, country, folk, gospel and jam-band festivals create multiple marketplaces where genre-specific artists can sell their wares, which also include merchandize like t-shirts and hats that digital printing help duplicators offer on-demand along with discs.

Discmakers in particular has been prolific at finding additional revenues streams that also further engage it with their customers. In 2008, following a seven-year strategic partnership with CD Baby, the company bought the Portland, Oregon-based online music retailer that, for a nominal fee, helps members market and sell their music, both online and on CDs. Discmakers also has distribution agreements in place with Super D and Alliance Entertainment, and sells on Amazon.com and iTunes (through CD Baby). About two-thirds of artists want to sell both physical and virtual versions of their music; most of the rest prefer online only, and virtually none want only discs.

REPLICATION STILL RUNNING

Music CD replication used to be the exclusive purview of large disc replicators, and it was a good business for two decades. However, music CD manufacturing took a back seat at the largest replicators in the late 1990s as the volume of DVD, which offered far higher margins at that time, took centre stage. Then music CD work faded at all but a few large replication plants as music moved to online distribution channels, both legitimate and otherwise. One of the last large label-owned facilities, Sony’s plant in Pittman, New Jersey, closed in 2011.

Sony Music continues to replicate its own high-volume music CDs at its Sony DADC plant in Terre Haute, Indiana, where it also does music CD replication for Universal Music Group and EMI. The former Bertelsmann manufacturing plant in Weaverville, North Carolina, now owned by arvato, continues in operation but RCA Records and related titles were brought into the DADC manufacturing sphere after Bertelsmann sold its remaining half interest in the RCA brand to Sony two years ago.

Sony DADC and Cinram, the two largest remaining makers of music CDs, have plenty of replication lines in place to support big-selling artists like Coldplay and Adele, but the short-run phenomenon has yet to influence their manufacturing. Andrew DaPuzzo, who oversees business development at Sony DADC, says the manufacturer is looking into manufacturing-on- demand solutions for music clients, something they already do for video clients. What they have done recently is adapted DADC’s eBridge service for music CD customers.

For the last seven years, the eBridge service has been used on DVDs to engage buyers by allowing the disc to link to additional content via the internet. Now, Sony DADC is offering music clients the use of a multi-session CD (aka Blue Book and CD Plus) that contains both standard music files and CD-ROM-type data that connects to online content when the CD is inserted into a PC. For instance, a recent Pearl Jam CD sold through big-box retailer Target allowed buyers to access two live-concert video files and downloads using eBridge.

Spiros Rally, Vice President of DigitalWorks, a group within Sony DADC that bridges physical media and digital solutions, says applying eBridge to music CDs serves the purposes of more deeply engaging the music buyer at a time when CD sales are slowing, and providing the label customer with key analytics on music consumers, to better target future sales to those consumers.

“Almost everyone who buys a CD today is going to rip it, to put its music on to their digital music collection, so since the CD is already going into a computer; this is a way to leverage that, to learn more about the consumer and upsell them,” he says. Sony Music is the only DADC client thus far to employ eBridge for music CDs.

Cinram, one of the largest non-label-affiliated replicators, continues to manufacture CDs for the Warner Music Group (WMG) at its facility in Olyphant, Pennsylvania. Cinram declined to be interviewed for this article but its published financial reports indicate that, while music CDs continue to decline overall, Cinram’s revenue from the format was reportedly up slightly in Q3, 2011 to $29.8 million, from the $27.6 million in Q2 that year. “Demand for this format has been steady given the consumer price reductions recently offered at retail,” Cinram’s report explained.

Mid-sized replicators often took offload volume from larger facilities during run-ups to high-volume sales periods, and that still occurs, says Brad Springer, CFO of JVC America, whose Tuscaloosa, Alabama plant replicates music overflow from Sony as needed, such as to support the surge in demand for Whitney Houston LPs in the wake of the singer’s death in February.

“We all started with music, and CDs represented as much as 60% of our revenues into the early 2000s,” he says. (Today, games are the facility’s main disc content.) And mid-level record labels, including larger indie labels, still represent viable, if small, revenue streams. As one former executive at several mid-sized replicators states, “It was a lot of one-thousand-to a few- thousand-piece runs. It wasn't very profitable, but that type of budget music [isn’t] as time-sensitive, so you could run it as fill work months in advance.”

No one is expecting any kind of miracle comeback for the compact disc – automakers are steadily replacing in-dash disc drives with 3.5-mm jacks to accommodate iPods and other personal devices. But the format is proving persistent, ironically with the same indie cohort that once spurned it.

“The romance and idealism that surround digital-only are starting to fade,” says Discmakers’ Tony Van Veen. “Bands need something to sell at gigs and people aren’t paying ten dollars for a download card – they’re great for promotion but not for sales. People want something they can hold. They’ll be holding CDs for a while longer.”

www.cinram.com
www.discmakers.com
www.nationalmediaservices.com
www.sonydadc.com 

“We are pleased that the relevance of our entertainment related products and intellectual property continue to be recognized by industry leaders such as Sony,” said Matt Milne, EVP, worldwide sales and marketing, Rovi. “In use to enable a variety of advanced consumer experiences on multiple screens, our IP and product portfolio is helping our customers drive customer satisfaction and new streams of revenue.”

Rovi IPG patent portfolio and related products, including Rovi entertainment data, enable consumers to find or discover personally meaningful entertainment regardless of the source. Serving as a complement to these capabilities, the Rovi Advertising Network connects device makers to a growing range of leading brands that wish to reach and engage consumers on their platforms.

www.rovicorp.com

However, despite all the care he had taken rebuilding the machines,they leaked oil, with the result that each morning Bernich came in to what he describes as “a hydraulic swimming pool. They’d produced millions of records by the time I got my hands on them. Over time anything will stretch; one column was a little longer and so the platens weren’t exactly flat.”

Bernich decided the presses needed to be rebuilt, but the first quote, from a large engineering firm, was way beyond his budget. He was then fortunate enough to find a local New Jersey-based engineering company, Clifton Fluid Power Machinery, owned by the Brodsky brothers, Richard, Mike and Willy. “They unbolted everything, took them apart, made all the columns the same length and zeroed out all the platens.”

With an eye to expansion, and to ensure a supply of spare parts, Bernich purchased a further four SMT machines, managing to get them for what he calls “scrap value”. From these six presses have come the five machines now in daily use at Brooklynphono. A further three SMTs were sourced from Canada, these being used primarily for their automation components.

This complement of five SMT presses – four 12” and one 7” – has increased Brooklynphono’s capacity to 10,000 12” and 2,500 7” discs a week.

The five presses have not simply been refurbished; Bernich has made several updates. These include replacing the original chromium plated screws in the extruders with stainless steel ones made in the UK, and fitting digital temperature control systems in the nozzle, front, middle and rear zones of the extruder barrels to produce a more even flow of material. This is something which has been standard on European presses such as the Alpha-Toolex for many years but not on the Hamilton, Lened and SMT machines more commonly found used the US.

The dies for the presses also originate from the UK, made by a small specialist engineering firm, GK Engineering Services, owned by George Thumwood, which has been supplying most of that country’s vinyl plants for many years. GK also manufactures stamper forming machines, thereby ensuring a perfect fit with the dies.

Bernich continues to seek other ways to make the presses run better. One of his current projects is to double the output from the 7” machine.

THE TEAM

Standard industry practice is for one engineer to look after three or four presses but at Brooklynphono Bernich is the sole operator for all five machines. Bernich’s father was a mechanic and machinist, and it is immediately obvious that his son Thomas has inherited many of his talents. He’s like a whirling dervish running around the shop floor, attending to each machine as required. It is clearly evident he has an intimate understanding of his presses’ inner workings and he is constantly listening to them for any signs that they’re not operating to their optimum performance. During our conversation Bernich would suddenly break off to attend to a press when he heard a change in the sound it was making or felt an imbalance through vibrations carried via the floor.

Bernich is quick to acknowledge the help he’s received from others in the industry. In particular he cites John Aiello, a former supervisor at Specialty in Pennsylvania (later WAMO and then Cinram), who taught him how to operate the machinery, and Al Miller from the Universal plant in upstate New York for his advice on areas such as maintaining the presses at the right temperature.

There are five other full-time employees at the plant: two looking after QC, two sleeving and packing the finished discs, and an office/production manager. Fern Vernon- Bernich, Thomas’s wife, looks after the bookkeeping (and their young daughter), having given up her job as a knitwear designer at the Liz Claiborne fashion company when the business started to take off.

Although outsourced, the electroplating company which supplies the stampers, the label printer and a nearby mastering studio are also considered to be very much part of the Brooklynphono ‘family’.

RAW MATERIALS

Whilst the company still uses virgin material for coloured discs, for the past year or so all the black discs it produces have been made from recycled vinyl records. Many of these come from the majors clearing out their warehouses; others are excess stock from secondhand record shops in the New York area. Some individuals have even brought in their record collections rather than see them go to landfill. In fact, for the majors it represents a significant cost saving because environmental disposal is an expensive business – a “win/win situation” is how Bernich describes it.

Each disc goes through a rigid QC process before it is recycled. Not all of the records that come in are of the same quality and part of Brooklynphono’s ‘secret sauce’ is in this grading process. Any 78s that might have crept in to the consignment are taken out, as are any discs which have dried out. Those that pass this initial QC phase are air-cleaned if necessary, inspected to establish the origin of the vinyl from which it was manufactured, and then grouped with other, similar discs before being fed into the plant’s main granulator.

Grouping the discs in this way ensures that each batch provides a consistent quality of material, making it easier to control the temperature in the extruders and producing a better end product. It also enables the plant to offer a tiered pricing structure according to the quality demands of the customer. “Certain materials don’t grind well, but we don’t throw them away,” Bernich says. “Some clients just want discs that look good but are not so particular about the sound, so we’ll keep that material for them.”

In the early days there were problems with the regrind material. Shards of metal from the granulator blades were getting in to the mix which, although microscopic, created damage to the stampers that was clearly audible on a finished disc, given that a record groove is only around two-thousandths of an inch wide.

Hosokawa Polymer Systems in neighbouring Connecticut redesigned the granulator’s auger feed system, reducing the clearance to 1/16” from 5/16” while ensuring that the blades didn’t make contact with the casing. The much improved raw material from these redesigned granulators increased yields dramatically and they are now running at the industry average, compared with a reject rate of anything up to 65% beforehand. In fact, Bernich claims the regrind from this modified granulator runs better in his extruders than virgin vinyl. Keeping the material free from debris can also extend the life of a stamper by up to 1,000 discs, helping to improve a press’s output even further.

The four 12” presses are also equipped with their own smaller granulators. During the pressing cycle the ‘flash’ (the excess material removed from the edge of a finished disc) is fed directly back to be reground. Bernich believes he is the only one in the US using such a closed-loop system.

The presses run on a 30 second cycle time. “They could go to 20 seconds,” Bernich says, “but you’d get a lot more rejects so it makes sense to go for 30 seconds.” The heating and cooling phases of the cycle are tightly controlled. Cooling too quickly causes cracking, similar to that seen on old oil paintings. “At a 30 second pace there’s also time to look at every record and do the QC. This means we’ve made fewer records when we find a problem.”

Test pressings are given an initial audio and visual check on a record player sited on the factory floor. If there’s a possible problem the disc is taken upstairs to a quieter environment for a more thorough examination.

THE CLIENT BASE

Many of Brooklynphono’s clients are local indie rock labels, who like the convenience of being able to pick up their records directly from the plant. The green aspect of not shipping long distances also fits neatly with the company’s ethos – although Brooklynphono does have several customers in Europe!

In a complete about-turn from 30 years ago, vinyl records now cost considerably more to make than CDs. Pricing is always a sensitive issue, and it wasn’t discussed during our conversation, but a customer was quoted as saying, in a New York Times article last year, that he paid $1,300 for an order of 500 12” discs. The price will of course depend on factors such as order size: Brooklynphono has fulfilled orders for 5,000 units but will happily produce as few as one hundred.

So is vinyl’s continuing existence the result of the superior sound quality so often cited by its fans, or simply nostalgia? The reasons given vary according to who you talk to, but there’s no doubt that the format is enjoying its best sales for many years. According to The Nielsen Company & Billboard’s 2011 Music Industry Report, vinyl album sales in the US rose 36.3% in 2011 to 3.9 million, from 2.8 million the previous year. In the UK, another strong vinyl market, Official Charts Company data records sales up 55% in the first half of 2011.

However, in this era of digital downloads some concessions are having to be made. Many vinyl albums now carry a code that enables buyers to download an mp3 file for those occasions when they can’t be near their precious turntables.

www.brooklynphono.com

The March issue of D2D highlighted the multi-front efforts of BSA, IFPI, BPI, RIAA, MPAA and CDSA in accomplishing these successes.

At the same time leading suppliers of anti-piracy products and solutions are working with IP content owners and replicators to improve their offerings to meet the technology advances of the pirates and counterfeiters.

Sharing their newest advances are representatives of Rovi Corporation, Santa Clara, CA; Primera Technology Europe, Wiesbaden, Germany; Fortium Technologies Ltd, Bridgend, Wales, UK; TrusCont Ltd, Haifa, Israel; StarForce Technologies, Moscow; Peer Media Technologies, Culver City, CA; Verance Corporation, San Diego, CA; Civolution, Eindhoven, The Netherlands; Audible Magic, Los Gatos, CA, and London, UK; Logically Secure, Cheltenham, UK; and Rimage Corporation, Minneapolis, MN.

“Fortium Technologies launched Patronus around five years ago,” tells CEO Mathew Gilliat-Smith, “and it continues to grow in popularity as a reliable way of protecting the value of DVD content in niche sectors of the video ecosphere. Patronus, along with Fortium’s new PIN-Play file-based protection solutions, plays a key part in this area and is used on most new movie titles along with watermarking."

For replication, Technicolor is a good example of where Patronus has been fully integrated at a multi-site manufacturing plant level as a service to customers for long run mass market DVDs. At the Technicolor Piaseczno, Poland, and Guadalajara, Mexico plants customers can specify Patronus anti-rip copy protection which is seamlessly applied to disc.

“Over the last 18 months, Fortium has been developing its Blu-Lock anti-rip copy protection for Blu-ray disc production to complement AACS,” says Gilliat-Smith. “We launched Blu-Lock for BDR recordable discs in 2011, filling an important gap where no other form of copy protection currently existed. Blu-Lock for replicated Blu-ray, where Fortium has worked very closely with Technicolor, Eclipse and AudioDev, is intended for launch in late Q1 2012. We are optimistic about the take up of Blu-Lock because the studios are so concerned about the longevity of survival for high definition video reproduced in the piracy market as compared to the survival of standard definition DVD content.”

Corey Ferengul, Executive Vice President of Products at Rovi, says: “As a leading provider of copy protection technology to content holders around the world, Rovi Corporation has protected more than nine billion DVDs and Blu-ray discs, and embedded more than 500 million consumer electronics devices worldwide.

“RipGuard, our popular anti-rip technology, has protected more than 1.5 billion DVD discs, ranging from Hollywood blockbusters to regional indie titles. By placing a significant barrier to casual copying, RipGuard helps content holders recover revenue lost to piracy when their content is in the greatest demand. Rovi CopyBlock takes our content protection technologies and makes it immediately accessible to independent content producers. Applied by partners during the replication/duplication stage, CopyBlock provides indie content holders an easy way to add both anti-rip and anti-copy protection to their titles.”

Authorized RipGuard DVD service providers include in North America: US: Analog Free Media, Arvato Digital Services, Cine Magnetics, Digital Flex Media, DuArt Film & Video, Duplium of America, Full Service Media, Idea Media Services, Paragon Group, Synchronicity Mastering Services, Tobin Productions; Canada: Duplium, Premium Disc. In Europe: UK: Alpha Duplication, VDC Group; France: KDG S.A., MPO International; Germany: Arvato Digital Services. In Asia-Pacific: Hong Kong: Arvato Digital Services; India: KRSD (India) Pvt. Ltd; Taiwan: Bestdisc Technology.

“Since Primera introduced its PTProtect software solution for DVD Video and dual Layer DVD-9 discs in September 2008, an untold and growing number of films and videos have been protected from illegal duplication,” according to Andreas Hoffmann, Managing Director of Primera Technology Europe. “It has been integrated in our publishing software PTPublisher, now available in our latest product line, the DP-4100 Series of disc replicators. Our users have found it invaluable to prevent illegal copying, selling or distributing motion pictures, television programs and other video content. Besides film studios, our customers are videographers and production studios that produce short-run commercial and sensitive video content on recordable DVDs.”

Among the well-known entertainment software content owners that use Primera CD/DVD publishing equipment are 20th Century Fox, BBC Worldwide, Cherry Lane Music Publishing, Dreamworks, DreamWorks Animation, ESPN, MGM Studios, NBC Universal, Paramount Classics, Showtime Networks, Sony ATV Music Publishing, Sony Pictures Entertainment, Sundance Channel, Turner Broadcasting, Viacom and Walt Disney Studios. Recent new customers include German media company ASPM Medien, which uses Primera DP-4100 series Disc Publisher with PTProtect for video production, video features and interviews, and US film archivist and historian Ira Gallen, who uses Primera Disc Publisher 4102 with PTProtect to safeguard hundreds of Palely Center for Media historic DVD and BD images.

“The TrusCont DVD Protection Toolkit and Enhanced DVD-R are a single anti-piracy solution – the software and the media,” explains Eyal Cohen, Chairman and CEO. “Our diverse customer base includes commercial software, educational materials, games and multimedia, video guides, confidential/internal data and medical, among others. The software can also produce a protected disc image that can then be mass duplicated onto TrusCont Enhanced DVDs, other CD/DVDs, USB Flash Drives and flash memory cards, using compatible systems such as Rimage digital publishing systems, and our proprietary Content Publishing Servers (TCPS). Our newest model TCPS 3700 offers 37 ports and a DVD recorder. The same copy protection technology is also available for replicators, who can use a free utility to convert the protected gold master to a DDP image set.

“Version 4.0 of our Toolkit is scheduled for release in Q2 with an alternative copy protection method applicable to standard DVD-R media. Instead of protecting the disc against copying, it will lock the standard DVD-R to the computer(s) on which it will be used first. Any copies made from the DVD-R will be usable only on the same computers. DVD Protection Toolkits are available for Primera, Rimage, Acronova and Apollo systems, among others. Authorized replicators include US: Great Lakes Media Technology, Synchronicity Mastering Services; India: Franchisee, with Moserbaer, Sony DADC India for mastering/replication; and Turkey: Kamel.”

“StarForce has been offering state-of-art copy protection and code obfuscation technologies along with comprehensive and flexible licensing solutions for multimedia software and computer game content owners since 2000 when we introduced FrontLine Disc, with optical media protection from copying and unauthorized use,” notes Dmitry Guseff, Deputy Marketing Director.

“FrontLine ProActive, our online activation product, hit the market in April 2004, and FrontLine Universal, our integrated disc/online solution, bowed in 2007. Multimedia software companies using our anti-piracy products and services include CP Digital, GSC Game World, Nival Group, PYCC, Snowball, FGI, Cenega, Akella, Centauri Production, Metaboli, Simbin Studio, magnamedia, CD Project, @mail.ru, Icehole Games and Cats Who Play. Our newest product is StarForce ProActive for business, with protection for .NET applications and those running on corporate and other local networks.

“We actively partner with disc manufacturing and replication facilities worldwide. Partner plants offer StarForce copy protection technology to customers for a percentage of revenue, while Certified Plants are licensed to manufacture discs protected with our keyless and non-keyless technology. Currently StarForce has 71 partner and certified plants in the Americas, Europe, Russia and CIS, Asia and Africa. Key plants include, in Europe: GmRecords, MPO France, KDG France; Russia and CIS: Laser Craft, Hi-Tech Media Club; Asia/China: Polystar, Zhejiang Huahon.”

“Using a range of non-invasive techniques on P2P networks, Peer Media Technologies frustrates would-be pirates’ attempts to trade copyrighted content,” observes Raj Samtani, Senior Vice President, Sales & Marketing. “Essentially we make it a lot tougher to ‘steal the brand’ with a balanced approach to reduce piracy’s negative impact on the business by curtailing the supply, making it tougher to distribute, and then making it less desirable to people to use the pirate information. Our countermeasures techniques include interdiction: downloading to block would-be pirates; swarming: splicing spoofs into downloads; queuing: filling file lines for download; counter-posting: mimicking posts with protected content; decoying: posting of false files; and spoofing: propagation of false signals.

“Our business intelligence services let a studio measure what is happening on the P2P and cyberlocker networks to determine the financial impact of piracy, and to develop counteractive methods. With three years of data, if a new movie has a similar profile to an earlier movie, we can look at geographic data where it was most popular to tweak marketing programs or tweak anti-piracy programs in those markets. Our full-fledged service suite to such major clients as Paramount Pictures, Universal Music Group and Activision offers early leak detection, PTP and web scanning services, cease and desist notices, and compliance monitoring.”

“The Verance Copy Management System for Audio (VCMS/A) has been the industry standard watermark for copyright protection of recorded music within the DVD-Audio, SD-Audio and the Secure Digital Music Initiative (SDMI) formats since it was launched in 1999,” Joe Winograd, co-founder, Executive Vice President and CTO, comments. “Our Cinavia technology has been the industry standard watermark for the protection of filmed entertainment and TV content within the Blu-ray Disc format since the standards were formalized in 2009.

Cinavia has been broadly licensed by major studios such as Sony Pictures Entertainment, Twentieth-Century Fox Film Corporation, Universal Pictures and Warner Bros Entertainment. Consumer electronics and semi-conductor chip manufacturer licensees include Broadcom, Intel, MediaTek, NEC Electronics, Panasonic, Pioneer, Renesas and Sony Electronics. PC player integrators include Corel, Cyberlink and Microsoft.

“It is the first technology available to studios to interdict playback of camcorder-based pirate films – almost every movie is available within days of theatrical release as a pirate camcorder version for replicating and online distribution. It’s a unique approach to discourage consumption, as our research shows that about half of consumer movie ‘pirates’ will convert to a paid consumption path that would generate a tremendous increase in sales. Our existing Cinavia standard also has been created to work with new technology such as UltraViolet and we have joined DECE (Digital Entertainment Content Ecosystem) for a possible future anti-piracy solution.”

“Civolution first introduced NexGuard, our Pre-Release forensic watermarking solutions, six years ago under the Thomson brand,” according to Marketing Director Emmanuel Josserand. “Since we took over the Thomson STS activities by mid-2009, the solutions and product portfolio have been greatly improved. Our NexGuard watermarking adds a unique, imperceptible serial number to each copy of a given piece of content whatever the output video format. Specifically designed for the post-production environment, it makes the distribution of audio and video content traceable and secure at the pre-release stage. Our new automated, web-based NexGuard Detection Service as a secure portal was launched at NAB 2011. Since then, it has been used by major customers for forensic detections.

“Since Civolution announced the integration of Fortium's PIN-Play technology in the NexGuard Screener solution at the end of 2011, it was tested first by one major studio in Los Angeles and it has been immediately adopted for the distribution of DVD screeners. Our key customer list includes most of the Hollywood studios and post production houses, HBO, 2G, Digital Factory, Deluxe, Mikros and Quinta, among others.”

“Audible Magic's SmartID and CopySense solutions offer automated content recognition (ACR) capabilities using our patented digital-fingerprinting technology,” explains Jay Friedman, Vice President of Marketing & Customer Support. “SmartID solutions deliver ACR features for primary and second screen devices that enable social TV, interactive advertising and audience measurement. These solutions enable live TV and advertising identification, check-in and media synchronization for such companies as Miso, yap.TV, WiOffer, Cinram's 1K Studios and Accelerated Media. Our CopySense solutions deliver ACR capabilities for copyright monetization, licensing, compliance and filtering that are needed by website operators, cloud service companies and replicators.

“Our CopySense services and related Replicheck software are used by such companies as Facebook, MySpace, Dailymotion, Soundcloud, Metacafe, Break, Hulkshare, One-Stop China, Cinram, Rainbow Records, JVC, SLI and many others. In addition, we have our CopySense Network Appliance that is used by over 150 colleges and universities to manage copyright compliance on campus networks. To protect, monetize and license their copyrighted works, content owners such as music labels, and movie and TV studios, register their works with Audible Magic. Included are Universal Music, Warner Music, Sony Music, EMI, The Orchard, IODA, IRIS, IODA, Merlin, Beggars, Tunecore, NBC Universal, RTL Group, Disney, Canal+, Fox and Viacom, among others.”

“Logically Secure has been working in the Media and Games Industries since 2002,” according to Steve Armstrong, Technical Security Director. “We provide penetration testing (or pentests), studio and site audits, CDSA technical auditing and Cyber Incident Response, which gives us incredible insight into how most organizations in this sector use, manage and plan their IT. Creative companies – music, film or game developers – are sharing environments. Trying to secure these environments is as much about understanding where the product goes, how it gets there and who has access to it along the way as it is about any particular end point security.

“So while we provide pentesting services to music labels, studios and game distributers alike, we start by looking at the business processes that are driving their IT systems. We focus on getting the people to use their respective IT correctly, and securely, but in a non-intrusive way. We work closely with the studios, speak to the developers and understand ‘how’ they work, and then offer slightly different, but more secure, ways of doing the same thing. We still do pentests, web server and application testing, together with mobile device testing, but these are much more focused and give the customer results he can use and security he can measure, all without stifling his creative, tight margined business.”

“We assist a broad range of businesses to deliver digital content directly and securely to their employees and customers,” notes Jack Etzion, Business Development Manager for Rimage Disc Publishing, “with a strong copy protection capability that is integrated directly into our disc publishing solution. These solutions also preserve playback compatibility and leave the original media content unmodified, while providing robust upgradability. Our anti-rip solutions provide on-the-fly protection to pre-release content screeners and on-demand production DVD and Blu-ray discs. These are integrated into our software suite, ensuring seamless execution and a streamlined workflow.

“Rimage’s anti-rip video solutions protect applications that include distribution centres, pre-release video (dailies), Oscar screeners and web fulfillment for content owners, pre-sales distribution, on-demand retailers, service bureaus and content publishers. Online content requires the same protection for publishers, but it is even more challenging to deliver.  We’re currently working with media and entertainment companies on an online content security solution that will provide strong copy protection across multiple devices, whether online or offline, with a product release later in 2012.”

www.fortiumtech.com
www.logicallysecure.com
www.peermediatech.com
www.primera.com
www.rimage.com
www.rovicorp.com
www.star-force.com
www.truscont.com

Michael Lantz, CEO of Accedo, set the scene by discussing the theme of ‘Connecting the Living Room Experience’. “Connectivity is revolutionizing the TV experience,” he stressed, “not just OTT devices but also TVs themselves.” His prediction: “Everything will be online eventually by 2015 – currently 500 million TV devices are used online." 

The downside, he pointed out, is that there is a “technology fragmentation” in the Connected TV environment, and complete standardization will be years away. “It is,” he conceded, “a complex ecosystem of software, devices and generations, but everyone needs to tackle the problem. You need to make sure you have control of the platform management as connections will allow for personalized content consumption.”

While the thrust of the event was focused on monetiztion of content, Lantz added, there are other reasons for being in OTT. He cited some case studies of companies with different motivations: for instance, improving awareness by added value in OTT services; increasing loyalty in customers and reaching new ones. Lantz’s final word: “Companion apps will play an important role in the connected living room.” 

Lantz was followed by Carlos Lucas, VP General Manager Europe/US of Nextreaming, who explained some of the major ways in which the market has evolved, and what their impact has been. The examples he quoted included the fact that it is now possible to have a rich multimedia experience in mass market devices, such as tablets, and that ‘TV Everywhere’ is becoming a commodity.

“The mobile phone is now software rather than hardware,” he explained. “Technology has changed dramatically and is getting better and better every year.” The good news, he said, is that the end user experience is getting better and better; on the other hand, there is still technology fragmentation.

Massimo Savazzi, EMEA Senior Business Development Manager – Content Access and Protection, Microsoft, looked at ‘Flexibility and Efficiency in Content Security’. In discussing the market challenges for content protection, Savazzi used the word ‘multiple’ multiple times: device types and manufacturers, streaming standards, operating systems, DRM standards and versions...

There is a fight for the TV screen, he pointed out, with new challengers entering the market from different segments. The TV is still the main experience, but it is no longer controlled by the broadcaster. “Even with a big TV screen, viewers are still using a smartphone phone or tablet.” What he called “tactile television” is breaking the rules. “Tablets and touch screens are accelerating the content convergence.”

Schouten continued the content protection theme with his presentation on ‘Creating, Monetizing and Securing the Business of OTT Multi-Screen Services’. He pointed out the massive changes in video distribution since 2007, using one company – Netflix – as an example. Video distribution now includes tablets, smartphones, games consoles, disc players...

That means a whole new face of content protection, said Schouten. “In 2007, fighting piracy meant taking on either organized crime or hackers working from from their mothers’ basements.” Now, he pointed out, everyone has committed video piracy, whether they know it or not.

“That has completely changed the foundation of business: now consumers are not only our bread and butter, but they are also our enemies. The only difference between a consumer and a pirate is whether or not we are meeting their requirements with a legitimate service.” The best prevention of piracy is renewable content security: tracking down piracy and stopping it when it happens, but it is crucial to offer consumers an affordable alternative to piracy and effectively monetize it. “If you offer consumers a reasonably priced attractive content option they will prefer that over piracy.”

Robin Pembroke of ITV shared some of the TV station’s strategy of making much of their own content, and now adopting a multi screen strategy. They are developing new content services including an ITV news online experience, which updates dynamically and renders dynamically across devices; providing innovative advertising platforms – he showed an example of a Cadbury’s cream egg campaign which can be played like a game, complete with exploding eggs; enhancing live TV through second screen; and distributing VOD content to others. In the explosion of viewers of mobile devices, he said, their own ITV Player app is the second most downloaded free iTunes app. However, “The challenge for many people is how to monetize.”

Brett Sappington of Parks Associates concluded the presentations with an overview of worldwide digital living, including the fact that pay TV operators have lost control through the proliferation of devices and content that is easier to find due to recommendations and search capabilities, and is more portable. On the other hand, he pointed out, “Cord cutting is still an issue but less so than providers initially thought; people are coming back because experience is fragmented. Now there are cord shavers who reduce the pay TV services and supplement their content elsewhere. TV remains essentially a lean-back experience.”

Financial terms of the transaction were not disclosed but, according to the announcement, under the terms of the transaction, Baker Acquisitions will acquire the UK business out of administration and will provide it with the capital it needs to trade on a normalized basis. Baker will acquire all 333 UK stores that have remained open during the period of administration.

Commenting on the agreement, Henry Jackson, Managing Partner of OpCapita said: “We are pleased to have reached agreement with the Administrator. We strongly believe there is a place on the high street for a video gaming specialist and GAME is the leading brand in a £2.8 billion market in the UK. We have assembled a strong team of experienced industry operators to implement the program of operational change that is needed. There is a huge amount to do but we look forward to the challenge of restoring GAME’s fortunes in partnership with its employees and suppliers.”

The agreement also means that the jobs of nearly 3,200 GAME employees, who will transfer to Baker, have been safeguarded. Baker Acquisitions will also seek to re-employ a small number of staff who previously worked at GAME’s head office but who received redundancy notices last week. There are no plans for any further store closures.

Mike Jervis, Administrator to The GAME Group plc and PwC partner added: “We are delighted to be able to secure this business sale and provide some much needed stability for customers, suppliers and employees alike in these uncertain times. The support of these stakeholders has been crucial over the last week and I would like to thank them for their support throughout this difficult period. “This means that the GAME brand will not be another one of the retail names disappearing from the high street in the current difficult climate.”

www.opcapita.com

So, it was a conscious decision not to dabble in the consumer market? If so, why?
We have always been focused on the business to business segment of the market, but we had licensees who were consumer-oriented. This was our skillset. We could deal with businesses really easily. We didn’t have the skills to break into the retail market that others did. It was better off for us to license them. We never really were on the retail shelf except for multi-disc sets, and to this day, we still do a lot of books on disc as well as karaoke and video packages. We have a universal solution.

Despite the digital boom, companies still want a shelf presence. Looking ‘cool’ is as much a necessity as is being different. When choosing products, companies are also looking at cost reduction and more environmentally friendly products. Univenture offers many packaging solutions, but is it all status quo in terms of developing anything new? What is the future of a company that develops packaging for physical media?
Univenture products offer all of the properties mentioned, and as a result we still have an opportunity to grow, though we may be cannibalizing sales of other companies. We have looked at new ways of offering products like our UniKeep binders. For example, we now offer complete high quality digital printing on the UniKeep, so that means we offer permanent branding. Anyone can get online and order a full size UniKeep with their own custom printing on it. With digital printing, if somebody wanted to do four different types of covers but still package all the same media they can. Packaging will be driving the sales.

Is UniKeep your ‘star’ product now?
Actually, the EnvyPak is gaining a tremendous amount of interest. It’s unique in that it is the only plastic envelope that is automatable with standard insertion equipment. That has given us an advantage. It is being used for mailing and for product awareness and packaging at an ever increasing level. That’s the fastest growing segment of Univenture’s business right now. We have a lot of EnvyPaks going into publications as giveaways as publishers are still a big customer.

While you have done some high profile environmental packages such as the one created for Al Gore’s environmental documentary An Incovenient Truth a few years ago, it sounds as though the environmental angle is a little less pronounced in your marketing. Is that because of the cost of being green?
There are varying degrees of interest in being green. Economics still drive environmental friendliness. I’m sorry to say that, but there is a reality there. However, when you have petroleum prices going really high as they are now, then people start to think, ‘How can I reduce costs and how can I make it out of an alternative material?’ When you see oil prices hit $150 a barrel, you are going to see a lot of interest in being green once again.

In talking about economics, was that the reason Univenture’s plant was closed in Ireland recently?
What we did in Ireland was move our equipment to customer facilities. Technology is still available in the region, but we are not in our own facility. Admittedly, it was harder to gain traction in some of the locations like Reno and Ireland. It was easier to consolidate while still being able to serve the customer with a number of opportunities that exist.
None of our customers have fallen through the cracks. If anything, we have seen an increase in customers. We ship product worldwide, and have some manufacturing in China as well, but most of it is in Marysville, Ohio. We did lose some employees through consolidation, but we have 90 people working for us, many of whom have worked for us for a long time.

Univenture has ownership in other companies as well. Can you describe those ventures?
Biobent Polymers is owned 100% by Univenture. It offers bioplastics created by replacing up to 40% of the petroleum normally used in plastics manufacturing. The technology behind the bio‐composite was developed by Battelle Memorial Institute with funding from the Ohio Soybean Council, and licensed exclusively to Univenture.
Then, there is Algaeventure, founded with a mission to take the cost barriers out of growing and processing algae; in the process we discovered a technology that will revolutionize dewatering and other solid-liquid separations. It started as a research project that turned into a development project that turned into a entire category of potential products with the highest being pharmaceuticals. Univenture opened ownership up to shareholders and now only owns 4%. We are going to learn a lot in the next 18 months about its real potential.

For a relatively small company, Univenture is involved in quite a lot. Any suggestions as to how to keep your products all straight?
Recently, we have begun to focus on separating any consumer products, like UniKeep, from our business oriented packaging products. Univenture is going to stay more focused on the packaging and Unikeep.com will be more focused on the consumer. We confused people by having that mix on our website. In terms of the future of consumer packaging, we are aware that companies are already planning the retail stuff for next year. We hope to be on their radar. We can especially add innovation in multi-disc packaging.

www.univenture.com

The Future of Entertainment Summit (FES2012) takes place in London on 20th June and will explore the business opportunities surrounding new home entertainment technologies, platforms and delivery systems, as well as featuring Futuresource market insights, which provide strategic analysis of the current landscape and focus on the key challenges and opportunities in the years ahead.

In advance of the conference, here is a roundup of recent research from Futuresource.

Tablets

• Worldwide, consumer tablet sales hit 60 million in 2011 and are on track to grow to 176 million in 2016, when ownership will reach 20% in many countries.
• As predicted by Futuresource, tablets have cannibalized demand for netbooks, but are largely seen as complementary products to conventional PCs and Macs by consumers at present.
• Globally, tablets accounted for 2.7 billion (10%) of all mobile app downloads in 2011, rising to 17% by 2016.

Apps

• The global apps market continues its rapid growth, almost doubling in 2011 in terms of consumer spend, reaching almost $4.5bn. Growth in unit downloads was even more impressive at 128%, reaching over 26m units, reflecting the growing availability of free apps.
• The app market is expected to reach 74bn unit downloads by 2015.

Connected TV

• With forecasts exceeding 80% of units shipped by 2015, connected TVs are expected to lead the way in global TV shipments, escalating from 27% in 2011.
• On a regional level, Japan leads the way in the adoption of connected TVs, with 59% of shipments in 2011 integrating IP connectivity as standard.
• Penetration in the US and China hit 29%, with Europe still behind the global curve at 24% of TV sales. 

Smartphones

• Global smartphone sales grew by nearly 60% in 2011, exceeding 470 million units. Futuresource forecasts that the global smartphone market will total nearly one billion units by 2015, accounting for 56% of total mobile handset sales.
• In 2011, Android OS accounted for nearly 40% of global smartphone sales, driven in particular by strong sales of Samsung devices and Chinese brands.
• Apple’s iPhone continues to strengthen its position, with record Q4 sales last year.

Sessions taking place at FES2012 are as follows.

Keynote: Meeting the Consumer's Changing Entertainment Needs
The entertainment landscape is changing rapidly, driven by an ever-expanding range of entertainment-based devices and a growing number of delivery platforms. With this change comes a need for program makers and distributors to review their business models to ensure that they remain relevant and continue to meet the wants and needs of today's consumer. In this opening keynote a senior figure from one of Europe's leading broadcast groups shares a vision of what needs to be done and the challenges that lie ahead.

Industry Leadership Debate: Can the Networks Deliver?
There can be no doubt that the load being placed on the networks to deliver high quality entertainment, on demand and across a wide range of devices is creating significant challenges for the network operators, who have the additional challenge of providing seamless interoperability across networks. In this panel discussion a number of key participants debate who is best placed to respond to these challenges and what needs to be done to ensure that the networks are 'fit for purpose' moving forward.

Keynote: The Communications Review
As the government undertakes a wide-scale review of the regulatory framework supporting the UK communications sector, Ed Vaizey, UK Minister for Communications, Culture and the Creative Industries will share his views on how industry and government can drive growth and innovation in the sector.

Keynote: Building an Entertainment Ecosystem
In addition to having the right business model to meet consumers' entertainment needs, content distributors require a carefully constructed ecosystem to allow total consumer engagement. In this third keynote presentation of the morning we will learn what needs to be done to create an umbrella environment which embraces the need for discovery, communication, interactivity and payment, and the role these all play in the entertainment ecosystem of the future.

Industry Leadership Debate: Maximizing Opportunities for the Second Screen
The second screen phenomenon represents a true shift in consumer behaviour and allows advertisers and program makers to truly engage with their audiences for the first time. Through simultaneous access to social networking sites and direct communication with friends and family, viewers are increasingly sharing their thoughts and/or immersing themselves into the content through deeper interaction and richer information, thus enhancing the overall viewing experience. For program makers and advertisers this represents second screen usage at its best. In this series of presentations and discussions we learn more about the ways that the second screen experience can be exploited.

Keynote & Debate: UltraViolet Under the Spotlight
Digital lockers and cloud-based storage systems offer the consumer flexibility when enjoying their entertainment library, while at home or on the move, across multiple devices and with other family members. Digital lockers also help avoid so many of the negative aspects associated with buying and owning online content, namely the hurdles of downloading, storing and accessing those titles. Leading retailers, hardware manufacturers and content companies have all signed up to the UltraViolet digital locker solution and the process of building consumer awareness has begun. In this session a number of key stakeholders in UltraViolet share their experiences to date and socialize their views on what needs to be done.

Industry Leadership Debate: Show Me the Money
In order to guarantee the long term success of paid for digital content business models, secure delivery, access and payment systems are needed, with measures in place to minimize the impact of the pirates. At the same time, the consumer's need for flexibility, compatibility with existing transactional services and ease of use all have to be met. In this afternoon's first leadership debate, speakers representing different parts of the security and payments ecosystem talk about the opportunities, threats and solutions available moving forwards.

Futuresource Focus: Understanding the Market Dynamics
Drawing heavily on its continuous program of industry and consumer research in the global consumer electronics and entertainment content sectors, Futuresource will once again provide an in-depth statistical look at the opportunities that lie ahead, detailing the expected revenue flows and reviewing the key metrics that will determine business success.

Intellect Focus: Building Trust Online, Not Barriers to Adoption
If data is the new black gold, then trust is the pipe that will keep it flowing. As brands across the entertainment sector offer increasingly innovative services based on deeper online consumer relationships, the sector's continued growth will in large part be down to the maintenance of consumer trust in an increasingly challenging privacy and security landscape. It is vital that we create a community that promotes business practices and technologies that enhance consumer trust and the vitality of innovative services. Intellect will examine how organisations can build trust online not barriers to adoption.

Keynote: The Consumer Unwrapped 
In this session, our afternoon keynote talks in detail about the consumer journey, the steps they go through in researching, planning and executing a purchase and the ways this journey is changing in the connected world. The factors that impact on that journey are explored in terms of engagement and trust and how this is likely to evolve in the future. Our speaker will also unwrap the consumer's innermost motivations. What makes him or her act the way they do? How can vendors positively influence consumer behaviour? What are the key factors that promote consumer loyalty and build brand advocates?

Industry Leadership Debate: Making the Consumer Connection
Reputation and effective positioning are essential ingredients for success and require consistent reinforcement in order to shape behaviour and enhance the overall consumer experience. Our closing session draws speakers from across the industry to discuss the strategies behind developing and maintaining consumer relationships in order to maximise sales. Consumer education, innovation, marketing communications, in store positioning and loyalty cards all have a role to play and will be among the areas explored in this high profile closing session.

www.fes2012.com

Cohen got started with a brief question to the audience about what kind of tablets were in the room. A large percentage of the room had tablets with them, and Cohen remarked that here is an explosion of a category that didn’t even exist just a few short years ago. Antonellis discussed the current and expected impact of those connected devices (smartphones and tablets) and the extremely high connectivity rates of new TVs, and how entertainment will be impacted in the next few years.

Cohen shifted the discussion to the cloud, and Antonellis stated that every entertainment company needs to have a cloud element to their IT strategy to manage peak demands and the fast pace of the changing entertainment landscape — including production companies. Antonellis went on to describe that it was often the network that was the limiting factor in new deployments of applications and experiences to the business and to consumers, describing how her phone dropped on the way to the session four times and the impact that level of network connectivity challenge has on larger data problems.

When Cohen asked Antonellis what the next big thing might be, she pointed him to voice input and the revolution Siri is likely to bring to our children in the near future, describing a day when the primary input to computing devices will shift from the keyboard to voice. As Cohen questioned the impact of Silicon Valley on the entertainment industry, Antonellis deftly described her respect for their innovation and understanding of the consumer, and described their mutual respect for Hollywood’s ability to make great content.

Cohen came back later in the discussion to the theme again, asking Antonellis what her wish list was from Google or Apple. Her answer was a strengthening of the partnership in a joint view of the consumer as entertainment experiences evolve and change with technology. When he pressed for where the tension lies, she described the need for Google (as an example) to improve the efficiency and relevance of their searches to consumers, but when that result is a link to pirated Hollywood content, there is obvious tension.

Antonellis did delve into Ultraviolet for a few minutes, describing where the industry has come from in the sense of a digital locker that the consumer can manage and what is now possible as consumers purchase new content and upcoming use cases for consumer to manage a conversion of their existing physical libraries. Finally, she touched on the progress that Warner Brothers and other entertainment companies need to make in regards to improving the ease of mobility for their own employees as the current needs of the business put more and more people in remote working conditions. A very insightful discussion across a wide range of topics — all of which drive home a need for IT management in Hollywood to be on top of their game to keep up with the rapidly changing industry and consumer entertainment experiences.

Antonellis and Cohen were immediately followed by a panel of current studio CIOs, moderated by Leo Collins (formerly CIO of Lionsgate). The panel touched on a wide range of current studio and entertainment problems from big data analytics to managing residuals and even promoting innovation within their own companies.

Derek Smith, SVP of Operations Strategies at Fox, gave some incredible insight into how Fox is leveraging IT to create new business models and new opportunities for creating value within various parts of the wider Fox organization. He discussed the impact that Fox's IT department has on everything from organizational agility to react to new opportunities, to their ability to specifically rise to the challenge with discrete opportunities like their expedition into commerce and second screen with their Sons of Anarchy television series. He even described the impact social analytics are having on their theatrical campaigns, allowing them to test various methods for Planet of the Apes before the major campaign for the movie began so that the impact was honed for the right demographics they wanted to attract to the movie.

The panel moderated by David Cutbill on residuals management took the entire room back to earth and reminded us that much of the IT support is required on mundane, but incredibly important things (ie getting actors and other cast members paid). There is so much of the drudgery that most of us take for granted that it needs a session like this not only to help us re-prioritize our own efforts in our business endeavours, but also reminds us to thank the unsung heroes who man the help desks, deal with software upgrades, and manage through major application changes to support the core of our businesses every single day.

The other major topic of the day was delivered by the platinum sponsor, with Eric Iverson from Sony moderating a panel to discuss the progress of EIDR implementations within the various studios. For those of you who are new to this, the concept of an Entertainment ID Registry is to build a consistent approach to unique identifiers not only for the final versions of consumer-ready entertainment products, but for the assets that comprise those final product (language tracks, audio tracks, scenes, clips, images, metadata, etc).

While the topic seems quite ethereal, Iverson was pretty successful at bringing the panellists to real examples of projects they had put into place in a relatively short period of time (and for reasonable costs) to deliver on this concept which will improve the industry’s overall ability to manage the entertainment value chain across organizations.

The rest of the day was comprised of smaller breakout sessions on a number of key issues affecting the IT industry, covering topics ranging from the cloud, to second screen and to the secrets of unlocking your metadata potential in your enterprise.

A lot of ground covered in a single day, starting with great insight with one of the entertainment industry’s most respected technologists and ending with short, detailed presentations on current IT challenges, and interlaced with networking opportunities throughout.

http://www.variety.com/events/2012/hollywood-it-summit
www.chuckparker.tv

A VHS recorder with the VHS logo could be relied on to play and record VHS tapes. The same went for Betamax.

While the key patents on CD were still in force, licensors Philips and Sony tightly controlled the Red Book standard. When Scandinavian record company BIS tried to sell double length CDs, with an hour of different mono content in each stereo channel, the scheme was very quickly outlawed.

A DVD player can be relied on to play DVD discs. When manufacturers stupidly developed five rival formats for recordable DVD (DVD-R, DVD+R, DVD-RAM, DVD-RW and DVD+RW) the hardware companies just developed recorder drives that handle all formats without the user needing to know the difference.

Blu-Ray players play Blu-ray Discs of any capacity. FM and AM radios receive programs wherever they are. TV sets – at least for the correct country – receive TV programs. Sign up for iTunes, plug in, pay, and play.

But what if the tin does not say what the contents are supposed to do, because no-one can agree on plain English words to describe what it does?

This is what is happening with Hybrid TVs, aka Internet TVs, aka Connected TVs, aka Smart TVs, and bolt-on set-top Boxes. These devices, for present purposes let’s just call them Hybrids, could be an easy way to sell added value movie material down a line. But they aren’t, because competing TV manufacturers, broadcasters and service providers cannot agree a foundation standard and clear labelling policy. At least half the Hybrids in viewer’s homes are not connected to a broadband router.

Which is good news for discs, of course; but one way or another the situation won’t last, if only because the industry has at least owned up to the existence of a problem.

This problem could of course be quickly solved by inviting all the Managing Directors and CEOs of the competing companies to Heathrow and locking them in a plebs’ Departure Lounge until they agreed a unified standard and marking system.

But the second best approach is being tried instead. Competitors are being scared by poor revenue into seeing what their shambling is costing them – with the likelihood that Apple will do what it did to the music industry with iTunes, by launching an Apple Hybrid TV system with VOD that does exactly what it says on the tin.

Recently I have lived with a Samsung Smart TV and Panasonic connected Blu-ray player and been to in-depth briefings with Panasonic and Sony; I’ve also sat through a series of presentations by industry pundits at a Summit meeting of the UK’s Digital TV Group, with Hybrid TV the theme.

It’s been a revealing experience. All the manufacturers have their own Hybrid systems and portals which give access to a ‘walled garden’ of services. What’s on offer is controlled by the TV set-maker, through tightly controlled ‘portals’ such as Sony’s Bravia Internet TV, Samsung’s Smart Hub and Panasonic’s Vieracast.

The services are continually being changed. The Hybrid TV or box automatically deletes some services and adds others before it offers any useful access. Using a conventional TV remote to enter a text search words, to find a movie title or YouTube clip, is infuriatingly awkward.

A Google TV box, due later this year from Sony, will use a remote control with easier cursor control and will bolt onto an existing TV (dumb or Hybrid) to make it work more like an Android smartphone or tablet – presumably offering location services that tell a living room TV where it is in the world.

Connect a treadmill to a Panasonic Viera smart TV and it will display Google maps and street views on the screen while you walk on the spot. So you can stay indoors and pretend to be outdoors.

Panasonic is now launching an Android smartphone that is tailored to work with Viera smart TVs. Holding the phone within Wi-Fi range of the TV and swiping the phone’s touch screen transfers pictures from phone to TV, or vice versa. Swiping also throws a Google search page from the phone to the TV, or sends whatever is on the TV screen to the phone screen.

The TV displays a panel of tweets or Skype video calls down one side of the screen. But as Paul Gray, Director of TV Research for industry analysts DisplaySearch, reminds: “Controlling a TV screen that’s four metres away – and you can’t touch – is hard.”

Speaking at the ‘TV bites back’ industry debate held recently by the Westminster Media Forum, Matt Millar of Tellybug (the company behind the ‘clapometers’ for measuring audience reaction to competing contestants) put it more bluntly: “A TV set is the best screen for output but it’s the worst for input. I will guarantee that the TVs that use a mouse-like cursor for inputting commands and text will all fail.”

“If Connected TV is ever to become mainstream, manufacturers must go back to basics,” Daniel Danker, the ex-Microsoft General Manager of the BBC’s iPlayer catchup TV service, told the DTG Summit. “Currently it’s far too complicated. iPlayer gets four times more traffic from the iPad than Connected TVs, even though there are twice as many TVs as iPads. It’s much easier to access iPlayer with an iPad than a TV remote control.”

Danker then described how he had spent six hours over three days on long distance phone calls to his 67-year-old mother helping her make a new Connected TV connect. “What is WEP and what is IP and why does my new TV need a firmware upgrade?” she was asking as error messages kept appearing on the TV screen.

Don’t you just love the way Microsoft people discover the value of user-friendliness the moment they leave Microsoft?

A string of speakers at the Summit echoed Danker’s comments and told how customer confusion is deterring viewers from connecting their Hybrid TVs.

New platform provider Connect TV exploits features of the DTG’s latest Version 6 D-Book standard to let a Hybrid TV access online streaming channels by using ‘Logical Channel Numbers’. Channels listed in the broadcast EPG can control 45 extra online channels including VOD.

“But there is currently no way for consumers to know whether a Connected TV meets the D-Book standard, or can be firmware-upgraded” warned Jonathan Marshall of Connect TV.

Nor are there yet any firm plans for a cross-industry marking scheme, comparable to tin labels like VHS, CD, DVD or iTunes.

Oh, dear. I fear the market is ripe for another Apple land grab.

“I am excited to help steer the DEG Europe in 2012 as we look to tackle key issues including digital supply chain optimization, helping our members to navigate the evolving home entertainment ecosystem, and developing our members’ understanding of changing consumer behaviour,” said Pearcey. “The Digital Entertainment Group Europe is uniquely placed to benefit the home entertainment sector as its remit encompasses the entire sector, as it’s pan-regional.”

In addition, the DEG Europe welcomes HBO Home Entertainment International, the leading television entertainment content maker, AGI-Shorewood, a leading global special packaging company, Rovi Corporation, a global leader in digital entertainment technology solutions, and Deloitte, the professional services firm, to its membership.

“I’m pleased to see the DEG Europe represent a broad cross section of the industry and continue diversifying its membership,” added Beardsworth. “With many exciting initiatives afoot, I am excited to have the opportunity to drive these projects forward alongside Nicola, and all of our members over the next year.”

At this year’s PEVE event, which takes place at the British Museum in London on March 27 and 28, DEG Europe will host two live consumer focus groups exploring the changing ways people are enjoying entertainment both in, and out, of the home. The ‘Putting The Consumer First’ and ‘What’s It Really Worth? sessions will look for candid insights around how mobile devices, subscription services, new smart technology and social media are changing what viewers want – and what they’ll pay for.

www.degeurope.com

The findings were reported in Home Media Magazine, which says that the data mirrors its own research, including the fact that 26% of total disc sales ($42.1 million) revenue came from the high-definition format for the week ended March 10.

Interestingly, the number of households with a DVD player increased 4% to 91% in the period, compared with 87% in the previous year. DVR (digital video recorder) usage is also up, as is HDTV penetration. "This shows that U.S. households continue to purchase a broad range of technologies," Bill Beaumont, president of Centris, was quoted as saying.

www.centris.com

• Personal computers are still the primary display device for viewing videos from the internet
• North America is the early leader for hybrid TV households, but the UK, France, and Germany are coming on strong, and most of Europe will have hybrid services by 2016
• Europe's Hybrid Broadcast Broadband TV (HbbTV) service will begin to gain dominance by late 2013
• Europe will become the worldwide centre of excellence for long-term development of hybrid TV services.

Whether someone likes a simple, classic package or a crazy, special effects offering, this year’s Grammy nominees for packaging have it all. Bill Freimuth, Vice President of awards at the Recording Academy comments that the good news is, “I am so impressed by the nominees this year. People are not ready to give up packaging!” That seems to be true in all music genres with offerings from both major and indie labels with artists like Sting, Bruce Springsteen and Watch The Throne to Chickenfoot and Reckless Kelly.

The Grammy label itself sets the bar high with their own special package highlighting many of the artists that are nominated. The annual Grammy Nominees package is released approximately one month before the awards presentation. Leslie Lewis, Producer, Grammy Recordings (and owner of Leslie Lewis Consulting) helped start the label for the Academy and has been involved with every Grammy album cover since at least 1995.

The Grammy award, which is a Gramophone, is on the CD cover each year. The 2012 offering is gold foil embossed. The Gramophone picture is raised as is the word Grammy, and there is some other embossment in the design along the outside. “It’s always been about creating something that resembles the gold standard of music, the best of what there is. It’s an encapsulation of the best of the year,” says Lewis.

The real challenge here, however is that the Academy only has about 12 days to put this CD together. In November, the Academy sends the O-card to the printer, which is MPS. A hole is cut where the nominees’ names are to be placed. Once the nominees are announced, Lewis says she prays there is enough room for the names. Since it is such a rush over Christmas, no special processes are allowed on the inside. The music is, of course, available on iTunes, as is the booklet.

However, “Consumers seem to love this record and buy it every year. I think once they’ve seen it and bought physical, they continue to buy physical which implies value. Art has always walked hand in hand with music and the art here is the culmination of this experience, and imagination,” Lewis believes. The thought process behind the Grammy package is most likely true for all packaging. “Creating the Grammy package is about ‘feel.’ We don’t want to get so creative that we are missing the boat, and get so creative that the consumer doesn’t know what this is,” says Lewis.

WHAT IT TAKES

How does a package get nominated for a Grammy anyway?

Freimuth explains: “A package is submitted to us, we never reach out. These particular categories are judged through our crafts process.” Potential nominees are judged by the Academy’s 12 chapters. Many times the chapters will display the nominees in their offices so that voters can look at them in person. “We ask the chapters to focus on artistic creativity. They are supposed to judge the overall design, photography or graphic art. It’s the entire package that’s nominated, and that includes any material that is on the inside.”

Best Recording Package nominees include: Chickenfoot III, Todd Gallopo, Art Director (eOne Music]; Reckless Kelly’s Good Luck & True Love, Sarah Dodds & Shauna Dodds, Art Directors [No Big Deal Records]; J.Viewz’s Rivers And Homes, Jonathan Dagan, Art Director (Jorjia Music); winning package Arcade Fire’s Scenes From The Suburbs, Caroline Robert, Art Director [Merge Records]; and Jay-Z and Kanye West’s Watch The Throne, Virgil Abloh, Art Director ([Def Jam].

Nominees for Best Boxed Or Special Limited Edition Package include: Radiohead’s The King Of Limbs, Donald Twain & Zachariah Wildwood, Art Directors [ATO Records], Bruce Springsteen’s The Promise: The Darkness On The Edge Of Town Story, Dave Bett & Michelle Holme, Art Directors [Columbia Records]; Danny Elfman and Tim Burton’s 25th Anniversary Music Box, Matt Taylor amd Ellen Wakayama, Art Directors (WB); Sting’s 25 Years, James Spindler, Art Director [A&M Records/Cherrytree Records/UMe] and Wingless Angels - Deluxe Edition, David Gorman, Art Director (Mindless Records, LLC].

Todd Gallopo, owner of Meat and Potatoes, designed Chickenfoot III. The concern for him was budget; the band had no label. A second consideration had to do with the concept of the package. While the band, (Sammy Hagar, Joe Satriani, Michael Anthony, Chad Smith) was looking at creating something in 3D, “I wanted to look at every lenticular; every kind of new technology. I wanted to mix old school and new school. That’s what the guys love.”

Gallopo said he went back to “Old tricks; old 3D glasses. I started to explore red and blue cancelling each other out in order to make the cover change from a roman numeral three to the logo of the band.” They shot 3D video and did the still pictures with a regular camera. Forty-five second videos were edited of each band member. Inside the package there are four trading cards with questions Gallopo asked each member and the funny answers they gave. There is a QR code that can be scanned with a smartphone. 3D footage of that front photo is on the card. When the user puts on the 3D glasses, that photo turns it into a vignette of the band goofing around.

John Cote, Vice President of innovations and manufacturing technology at MPS, says that the Chickenfoot package did offer some challenge. “We’d never really done anaglyphic separation before. At the end of the day, we had to invent a proprietary prepress technique because the way that these things are separated it took a lot of trial and error to get it right. The big problem with an anaglyph in a print world is when you are trying to convert everything to CMYK and a four-colour process. Ghosting occurs. Ghosting is a little fade of the image when you are looking through the glasses. We did some manipulations on the prepress side, and threw things out of focus on certain tones to make that ghosting go away.”

The other key element for the Chickenfoot package had to do with matching the exact colour and shade of the glasses themselves so that when someone looks through the glasses with both eyes they get the desired effect. Matching the gels was a key element to make that work properly.

SPINNERS AND COUTURE

Once again with Good Luck & True Love by Reckless Kelly, budgets were a great concern, according to Art Directors, Sarah Dodds and Shauna Dodds, owners of Backstage Design Studio. This was the first album to be released on the band’s own label. The band is famous for their live shows. They wanted this album to feel and sound like their live shows, simple, according to Shauna Dodds. “When we came up with the packaging we wanted to embody that as well. We had several tracks to listen to while we were brainstorming. The band had an idea for this package, but we started playing around with it and the guys were open-minded.”

Sarah Dodds explains the ideas behind the package: “The thought was to run with the vintage silent movie damsel-in-distress-train- barrelling-down-the-tracks mood and then to combine that with a tie-in to the ‘Good Luck’ motif of the fortune wheel and side-show graphic style.” The hand spinner on the CD was a huge challenge that worked because, she says, Crystal Clear’s John Cocke, bent backwards to make it work.

In Cocke’s opinion, “Shauna had a great vision for the onset of this project, she just needed help making it a reality; particularly her idea to include an interactive ‘spinner’ as part of the package. What a great idea! But a challenge to make it work as we had to consider the right shape and size to fit over the CD hub, the correct material that would be durable and hold an even, quality print, the weight of the piece so it would ‘spin’ properly, and of course we had to do all of this at a cost that made sense and did not completely blow the budget! But in the end, after several months of back and forth, several templates, sizes, shapes, Shauna and I worked together to create the perfect piece.”

On the other side of the spectrum, with a huge budget, is Watch the Throne by Jay-Z and Kanye West. That packaging was over the top. Even the disc was special: it was black, not standard in CD packaging. Melissa Lazarus, Vice President of sales at MPS, was a big part of the creative team. She describes the package designed by Givenchy’s Riccardo Tisci. When the package is opened, it becomes a cross. It looks like it is gilded; meant to look like it is gold. All five panels of the package are embossed with Tisci’s pattern.

“They wanted the embossing to look embroidered and the artwork on the inside to look like it was painted... it’s couture! Like most of Kanye’s packages, which I have worked on, they are all challenges. Stressful, but so satisfying! This time, we started with the wishes and dreams of a designer who is not familiar with the music industry and our challenge was to create something we could manufacture which we did. We really work as a team.”

SIMPLE TO EXOTIC

Moving along to the deluxe packages, they too, run the gamut of simple to the exotic. Wingless Angels, which features Keith Richards, was released on the band’s own label. Art Director, David Gorman (and owner of Hackmart Inc) comments, “When hired, I was told Keith Richards wanted the package to feel handmade – like the music, which sounds like a field recording done in Jamaica.” The resulting package is a hemp-wrapped tri-fold with hand stitched edges and Lion of Judah on the front. Inside the tri-fold are two CDs with a leather bound 32-page book featuring vintage and contemporary interviews with Richards as well as rare photos.

Simple, yet on a major label is James Spindler’s design for Sting’s 25 Years. “The thinking behind this packaging was to acknowledge Sting’s stature as a solo musician for 25 years,” says Spindler who is the Chief Creative Officer at @Radical Media. The experience is like a book which offers an insider look at Sting’s creative process including handwritten lyrics, contact sheets and more.

“The intent was to differentiate from a simple commercial fan book and instead put a personal, intimate lens on his career. The photograph on the cover is a shot from behind. It’s a great way of representing Sting in a way that is not commercial. It’s a very personal look at who he is,” comments Spindler. “I believe this package was nominated because of the depth of content. As an artist, Sting is so poetic and articulate. We designed the package around what his message is, instead of obscuring it around special effects.” [See article on page 24 of issue 15 to read about the Sting 25 app.]

Danny Elfman/Tim Burton's 25th Anniversary Music Box is the polar opposite of Sting’s package. It was a limited edition set, now sold out, which retailed at $495.00. It offers more than seven hours of music from the 13 scores from the duo’s collaboration. Teri Eastwood, of AGI-Shorewood, worked closely on the custom package.

“The box is made out of wood with embossed tin plates. The zoetrope, which is a device that produces an illusion of action from a rapid succession of static pictures, is supposed to be like something you would find in your grandparents’ attic. The package includes 12 film strips of artwork that mostly were created by Danny. They shot original images of Danny’s head spinning around. When you put that film strip in the zoetrope, you can see his head get smaller and bigger and his eyes popping out.”

Also included in the Elfman/Burton package is a sound chip embedded into the lid. When the button is pushed an original Danny Elfman song plays. That chip was a bit of a challenge, says Eastman, because customers wanted to be able to change the battery, and that wasn’t in the original plan. Also, included in this ‘Direct to Consumer’ box is a 264 page casebound book with a foreword written by Johnny Depp and a skeleton key USB containing the MP3 files.

Winner in this category, Bruce Springsteen’s The Promise: the Darkness On The Edge of Town Story, was designed by Dave Bett and Michelle Holme. This collection represents Bruce Springsteen’s never-before-seen writing, editing and rough ideas for the Darkness on the Edge of Town album. It is based on the actual notebook that was used during his original recording sessions. According to MPS, “this project first appeared to be the printing and production of a simple notebook. It quickly became a unique structural and aesthetic challenge. It was 30 months in the making. Translating the designer’s vision into reality meant selecting the right materials, structure and blend of production technologies.

“Five capacity pockets were customized by our designers to hold the jackets while maintaining a layflat profile. The package was composed of the spiral notebook, rigid slipcase, four mini jackets, one gatefold jacket and a lyric book. It took 10 different materials including paper, paperboard, Hyflex cover stock, wire and chipboard, and the coatings combine with graphics to create the illusion that the yellowed tape and torn photographs are real.”

For all those nominated, congratulations, but perhaps congratulations should also go to the consumers who, designers say, realize, despite all predictions, that packaging is key to a full fan experience.

www.grammy.com

Theft of software for personal computers leapt 14% globally in 2010 to a record commercial value of $59 billion, the Business Software Alliance (BSA) reported last May in the 2010 BSA Global Software Piracy Study. That amount has nearly doubled in real terms since 2003, with emerging economies the driving forces behind the trend, the report finds, because that is where PC shipments are growing fastest. Those markets were responsible for less than one-third of the total in 2003, and more than 50% in 2010.

In the US alone, Intellectual Property Rights (IPR) seizures for media totalled $12.681 million [at retail value] in 2010, a 15% increase from 2009, with figures from DHS, CPB and ICE. Media includes motion pictures on tape, laser disc, and DVD; interactive and computer software on CD- ROM, and floppy discs; and music on CD or tape.

Peter Beruk, BSA Senior Director of Compliance Marketing, tells D2D, “Data shows that worldwide, 42% of all software – business, music, movies and games – is pirated. But, often, businesses and consumers may not even know they are using illegal software – which makes the problem of piracy hard to solve. A report by industry research firm IDC also found that 25% of 100 sites selling pirated goods offered software with malware, which can expose businesses and consumers to risk including viruses and data breaches.

“Education is key in helping software users not only understand the value of IP, but also when they may be inadvertently breaking the law by stealing that IP. Programs such as software asset management (SAM) can be extremely effective in helping all IP users understand the rights, obligations, and benefits of licensed software. Certification programs like SAM Advantage and our new CSS(O) program – Certified in Standards- based Software Asset Management for Organizations – can be extremely effective.

“Software piracy penalties can be substantial. Citing just two from 2011, the largest settlement is out of Japan which resulted in a penalty of $5.7 million. In the UK, fines and damages in one matter exceeded £33,000 (US$51,800).”

Last October, BSA, represented by President and CEO Robert Holleyman, and India’s Department of Information Technology, unveiled details of a collaborative effort to strengthen the country’s IT ecosystem by promoting proven best practices that enterprises of all types and sizes can adopt to better manage the software tools they use to run their operations. Included is a systemic approach to complying with copyright laws, with the implicit goal of anti-piracy prevention.

Also contributing to the ongoing battle against physical and digital piracy are IFPI (International Federation of the Phonographic Industry), MPAA (Motion Picture Association of America), BPI (British Phonographic Industry), RIAA (Recording Industry Association of America) and CDSA (Content Delivery & Storage Association).

MUSIC AND MOVIES

“IFPI represents the recording industry worldwide,” explains Jeremy Banks, Director, IFPI Anti Piracy Unit, “with a membership comprising some 1,400 record companies in 66 countries and affiliated industry associations in 45 countries.

“Physical piracy is still with us,” he emphasizes, “although the internet challenge is impacting these losses. Our focus has been to work with law enforcement groups, including Customs, on training to identify suspect products. We still see street vendors in major cities, and flea markets are ongoing, although their movie, music and game trade has also been impacted. A good example of law enforcement co–operation involves a December raid on a cybercafé in San Nicolas de los Garza, Mexico. Resulting in the seizure of computer equipment and blank CD-Rs and DVD- Rs, it was carried out by a federal prosecutor and investigators, the Mexican Army and industry anti- piracy experts from APCM, the joint Mexican music and film industry anti-piracy body, working with our IFPI local national group Amprofon.

“At the same time, our member companies are developing their own digital models as their opportunity for physical sales has diminished. Box sets for music, movies and even games were big sellers this past holiday season, but counterfeit knock-offs were much in evidence. Pirates in the physical arena exploit legitimate product and with competition from better download products, come up with higher quality counterfeits as equipment improves.

“This convergence of physical and digital products – a legitimate looking website selling legitimate-looking product but actually counterfeits – is Masterbox. This high end site offers physical movie and music box products – in Belgium, the Netherlands and elsewhere, but manufactured in Eastern Europe – using digital content to feed physical distribution.”

“Physical music piracy costs the record business more than £100 million per year – a significant percentage of industry revenue,” notes David Wood, Director of the BPI Anti-Piracy Unit. “Building on the 2009 restructuring of the unit in response to the increasing scale and complex nature of the illegal digital music landscape, 2010 was the most successful year to date. That year, the Unit notified for takedown over two million infringing files and links – a three-fold increase from 2009 – and has seen a significant reduction year on year in UK- hosted DC++ file sharing hubs – from 150 in 2008 to only 24 in 2010. In addition to this, we have been involved in successful major prosecutions of sellers of physical discs, file sharers and a company trading in unlicensed jukeboxes.

“In 2011, 520 member enquiries were processed leading to 303 raids by UK law enforcement, with more than 140,000 CDs and over 16 million digital tracks recovered.

“Within the APU, we strengthened the Internet Investigations Team to include three Investigators, one Developer and an Automated Crawling Specialist who work together to protect the repertoire of BPI, PPL and AIM (Association of Independent Music) members."

"Piracy is moving from physical CDs to online digital files just as legal sales have been trending in that direction,” Brad Buckles, RIAA Executive Vice President, Anti-Piracy, tells D2D. “But, just as physical sales are still a very large component of annual sales, physical piracy remains a serious if somewhat diminished problem. Excess production capacity at some CD plants has tempted them into the production of high-quality counterfeit discs, and low cost burner towers make burning pirate CDs an affordable business for others. These days our most significant problem in terms of sheer volume is Latin music piracy, but we still find virtually every popular album by every major artist replicated and sold in physical format."

“While digital music theft grabs headlines, millions of illegal music CDs are manufactured and sold in the US each year by street vendors, at flea markets and bargain retail outlets. RIAA has made available a downloadable ‘How to Identify Counterfeit Recordings’ brochure incorporating useful tips for consumers that has got extensive distribution to retail outlets, among other sites.

On the legislative front, California Governor Jerry Brown signed SB 550 last October. The new law, effective since January 1, allows inspections of CD and DVD replication plants to ensure compliance with anti-piracy laws and identify the CD and DVD plants responsible for pressing fraudulent discs.

SHIFTING FOCUS

There is a shift to digital distribution of movies,” Michael Robinson, MPAA Executive Vice President, Content Protection, Chief of Operations, explains. “All our studios and the global industry are seeing that shift, and developing legitimate online streaming systems for consumers to combat physical video piracy. In the US, the problem of IP theft of movies is getting better recognition from ICE and CPB, and we do a lot of training that is definitely paying off in major confiscations of illegal movies at TV shows.

“Some counterfeit movies and TV shows are imported and sold on websites with the look and feel of legitimate sites, with operations ranging from the US to Scandinavia, Russia, China and Asia. A lot of TV and movie box sets have their origin in China and we’ve been working closely with the Chinese government through our office in Singapore. This past holiday season saw the confiscation of thousands of counterfeit TV box sets including such popular shows as a 33-disc The Sopranos complete series, Lost, True Blood, The Office and NCIS, to mention just a few.

“We have programs in 37 countries worldwide, some as a minority or majority member of a federation, and in Asia as MPAA managed and funded operations. We have an MPAA US-based enforcement branch, plus a worldwide intelligence branch and internet group. We have shifted resources from one activity to another, with internet recovery of online hard goods and digital delivery site shutdowns now priorities. We’ve also expanded our focus on source theft. Over 90% of pirated content of movies in theatrical release is the result of someone going into the cinema and recording with a video camera. Despite new camera technology, in past five years we’ve cut that incidence in half.”

Commenting briefly on the pending SOPA (Stop Online Piracy Act) in the US House, and PIPA Protect IP Act) in the Senate, Robinson says, “The big challenge we have with SOPA and PIPA is that technology has changed dramatically and these new systems have to be governed by the rule of law. Downloading a movie from the internet is no different from walking into a video store and taking a DVD movie.”

CDSA EXPANSION

“There are now 71 facilities accredited within our Content Protection & Security (CPS) program, introduced in 2009,” reports Peter Wallace, long- time entertainment security expert who was named Worldwide Director of Anti-Piracy for the CDSA security auditing programs in January. He succeeded Linda Dyson who retired after serving the industry for over 15 years as a lead copyright and licensing auditor and respected industry spokesperson.

“Nine others are currently working towards this status,” Wallace continues. “We are seeing an increase weekly with considerable interest from areas such as Russia and the Ukraine, where Cinema Production Complex recently applied. Whilst a large proportion of accredited facilities are from post-production, we have a good proportion from replication with many of the 43 members of our Copyright and Licensing Verification (CLV) Program also joining CPS. One example is Sony DADC, which now has eight sites in our CPS program. We are in the process of updating our standard with a new revision scheduled for this April.

“There is much discussion within the motion picture industry regarding the MPAA best practices and our CPS Program. Analysis has shown us that the key aims are the same although the two offer different methods and approaches. CDSA operates an Accreditation Program across all media industries with a regular review process, whereas MPAA assesses against an end-point standard with prescriptive requirements for the motion picture industry. We are working with MPAA to further harmonize the aims of both for the industry benefit.

“Several years ago representatives from the movie, music, software and games industries made CDSA aware of the redundancy and waste caused by the large number of fragmented supplier content security assessments. This led to a joint venture with leading game publisher Electronic Arts to develop a low-cost, transparent and efficient Enterprise Risk Management Tool (ERMT): a web-based, vendor assessment database with a web-based user interface for vendor management.

“Developed by EA, it enables content holders and their vendors to work seamlessly through on- and off-site assessment checklists, vendor data, checklists and audit results, CDSA accreditation status, vendor policies and procedures, security incident and corrective action records and security risk assessment results can be accessed and shared through this tool. ERMT continues to undergo Beta tests by Warner Bros Studios, Fox Entertainment Group and other industry vendors, with hopes it will be available to the industry by year-end 2012.”

Physical and digital piracy and counterfeiting of business and entertainment software is a continuing problem, but working together, industry trade associations and law enforcement, are making inroads in the global marketplace. The next issue of D2D will detail how anti-piracy solution vendors are improving their anti-piracy product offerings.

www.bsa.org
www.ifpi.org
www.mpaa.org
www.cdsaonline.org
www.bpi.co.uk
www.riaa.com
www.musicindie.com
www.ppluk.com

With an emphasis being placed on ‘Buy Once, Play Anywhere,’ and a strategy involving content ownership rather than rental, members of the Digital Entertainment Content Ecosystem/DECE continue to develop a number of key strategies that will encourage consumers to use UV licences across a variety of delivery mechanisms. DECE is a consortium of major Hollywood studios, CE manufacturers, retailers, video-service providers, network hardware vendors, systems integrators and digital rights-management vendors.

While last Autumn’s soft launch centred around 19 UltraViolet titles via DVD and Blu-ray discs from Warner Home Entertainment Group, Sony Picture Home Entertainment and Universal Pictures – plus a European launch during late December in the UK with Warners’ initial release of Final Destination 5 – several strategic developments unveiled at the recent CES Convention in Las Vegas were intended to increase consumer awareness. Amazon announced that it had signed a deal with an unnamed major Hollywood studio for electronic sell through/EST rights – which include UV licences – while Netflix decided to withdraw its membership from DECE, at a time when the consortium revealed more than 750,000 US households had opened UltraViolet accounts.

A single-household UltraViolet account enables up to six family members to use a maximum of 12 UV-licensed devices to downloaded files; a maximum of three simultaneous streams per account are supported, enabling users to share UltraViolet digital libraries with other members of the account, and view the same title simultaneously from different locations. UltraViolet availability within other territories, including Canada, France, Germany, Ireland, Japan, Northern Europe, Australia and New Zealand, is planned.

VALUE PROPOSITION

“We are anticipating and planning for an exponential growth of the user base in 2012,” DECE General Manager and Executive Director Mark Teitell told a CES press conference. According to Teitell, hundreds of UV-licensed titles are scheduled for release in 2012. “The consumer value proposition will only strengthen as the availability of UltraViolet content expands and more retail outlets, apps and devices come on-board. As consumers begin to build digital libraries and take advantage of this open and interoperable platform, they will increasingly benefit from the convenience, choice and flexibility that UltraViolet will deliver to the home-video market.”

“We are at the forefront of the digital ecosystem being formalized,” added Mike Dunn, President of Fox Home Entertainment, and another DECE member. “[Consumers] have wide access among multiple service providers,” with an ecosystem for which “mass consumer adoption could come in the fourth quarter [2012].” “We haven’t been closely involved with DECE before,” Bill Carr, Amazon’s EVP of digital media, told the CES audience, “but we have been big advocates of the concept of a digital locker,” with consumers accessing their content on multiple devices via the cloud.

“As the roll-out expands globally,” Teitell affirmed, “additional geographic launches will benefit from the experience and data we are gathering through our US and UK deployments.”

It has been suggested that Netflix’ decision to pull out of DECE centres around the operation’s streaming-rental business model, whereas UltraViolet is being targeted strongly on content ownership. And while Amazon remains committed to DVD and Blu-ray sales, and plans to continue rental of online movies, the retailer also plans to make ownership easier for digital consumers. Carr cited the example of Amazon’s subscription-VOD service combined with disc rental available within the UK from Lovefilm. (But leading UK retailer and DECE signatory Tesco still has not formally endorsed UltraViolet, supporting instead a digital locker scheme developed in conjunction with its blinkbox subsidiary.)

TITLE ROLLOUTS

Sony Pictures was among the first three movie studios to offer UltraViolet product, with more titles scheduled for the coming quarter; January releases included Moneyball, Courageous, The Ides of March and Drive, with Monty Python and the Holy Grail scheduled for early March.

“We see UltraViolet as a natural extension of digital rights, beyond siloed delivery services,” offers Rich Berger, Sony Pictures Home Entertainment’s SVP of global digital strategy and delivery. “Using a secure, interoperable consumer-rights locker, the open-standard format supported by 75 members of the DECE consortium can be scaled to offer a number of choices for consumer viewing. UltraViolet adds value to Blu-ray discs, which then fulfil electronic sell- through of a streamed or downloaded file.”

Collectively, Sony, Universal, Warner and Paramount are expected to release multiple UltraViolet-enabled titles during 2012, including new releases, catalogue offerings and TV shows.

“As an entirely digital product, UltraViolet is totally appropriate for online delivery,” Berger states. “2012 will be a watershed for UltraViolet, with additional sales channels, more content and support of additional consumer devices. This year will be the tipping point for the way in which we consume digital media.” Eventually, it is expected that retailers will offer UV rights for dollars per title, at cost points similar to Apple’s iTunes-enabled deliveries.

DISC TO DIGITAL

During CES 2012 both Samsung and Panasonic unveiled UltraViolet functionality for Blu-ray players and TVs. Samsung’s Smart Blu-ray will include a ‘Disc to Digital’ feature co- developed by Flixster and Rovi Corporation that enables consumers to secure UV licences for existing Blu-ray and DVD collections from participating vendors, and hence viewable via cloud- based download and/or streaming on mobile and fixed devices.

The planned service initially will be available using a new Flixster app running on the Samsung Smart Hub to authorized retail services. Inserting an eligible BD or DVD will enable the application to add the targeted asset to a consumer’s UltraViolet cloud account for a fee to be determined; HD versions of standard-definition DVD movies also are planned.

Once digital copies have been created and added to the consumer’s UltraViolet collection, the content will be available through the custom Flixster app for Smart Hub, as well as a broad range of mobile and portable devices plus PCs and Macs. According to Adam Powers, Rovi’s VP of technology, “Disc to Digital uses our Digital Copy white-label solution, which integrates into CE devices as well as PC applications to allow them to recognize a movie on a physical disc, authenticate its origin and then trigger access to a copy from a cloud-based digital library.”

Flixster considers that the new UV licensing feature will help users future-proof their existing DVD libraries. “[Consumers] will no longer need to worry if a DVD is misplaced or scratched,” states Flixster President Steve Polsky. “Through UltraViolet, consumers can collect, access and enjoy digital entertainment; they can take movie and TV collections with them and watch [clouds-based streams] when and where they want.” A wholly-owned subsidiary of Warner Bros Entertainment, Flixster is said to deliver content to over 25 million consumers per month.

A new generation of Panasonic Viera Connect TVs and Blu-ray players will also include a Flixster-developed app that offers similar functions to Samsung’s latest offerings. Viera Connect will let owners of enabled HDTVs, Blu-ray players and home-cinema systems access a range of internet-based VOD content without external components or a PC/Mac. “Panasonic’s singular focus is to deliver an extremely robust and interactive connected TV experience that can be customized and enjoyed on their large-screen HDTVs,” says Merwan Mereby, Panasonic’s VP of interactive content and services.

Following Paramount’s mid-January launch of UV-licensed streaming and downloadable assets with the Blu-ray release of Paranormal Activity III, at month’s end the studio unveiled an online portal for selling UltraViolet movies without purchase of a physical disc – an industry first. Initial US costs are $19.99 for an HD version of the target movie, and $12.99 for an SD version, prices higher than typical DVD and BD media. Other media operations, including Fox Entertainment and Lionsgate, are expected to offer UV-licensed material during coming months. Walt Disney Studios still remains a UV holdout, concentrating instead on finalizing its own DSAA Experience streaming and file- delivery service, formerly known as Keychest, while Apple continues to support and evangelize its proprietary iTunes portal.

TECHNOLOGY SOLUTIONS

However, accessing UV-licensed assets for streaming or download is not without its own nherent complications. Most consumers currently are using Flixster apps on Android/iOS smart phones, tablets, PC and Mac computers to access such media, but soon discover that because of in- development authorization links, Paramount UV titles cannot be accessed directly; instead, the user needs to log onto the studio’s dedicated UltraViolet download website, where files can also be accessed for offline viewing on laptops and desktop PC/Macs but currently not to iPhones or iPads. It is expected that such anomalies will be addressed in the near future. (And currently UltraViolet movies can only be viewed on iOS-capable devices in SD mode; HD capabilities might be offered with Apple’s promised iPad 3 tablet.) It is suspected that Warner’s ownership of Flixster might explain why some movie studios are disabling the streaming service; again the smart money is suggesting that such studios will develop proprietary apps for Android- and iOS- capable platforms.

Several business-to-business firms within the DECE consortium are offering technology support to enable the pipeline of consumer- facing launches with products and services that will support the UltraViolet ecosystem, including platform and distribution white-labelling providers such as Akamai, CSG Systems, Neustar Media and Rovi; companies developing media players and related technologies for the forthcoming UltraViolet Common File Format/CFF include CastLabs and DTS. CastLabs supports UltraViolet-compliant cloud portals with authoring tools for CFF, a download service (DSP), a DASH-based streaming service (LASP) and an Android-based video player.

In terms of audio-encoding schemes for UltraViolet, the delivery of streamed and download files to mobile devices at variable bit rates poses a number of technical challenges. While UV only mandates AAC-format audio soundtracks, DECE member DTS offers a number of audio- compression schemes from stereo to 7.1-channel soundtracks.

“Together with Digital Rapids, a provider of tools and solutions for delivering digital content,” says David McIntyre, VP of corporate strategy and development at DTS, “we have developed a series of tools to support UltraViolet. DTS- HD MediaPlayer enables premium QC playback of DTS-enabled content for UltraViolet; key features include support for multiplexed UV files and streams for broadcast, IPTV and over-the-top markets.”

“Multi-screen viewing and the increasing volume of digital content are driving fundamental shifts in the way media is distributed and consumed,” says Digital Rapids President Brick Eksten. “UltraViolet will play a crucial role in unlocking the potential of multi-screen media consumption.” Powered by Digital Rapids’ Kayak application platform, Transcode Manager 2.0 supports the creation of MP4 and CFF output files featuring DTS-encoded audio for online access and file-based delivery.

To streamline the delivery of UV media from additional online retailers, Rovi Corporation is developing web-based portals with transaction and licence accreditation via white-label store fronts that can be custom tailored with the client’s branding and UV-delivery logos. “We’re supporting Flixster for their UV delivery with our Rovi Entertainment Store backend,” says Mark Hollar, VP of product management at Rovi. “In addition to offering design harmonization across different vendors, we can also support other business models for large-scale vendors, such as Comcast and Best Buy.”

Neustar Media, a provider of network and digital-media interconnectivity solutions, was selected by DECE to build and operate the UltraViolet technology infrastructure that supports account management and tracking/authentication of UV rights in consumers’ digital libraries. The firm also provides other UltraViolet services, including modular, scalable and white-label solutions for UV retailers and service providers.

“Using our white-label service, known as ‘Catalyst’ network APIs, we can offer a seamless way to integrate UV content into a non- UltraViolet environment,” says Tim Dodd, Neustar Media’s VP and General Manager. “Our white-label format can be custom designed with client user interfaces to create proprietary electronic-sales solutions, with identity management, single sign-on and other functions. Multiplatform support across PCs, smart phones and tablets is essential for today’s fully integrated UltraViolet environment. We support multiple DRM schemes, including OMA, CMLA-V2, PlayReady and WideVine.”

Dodd identifies key advantages to the planned use of CFF to deliver UltraViolet in addition to content creation and asset delivery within business-to-business liaisons. “A single encoding process will offer economic savings for content creators and deliverers,” he states. “We will see a flattening of ingest and encoding through the use of UltraViolet Common File Format,” which is expected to be in use by mid-2012.

CFF will let consumers move or copy UltraViolet downloaded files among UltraViolet-compatible media player apps and devices. While current downloaded files are not in Common File Format, owners of such titles will be entitled to implement to three downloads of the more-portable file type when it becomes available; CFF will also enable users to copy or move files via USB drives, a Wi-Fi network, DLNA, etc.

FUTURE AVENUES

“UltraViolet’s design,” Teitell explains, “includes business and technical provisions for a single discrete physical media copy that a consumer can use to move playable content onto a medium that is not an UltraViolet- compatible app or device.” The most common implementation will be to allow consumers to make a DVD copy, along with the download/streaming rights they receive, but other provisions exist for media such as secure Flash.

“As retailers roll out UltraViolet services this year, we expect to see this ‘+ a DVD copy’ UltraViolet SKU offered alongside digital download/streaming-only ones. We believe this will bring another type of added portability for consumers, via backward compatibility to the very large number of DVD players out there.” Market forces will determine possible future avenues for UltraViolet, Teitell offers. “Just as roaming services for mobile phones are now part of a single phone bill, and we can access ATMs across different bank branches, the ubiquity of accessing UltraViolet media by family members will be seamless across multiple devices,” he says.

With a number of key developments scheduled to come on-line during the coming several months – and an extensive marketing campaign underwritten by both the DECE and Digital Entertainment Group/DEG planned for summer and fall 2012 – UltraViolet looks set for a successful future. “Complaining that we do not have all of the elements in place and that UV will not reach its potential is like calling the Monaco Grand Prix after the first lap,” concludes Neustar Media’s Dodd.

www.akamai.com
www.csgi.com
www.digital-rapids.com
www.dts.com
www.neustarmedia.biz
www.rovicorp.com
www.uvvu.com

The major Hollywood studios are behind the move, which will start on April 16th in more than 3,500 stores, when Walmart customers will be able to bring their DVD and Blu-ray collections to Walmart and receive digital access to their titles from the partnering studios. An equal conversion for standard DVDs and Blu-ray discs will be $2. Standard DVDs can be upgraded to high-def for $5.


“Walmart is helping America get access to their DVD library,” said John Aden, executive vice president for general merchandising, Walmart US. “Walmart Entertainment’s new disc-to-digital service will allow our customers to reconnect with the movies they already own on a variety of new devices, while preserving the investments they’ve made in disc purchases over the years. We believe this revolutionary in-store service will unlock new value for already-owned DVDs, and will encourage consumers to continue building physical and digital movie libraries in the future.”

“Consumers today want new and flexible ways to enjoy movies and Walmart’s disc-to-digital program will be another important avenue to introduce Paramount movies on this new platform to a broader, more comprehensive audience,” said Dennis Maguire, president, Worldwide Home Media Distribution, Paramount Pictures. “The unmatched reach of Walmart – which serves over 140 million consumers every week – means we can quickly grow awareness for this unique technology throughout every region across the country.”

“Never before have consumers been able to add value to their existing collections so easily and economically as with Walmart’s disc-to-digital conversion service,” said David Bishop, president, Sony Pictures Home Entertainment. “Disc-to-digital will be a milestone through which Hollywood and Walmart are finding ways to create even more value for consumers.”

“With Walmart’s new disc-to-digital service, there has never been a better time to own movies,” said Simon Swart, executive vice president and general manager, North America, Twentieth Century Fox Home Entertainment. “There are more than 100 million households in the US that have an existing DVD or Blu-ray library. It is now possible to digitize those movies conveniently and enjoy the benefits that ownership gives at home or any place you go.”

“Walmart’s disc-to-digital service is a terrific consumer proposition, offering exceptional value, ease and convenience in preserving and enhancing consumers’ prized movie collections,” said Craig Kornblau, president, Universal Studios Home Entertainment. “Now, with the launch of this pioneering service, Blu-ray and DVD buyers are afforded both the opportunity and the affordability to future proof their movie collections and assemble their own digital libraries that can be easily stored and accessed through their own UltraViolet cloud for viewing anywhere, anytime.”

“Consumers want value and convenience and Walmart’s disc-to-digital service will deliver both while helping consumers realize the benefits of digital ownership,” Ron Sanders, president, Warner Home Video. “Between the heavy foot traffic in-store and the aggressive educational campaign Walmart is planning, this partnership is the perfect opportunity for us to reach a mainstream audience much sooner than by more traditional means, while making the process as quick and easy for consumers as possible.”

www.walmart.com

Game shows have been rife for interactivity for some time, but new forms of interactivity are dramatically expanding the scope of viewer participation in those shows. In effect, interactive elements are becoming more deeply embedded in those shows, and more diverse and dynamic interactive elements on game shows are increasingly resembling user engagement options offered by video games.

Perhaps one of the most distinctive viewer-driven game shows is Intuitie (Intuition), a play-along game show designed to test the viewer’s intuition, which ran for two weeks in October 2011 as a pilot during the daytime on RTL4 in Holland. The show, which was developed by Screenpop, a division of Fremantle Media, in association with Blue Circle, Fremantle Media’s Dutch production group, challenged viewers to answer questions during the course of a live TV show.

One of the key reasons for airing the show in Holland is that the country “has a fairly long history of running interactive premium-funded games on daytime TV, and is open to trying new formats,” given the “small audiences there,” explains Peter Cassidy, head of Fremantle Media UK Interactive and Managing Director of Screenpop. The show, which ran 30-45 minutes a day, emerged from Screenpop’s effort to “develop low- cost participation-based TV shows on the periphery,” as the company was formed to develop “alternative self-funded business models,” he notes.

Intuitie was designed to place viewers in the role of contestants, and to create a “low-cost interactive multiplayer game experience on TV,” according to Cassidy. Essentially, the show’s presenter invited viewers to participate via the show’s website or a mobile version of the site. The show focused on “intuition-based” questions rather than typical “trivia” questions. The show was particularly focused on the female market. The game was free to play, and viewers were awarded vouchers for low-cost products offered by online retailers. Screenpop received some revenue from redemption of the vouchers, Cassidy notes. The show “was very inexpensive to produce, running less than 5,000 Euros per hour in production cost,” according to him.

One of the great advantages of the show is that it allowed the program to be reshaped on the fly, as “statistics on viewer attitudes were fed back in real time,” Cassidy explains. As such, the show tapped into “the wisdom of crowds.”

Overall, response to the show was “very strong” and “grew over the two week run,” with “10% of the audience” participating in the show at the end of the show’s run, claims Cassidy.

At the same time, audience response to the program “wasn’t as high” as that for “normal programming.” It was found that the vouchers offered “insufficiently appealing 10-20% discounts” on products that were often considered by the audience “too low quality,” reports Cassidy. As a result, it was concluded that offering “50-60% discounts on higher- quality products would increase interest significantly in participating in the show.

Screenpop is in discussions with a UK broadcaster to develop an interactive game show for a longer run.

In summary, Cassidy believes “the jury is still out on self-funded participation shows on daytime TV,” and that “further experimentation is needed to make such shows viable.”

Another game show taking interactivity in new directions is Le Tricheur (the Cheater), which was introduced in January on TVA in Canada. Olivier Aghaby, the producer of the 30-minute show, was “seeking a new approach to the show,” and enlisted Moment Factory, a Montreal-based multimedia production company, to bring novel multimedia elements to the show through “video mapping, set design, and displays,” explains Vincent Pasquier, Director, Innovation and Technology at Moment Factory. The company was responsible for three key elements on the show: “set design, content development, and technical production,” he says.

The show, which draws “approximately one million viewers a day,” allows the studio audience to “vote live with a selecter” device, according to Pasquier. The studio audience is challenged to guess the “cheater” among the contestants. Selections made by the audience are then reflected in graphic and animated images to represent their choices, he observes.

The five contestants on the show are all celebrities, and are changed each week. Typically, 50 people in the studio audience participate in the show. Winning contestants receive cash prizes, which are then allocated to charities. All set changes are triggered by the show’s host, Guy Jodoin, using a multitouch table. He effects those changes based on “good and bad choices” of the audience. Le Tricheur utilizes Moment Factory’s own X-Agora multimedia software platform, which drives different multimedia elements, “including lights, sound, and video.” The show is set to run for “five years,” adds Pasquier.

He notes the high level of interaction on the show, and the “passion” the audience displays for interacting with the show, as they truly “become part of the game.” According to him, the use of “high quality graphics and animation” makes the show “more dynamic and colourful,” resulting in greater audience involvement.

www.screenpop.co.uk
www.tva.canoe.ca

Less than two years after the segment was established by the launch of the iPad, tablets are now clearly demonstrating a tremendous upsurge in consumer approval and uptake, with marketing activities quickly transforming a nascent technology into a ‘must have’ product. And with prices starting to drop to a level that makes them a discretionary purchase or premium gift, the market continues to open up; by 2016, shipments will exceed 185 million and more than 30% of consumers across the US and other advanced markets will own a tablet device.

The US continues to lead the way in tablet adoption, with an installed base of nearly 37 million devices at the end of 2011. Europe has seen a slower uptake, with an installed base of nearly 18 million at the end of 2011, though this still represents over 350% year-on-year growth.

Apple continues to dominate the global market, particularly in the US where the iPad currently accounts for over 70% of unit shipments, though Samsung, HP and Acer are beginning to gain some traction. Europe is more fragmented, with Apple still leading the way, but other brands are being able to capture share more easily, with the competitive landscape varying country by country.

A new entrant into the market, Amazon’s Android Kindle Fire, was launched in November at just $199 and has proved popular with consumers, shipping one million units per week in the run up to Christmas. With a 7-inch screen and no premium features, although categorized as a tablet device, the Fire is predominantly used as an e-reading device and could mount a serious challenge to Apple in the battle to control digital media and publishing markets.

Although tablets have some additive effect on sales and are being purchased alongside conventional PCs and Macs (70% of iPad owners ay they still have another primary computer), there has been cannibalization of the netbook market, which will intensify as prices continue to fall. Longer term, the market will evolve to include Ultrabooks (small, lightweight, high power netbooks with extended battery life) and hybrid netbook devices featuring detachable or foldable touchscreens so they can be used as tablets.

Futuresource carries out a regular program of consumer research, Living with Digital, which shows that users have embraced the mobility and versatility of tablets and the devices have quickly taken on a mainstream role for applications like e- mail, web browsing, Facebook and Twitter. In particular, the 9-inch to10-inch screen size is ideal for web browsing, video viewing and news page presentation, with the multi-touch screen allowing users to scan, zoom, drill down, or roll video and audio clips.

Responses from tablet owners and prospective buyers also showed a high degree of interest in music, video and gaming, as well as indicating that tablet owners use their devices for 2.5 hours a day, compared to just over one hour of internet usage amongst the general population. This demonstrates the proactive nature of early acquirers and creates an opportunity for content producers, pay-TV providers and broadcasters, who are levering tablets to add value for subscribers as a defence against incoming OTT competitors and encourage multi- service subscriptions.

At present, tablets are generating very little pay-TV revenue, primarily being used as tools to increase customer value and hence loyalty, but as we move forward, growing ownership levels may lead to standalone subscriptions. They are unlikely to widely displace primary large screen TV sets – which offer group viewing in high definition and 3D – though they will be pivotal in the second screen revolution and will also be used to push content from the internet to the TV screen.

Tablets are also revolutionizing the world of news publishing with digital editions and, together with dedicated e- Readers like Amazon’s Kindle, are starting to drive a shift away from paper into e-books, with apps from every major publisher available for iPad, and, increasingly, Android devices. Most newspapers have now also implemented ‘pay walls’ and are linking digital subscriptions with online access to website content, effectively creating ‘interactive multimedia newspapers’.

Looking to the immediate future, the emergence of major sporting events in 2012 is expected to fuel an additional rise in the uptake of tablets as consumers demand connection while away from home to view TV content or keep on track of results. When compared with a smartphone, the tablet’s size and features also mean that consumers can enjoy a higher quality viewing experience.

Long-term prospects for the tablet industry remain positive, with strong growth throughout the forecast period out to 2016, driven by a widening array of mobile content for tablets including apps, declining prices making the product widely available to an increased user-base and product replacement as consumers look to update and modernize.

Multiple ownership per household will also drive market growth, as further advances are made in usability, performance and a new range of apps begin to emerge, specifically design to exploit the capabilities of tablets.

www.futuresource-consulting.com

“The final acceptance test run was based on production of both BD-ROM SL and BD-ROM DL discs during which an overall yield of well above 90% for BD-ROM SL and above 85% for BD-ROM DL was shown,” said Toshinori Kishi, Director of Media Business Unit, Panasonic Corporation. “The BLULINE II offers the conforming level of quality and reliability Panasonic needs for its business.”

www.singulus.de

“The expansion in global movie spending is being driven almost entirely by consumers in the growing economies of Asia-Pacific, Latin America, and Central and Eastern Europe,” observed Richard Cooper, senior analyst for video at IHS. As a group, consumers in the five key global economic regions are steadily increasing their movie spending, an area consisting of cinema tickets, Blu-ray and DVD rentals and purchases, TV-based or online video on demand (VoD) and pay-as-you-go streaming services. Spending on movies in 2011 hit a record of $62.6 billion, up 2.1% from 2010. The total is expected to rise by 2.6% in 2012 to $64.2 billion.

This growth is occurring despite the fact that the three growing economy regions combined accounted for only about one-third of total global movie spending in 2011, Cooper added. “The remaining two-thirds of the spending was generated by consumers in the mature markets of North America and Western Europe—where growth has stalled.”

Movie spending in Central and Eastern Europe will rise at a compound annual growth rate (CAGR) of 8.9% from 2010 to 2015, while Asia-Pacific will expand by 6.5% and Latin America by 4.2%. In contrast, the developed economies of North America and Western Europe will grow at CAGRs of 0.2% and 1.1%, respectively, during the same period. The divergent trends between the mature and developing markets mask underlying changes in patterns of movie consumption that are expected to drive growth during the next few years.

Home video spending is declining: in developing markets, the lower take-up of home video hardware, as well as escalating piracy rates, have prevented the legitimate physical video business from expanding beyond a high-end niche – and in some cases from developing at all. As a result, the mature markets of North America and Western Europe generate a disproportionate share of movie consumption via home video.

Sales of DVDs and Blu-ray Discs (BDs) accounted for less than 30% of all movie spending in these regions in 2011, down from almost 40% at the market’s peak in 2004. Initially, the downturn in spending reflected the failure of growing volume sales to compensate for falling prices, but volumes in the last few years also have been in decline.

Meanwhile, though the long-predicted death of video rental may be edging closer in Western Europe, in Japan its decline has been much more measured. Even in North America, video rental remains one of the most popular ways to view movies, with last year marking the end of eight successive years of North American rental spending decline, thanks largely to the widespread introduction by operators like Redbox and NCR of low-cost video rental kiosks.

Consumers resistant to paying for movies online: digital purchase, otherwise known as electronic sell-through (EST), and Internet VoD – aka digital rental – accounted for just 2% of movie spending in North America in 2011 and slightly less in Western Europe. Outside North America the online environment is highly fragmented; linguistic and cultural barriers mean most providers serve only a fraction of the number of consumers that an equivalent North American provider can reach, reducing the funds available to invest in content.

Perhaps surprisingly, online delivery in Japan also remains small—take-up of devices, even those of market leaders Apple and Xbox, is still limited and the available content mix is comparatively poor. However, it is online piracy that remains the biggest barrier worldwide to creating a viable digital movie business.

Consumers will still pay for the real movie experience: pirates cannot replicate the experience of “going to the movies,” and IHS research shows that consumers in developing markets are choosing this way of watching films more frequently and in increasing numbers. Accessibility of movies in developing markets has increased dramatically: in China alone, IHS research shows an average of eight new movie screens built each day through 2011.

In itself this would be sufficient to make theatrical movies the key driver of growth globally, but theatrical spending is also growing in mature regions where theatre numbers and attendance rates are stable.

And while box-office prices tend to rise with inflation, they have been boosted further by the introduction of 3-D, allowing theatres to charge a premium for 3D showings. As a result, the theatrical sector—which already accounted for $31 billion, or 50%, of movie spending in 2011—will generate $41 billion annually by 2015, equivalent to 59% of total spending.

Almost $6 billion of that increase will have come from the developing regions of Asia-Pacific, Central and Eastern Europe and Latin America, with a further $4 billion generated in North America and Western Europe. Despite the declines in some other sectors, this growth will help swell transactional movie spending to almost $70 billion in 2015.

www.isuppli.com

FullCycle provides the services necessary to make a game to be provided as a single product, including design, development, production, localization, testing, publishing and marketing. It can, says the official statement, handle all the relationships with digital distribution channels, hardware manufacturers and suppliers, and provides efficiency, faster turnarounds, creative continuity and improved workflow. Previously these were services that major media companies, IP rights holders and investors would need to source separately. "Creating a one-vendor pipeline means straightforward communication throughout the process and the full coordination of the development, testing and delivery pipeline,” added Harsant. “FullCycle will lead to greater visibility at that critical point of hand-off from development to testing teams as we take on greater responsibility.”

Testronic, Doublesix, and Kuju are part of the Catalis group, an outsourcing provider that focuses on high-end technical services relating to the creation of digital content for the entertainment and digital media industries. Jeremy Lewis, Catalis CEO, said of the announcement of FullCycle , “It took time and planning to develop these companies into highly functional, tightly integrated collaborators. We invested the time, money and intellectual capital to make FullCycle a viable offering, and we are pleased to unveil it during The Game Developers Conference in San Francisco, CA."

Seth Hallen, CEO of Testronic, noted, “Working closely with our colleagues at Kuju and Doublesix, we have put the most powerful development and testing pipeline into existence in the industry. Putting testing expertise into the process earlier allows our experts a proactive role in the pre-alpha phase of the development cycle, and allows us to forecast any potential challenges while enabling better test approaches. That saves money, time, and improves functionality. After collaborations with our sister companies on a number of projects, we see this as an evolutionary step in development and as a valuable service to our clients.”

Adrian Hawkins, COO of Kuju, concluded, “Kuju has built its reputation on a high-level of technical and creative expertise and Testronic is one of the most respected companies in testing and consultation. We see the collaboration on FullCycle as an important development that will advance the industry with efficiencies and significantly improve the experience of those wishing to bring games to market. Whilst the integration of services are important for a number of pragmatic reasons like time and money, we consider it crucial to the next phase of the industry and to the professional treatment of Intellectual Property.”

www.catalisgroup.com

The iPad-exclusive series takes viewers on tours of “awe-inspiring , unique locations around the world,” such as Tanzania and Timbuktu, led by NBC News chief foreign correspondent Richard Engel. It is initially delivered exclusively on the app for Rock Center with Brian Williams, and then made accessible on RockCenterNBC.com a week after each installment appears on that app.

As Rome Hartman, Rock Center Executive Producer, explains, this effort is part of a larger strategy at NBC News to develop content “differently and originally” on “digital platforms,” and reflects NBC’s intention to adopt a “fresh approach to website content and apps.” NBC News felt that “Hidden Planet” was a “natural fit” for the iPad, he points out.

The company feels this effort will yield significant ad opportunities. Anthony Galloway, Supervising Producer, Digital Media for NBC Primetime News, believes the kind of content epitomized by Hidden Planet will attract a significant number of sponsors. According to him, response to the series has been positive. “With an organic promotion strategy and no on-air counterpart, Hidden Planet had more than 39,000 video streams its first week,” Galloway claims.

Eventually, NBC News hopes the success of Hidden Plane will lead to other iPad-only news series, says Hartman.

www.nbcuni.com

UltraViolet – developed by the Digital Entertainment Content Ecosystem group (DECE) as a challenge to world domination by iTunes – has now limped onto the UK market. And I do mean limped.

There was just one launch title, Final Destination 5 from Warner Bros, available on December 26 2011. There was no press event or publicity for the launch, even though Tesco had got in ahead of UltraViolet with a rival system using blinkbox in which Tesco acquired a majority stake in early 2011. Tesco kicked off with 25 titles including Harry Potter and the Deathly Hallows – Part 2. Customers who buy these discs can use their Tesco loyalty card to link them to a blinkbox account and access an online copy of the movie.

DECE’s appointed spokeswoman in the UK explained the curiously low–key launch for UltraViolet: “It’s a B2B, Business to Business roll out. There will be no huge consumer push because there is only one title. There is no press release, just face-to-face one-to-one media briefings for ten people with DECE General Manager, Mark Teitell. The people who attended were given a briefing note. We are now phoning others before sending them the briefing note. You were not briefed so should not have the note.”

I was not one of the chosen ten but sneakily obtained a copy of the briefing note. It paints a rather more upbeat picture than the one from DECE’s spokeswoman, variously referring to the single title launch as a “rollout”, “an operational launch” and “UK launch”. This must be the first movie service launch that the press and trade have had to learn about by playing detective. The briefing note we weren’t supposed to see promises consumers the chance to “download to multiple devices for offline viewing, including full HD copies.”

DECE’s spokeswoman thought the digital copy of the launch title would be available only for streaming via a Flixster account and with a redemption code packaged with the disc. Warner Bros then assured that consumers can “instantly stream to their PC, Mac, Android or iOS device, or download and store in the Flixster app (available on Android and iOS devices) for offline viewing.”

OBSTACLE COURSE

Final Destination is not a movie I would want to buy, but Warner Bros kindly sent me a copy. It soon became clear that more than three months after launch in the US, UltraViolet remains an obstacle course for consumers. The over-arching problem is lack of clear user advice on how to use UltraViolet and the stopgap measures needed because no-one yet has UV-capable hardware.

Although the sleeve is labelled “Triple Play, Blu-Ray + DVD + UltraViolet (UV) Digital Copy”, the jewel box contains only a BD and DVD, without the customary third Digital Copy disc from which the owner would copy-download to a PC. In theory this is much simpler. The owner just uses the redemption code to get online access to the digital copy of the movie that is already stored on the UV Cloud. In practice the lack of clear instructions makes the process more difficult.

The UV Cloud copy can be streamed to play on a home computer, downloaded up to five times, or streamed to Android or Apple iOS portables. But without UV-enabled hardware, this requires the installation of the Flixster software which Warner brought in last year.

To enter the code and access the copy, the user first has to register separately with both the UltraViolet and Flixster websites, then agree to let these accounts cross link, and also agree to link to Rovi for reasons which are not explained. Only those in the industry will know that DECE has previously said this will in the future let users upload some of their own discs. Which ones? Search me.

Accessing the UltraViolet or Flixster website throws up requests for login to the other site, making it difficult to know which program is doing what and why. During some of the sign- on processes the web sites offer UK users a free movie download but then say the offer only applies to the US.

Flixster on a PC streams the movie using Adobe Flash, which must be downloaded if not already installed. Downloading to a PC requires Adobe Air and another Flixster program, Flixster Collections. I felt engulfed, bewildered, and underwhelmed by the whole experience.

What appeared to be a programmer’s private error message often popped up: “Announcement Jayesh 1. Demo for Judi - Flixster Collections is unavailable at the moment. We'll be back up and running again before long, so please try again soon. Thanks for your patience.”

NO CLEAR INDICATION

The disc packaging gives no clear explanation of the key requirement for portable play. Accessing the UV website triggers Adobe Flash error messages when movie play is attempted and fails.

The sleeve note advises only: "Flickster and UltraViolet Digital Copy allow you to download and instantly stream the movie via Wi-Fi so you can watch on all computers and compatible iOS and Android devices.” A note in print so small as to be near unreadable advises: “Not Compatible with all devices...compatible devices subject to change."

I learned the vital requirements for portable play only by speaking with Warner’s Digital Marketing Manager, Nihal de Silva. The user should install a Flixster App on the portable, then use it to log in to Flixster, from there link with the UV My Collection Cloud and then play the UV file with Flixster. Thanks to this personal tuition I successfully used iTunes to install the Flixster App on an iPod Touch, logged into my Flixster and UV accounts, and streamed Final Destination on the Touch using Wi-Fi.

An Android HTC Desire successfully installed the Flixster App, but confusingly labelled it “Movies”. Logging into the Flixster and UV sites found Final Destination in the UV My Collection store, with the offer to “Watch Now”. Flixster then showed “Loading” but at 95% gave the error message “Playback Problem. Unable to play movie. Please try again and contact us if the problem persists (1).”

I tried again several times and got identical error messages. Nihal de Silva confirms this is because the HTC Wildfire uses Android 2.2.1 and Flixster requires Android Honeycomb 3.0 or later. Honeycomb did not arrive until early 2011 so Android devices more than a year old will be incompatible with Flixster and UV unless they can be updated, which often they can’t be.

The new Nokia Lumia 800 Windows flagship phone installed the Flixster App OK, but then offered no option for login. Flixster’s FAQ advises only “Can I watch free movies on your app? Nope! Sorry.”

GET A GRIP, GUYS

I sent detailed notes on my miserable experience to both DECE and Warner Bros for comment, with a couple of extra questions, but heard nothing back.

Separately, a “Dear User” consumer email winged in. “You have been selected,” it said. “Share your opinions to help us shape your entertainment experience: Tell us about your UV experience.”

As I had already sent carefully written notes on my horrid UV experience and had them ignored, there seemed little point in spending more time on a vanity survey.

Get a grip, guys.

www.uvvu.com

You see them everywhere. People on tablets, laptops, smart phones, and mobile devices are reading e-books. They download them from on-line bookstores, apps, author websites, brick-and-mortar superstores and independent booksellers, and libraries. There is no doubt that the e-book phenomenon is growing, but what does that mean to the publishing industry? We’ve taken a look at the trends, forecasts, technological developments, and key players to learn more.

CHANGING LANDSCAPE

In January, publishing executives met in New York to examine the state of the industry at the 2012 Digital Book World Conference.

Although optimism over the digital evolution is lower than last year (72% of publishers feel they can be competitive in the new digital market, down from 83% a year ago), most believe it is still important to establish direct sales relationships with e-book readers. According to Forrester Research, 25 million people in the US alone own an e-reader and 34 million own a tablet (8 million households have two). 2012 numbers should grow to 40 million e-readers and 60 million tablets. US e-book sales increased by 17%, with publishers reporting 15% were from e-books.

Sales of both formats are expected to grow at a slower rate in 2012; Amazon and other online bookstores will sell 41% of e-books. The global e-book sales are concentrated in North America (80%), followed by Asia (11%), Europe (8%), and the remaining in Brazil and Africa, with the biggest e-markets in the US, South Korea and the UK. The UK –a year behind the US– anticipates strong growth. Apple is the key e-retailer in Europe, followed by Kobo and Sony. In Germany, where self-publishing of physical and e-books is exploding, Amazon is the dominant player, with Apple a distant second.

International markets present some challenges. While North America and the UK have clear publisher-retailer-wholesaler relationships, more vertical integration in other countries slows the rate of growth. The Italian market presents some unique challenges due to the state of its economy, low band width penetration, and a lack of readership.

European e-marketers also have to add VAT (value-added tax) to the price of e-books (considered a service, not a physical product). The UK government recently upheld its 20% VAT rate, stating that a change would violate EU law. Other European countries have lowered their VAT significantly, particularly France (7%) and Luxembourg (3%), preferring to pay EU fines. This move gives Amazon a strong competitive edge since their European operation is based in Luxembourg. For the present, UK e-book buyers will pay the lower rate on Amazon e-books and 20% on UK-based e-retailers. Effective from 2015, the EU will change how VAT is applied so that e-books are taxed at the rate of the purchaser’s country, not the vendor.

DIVERSE PLAYING FIELD

Most major book publishers have added e-book capabilities. According to Bill Smith, Director of Digital Partner Development for Perseus Book Group’s Constellation Digital Services division, “It would be shortsighted as a publisher not to be in the e-book market. Avid readers are purchasing both, and we now publish physical and digital titles simultaneously.”

Matt Kennedy, President of 1K Studios (a Cinram Digital Media Company) agrees that mass market publishers are obviously doing both. “However, there are some interesting secondary markets,” he says. “Many specialty publications, from newsletters to annual reports where printing costs and logistics are challenging, are finding digital publishing more attractive now that there are so many e-reading devices.” He notes that film, TV, game, and web content companies are getting into digital publishing. “These companies have properties with substantial fan followings that are interested in digital publications, especially when enhanced with their rich media assets.”

The company’s Director of Digital Product Development, Jason Miller adds: “Many publishers are addressing standard e-book conversion within their overall workflow. Editorial, marketing, design, legal functions, etc, are applied across both versions as a matter of efficiency. For interactive books, however, a separate division may be required.

”Smashwords and BookBaby – two leaders in the independent e-distribution/e-publishing arena – attest to the success of the new self- publishing paradigm for e-books. Mark Coker, founder and President of Smashwords, asserts that, “We are in a golden age for authors who want to self-publish. It has never been a better time to reach readers directly. Any writer can e-publish, immediately and globally.”

Books with alternative content or underserved markets considered not commercial are now available on various e-reader devices. Smashwords formats and distributes work from thousands of new authors each year from all over the world – people with diverse backgrounds and content, ranging from teens to 90-year-olds. They currently have over 36,000 authors and publishers with 98,000 titles. These e-books are sold through e-retailers like Apple, Barnes & Noble, Diesel, Kobo, and Sony.

“There are some terrific writers with appealing stories out there," Coker reports. "I am confident that  the self-published authors will be the ones who will dominate the bestseller lists in ten years.” There’s evidence that it’s already happening – Smashwords author Darcie Chan rose to become the #1 bestseller at the Apple iBookstore with her e-book, The Mill River Recluse, and is now fielding movie offers. Kindle’s self-publishing platform made author Amanda Hocking the talk of the industry.

Steven Spatz, Senior Vice President of Worldwide Marketing for BookBaby and AVL Digital Group, reports similar success. “One of our authors, a former speech writer who wanted to test the waters of children’s stories, came to us six months ago with three books. After tens of thousands of downloads, he now has a three-book contract with a leading print publisher.”

“We’re seeing a range of people by the hundreds each week who come to BookBaby to publish their work – retirees, bloggers, fledgling poets and writers, and published authors of out-of-print books,” Spatz reports. BookBaby serves as e-publisher, offering book cover design, text formatting, marketing tips, and sales reports for books distributed by Amazon, Apple, Baker & Taylor, Barnes & Noble, Copia, eBookPie, Gardners, Kobo, and Sony.

Authors are also going directly to e-retailer platforms like Amazon Kindle Direct, B&N PubIt and Apple’s new iBook Author to launch their books. Alternatives continue to expand as traditional publishers step up to the plate. Penguin Group US added self-publishing tools to its online fiction writing community, Book Country. The Perseus Books Group created a distribution and marketing arm, Argo Navis Author Services, to enable signed authors represented by an agency to self-publish e-books. UK-based publisher Bloomsbury created Bloomsbury Reader for digital-only releases. All appeal to authors whose books are out of print.

“We are converting our back catalogue but have drawn the line at books published before the 1995-2000 period,” says Bill Smith.“Previously, author contracts were silent about e-book rights; now they are built in. Perseus started our Argo Navis service for authors’ back list titles, so that they can choose to re-publish with us, as many are doing.”

E-EXPERIENCE ENHANCED

In e-book publishing, multimedia enhancements may be too expensive for some genres, but it was a natural step in the children’s book market. The Barnes & Noble children’s division introduced interactive picture and chapter e-books to its NOOK for kids line, for both NOOKcolor and iPad applications. Many feature ‘Read to Me’ audio narration and ‘Alive Touch’ technology, enabling kids to engage favourite characters by digitally turning pages, interacting with text, and zooming in and around images.

“For adults, the act of reading is not really something you can improve upon,” says Matt Kennedy. “However, the act of sharing what you are reading can be improved upon very easily. If content owners have something to deepen an appreciation for the work, interactivity becomes the bridge for delivery.” Examples include author interview clips, embedded videos, pictures of described locations, and original manuscript to published version comparisons.

Penguin Books partnered with 1K Studios to deliver Atlas Shrugged and On the Road Amplified Editions for iPad. These enhanced e-books enable readers to access side notes and overlaid photos, sketches, audio bytes, and other supplemental content that bring characters to life. The touch screen provides interactive functions for highlighting, note taking, and sharing content with friends, colleagues, or fellow e-book club members.

In January, two enhanced formats that could change the game were launched by Apple and NBC News. Philip Schiller, Apple Senior Vice President of Worldwide Marketing, presided over a special event at New York’s Guggenheim Museum to introduce the iBook 2 for iPad (interactive K-12 textbooks), iBook Author (self-publishing software), and a new version of iTunes U APP (access to thousands of online college courses). Schiller underscored Apple’s longstanding commitment to its customers by noting, “Education has been deep in our DNA from the very beginning. We know that you can empower people through learning and that technology has a role to play.”

Apple is essentially reinventing textbooks for grades K-12. In partnership with educational publishers Houghton Mifflin Harcourt, McGraw-Hill and Pearson (who supply 90% of US textbooks), it is delivering interactive e-textbooks in core subjects, most for $14.99 or less. These e-textbooks feature full screen graphics with advanced functions – animation, embedded video and audio, stunning photos and diagrams, advanced navigation, plus the ability to highlight, take and share notes, and create study cards. iBook Author enables educator/authors to create amazing Mac-based e-textbooks to enhance their curricula.

“Apple’s approach is clever,” adds Jason Miller. “On a technical level, it is a simple way to create multi-touch content that engages users more than standard text-only experiences. You can focus on compelling content without getting caught up on programming, which previously took a much larger team effort. Future versions will enable playback of pictures, text and data without changing complex interactive codes.”

NBC News’ announcement at the Digital Book World Conference is another example of the potential of e-book enrichment. Its new business unit, NBC Publishing, will produce multimedia e-books. NBC Publishing will draw upon millions of hours from NBC’s video and audio archives to create both enhanced and text-only e-books that can be viewed on tablets. The company expects to e-publish 30 titles in its first year – most based on current events, biographies, profiles, documentaries, and trends provided by NBC’s various news organizations.

NEW RELATIONSHIPS

Today, e-book authors are taking the lead in marketing and promoting their work. Author websites, blogs, Twitter and Facebook pages, e-book groups, and other forms of social networking have resulted in closer relationships between authors and readers. The format of e-books makes reading more personal. Mark Coker notes that, “When you take words and put them on a screen that consumers can hold in their hands, you change the relationship with readers. They can preview part of a book; adjust text size to make reading more pleasurable; or provide direct feedback to an author. With pricing for devices coming down and the quality of technology improving, e-books are likely to flourish.”

According to Bill Smith, “Author/publisher and author/reader relationships are changing. Mobile devices make it easier to communicate and tap into social networks so there is much more outreach happening through new channels. A number of e-reader platforms include author pages so it is possible to chat with readers.”

The route to publishing has changed. The traditional paradigm was: send out query letters; find an agent and a publisher; negotiate a book contract; then wait 12 to 18 months before your book is released. Authors had the benefit of professional editing, book design and production, and access to publicity outlets. Publishers took the financial risk and provided authors with advances and relatively modest sales royalties (5 to 25%).

In the new paradigm, authors can self-publish globally through major e-retailers within weeks with little or no financial investment, except the cost for professional editing, cover design and formatting. On average, they receive 60% of sales for e-books priced $2.99 and above, or 30% for those priced below. They then have to find their own way through marketing and promotional channels.

Other developments will add to the e-book experience. ePub3 software may make it less costly and more feasible to produce picture or illustrated how-to books digitally. Techniques like ‘book riff’ (selling chapters or sections separately); ‘small demons’ (an indexing capability); ‘high fidelity’ (cataloguing by genre); and others yet to be imagined could impact the reading experience. Social networking will drive book sales in all categories. It is indeed a brave new world.

www.amazon.com
www.apple.com
www.barnesandnoble.com
www.bookbaby.com
www.digitalbookworldconference.com
www.one-k.com
www.penquin.com
www.perseusbooks.com
www.smashwords.com

Universities also have a duty to educate students in the matter, Dodd went on: “University students are growing up in an era far different from when many of us went to college. Information is at their fingertips, in both legal and illegal form. Some have argued that intellectual property protection and the freedom of speech that universities cherish cannot coexist. This is wrong. ... I firmly believe universities can, and should, play a vital role in educating students about the importance of respecting intellectual property rights and the rule of law.”

Panellists included Rick Cotton, Executive Vice President and General Counsel from NBC Universal; Rob McKenna, NAAG President and Washington AG; Larry Conrad, Vice Chancellor for IT and CIO at University of North Carolina; and Joseph Storch, Associate General Counsel at the State University of New York.

www.mpaa.org

Other key findings from the report include:

• The number of users of streamed mobile TV services on smartphones will increase by 2.8x between 2011 and 2016
• The majority of broadcast mobile TV users will be from the Far East & China
• Subscriptions will make up the vast majority of mobile TV revenues

The report finds that, as users become more accustomed to viewing content on tablets, and as a wider range of content becomes available on tablets, consumers will increase their viewing times. This increase will be most apparent in North America where there is already significant mobile TV usage, and where internet TV services such as Hulu and Netflix are extremely popular. A tablet is the ideal device on which to consume mobile TV content, said Miller, with their large screen sizes and intuitive user interfaces allowing almost everyone to browse for and watch content. 


Another driver for this growth is second screening, with the continued integration of mobile services into pay-TV packages. Tablets can offer a richer viewing experience when used alongside traditional television by allowing the user to access supplementary information such as plot synopses and actor biographies. These devices also enable users to view pay-TV content or to watch catch-up services when away from home, extending the reach of traditional TV services.

www.juniperresearch.com