Matt Kennedy (pictured), President of 1K Studios, commented , “We’re really delighted to be working with Audible Magic. Second screen applications are a key need for our customers and Audible Magic offers the most robust and versatile solution for audio syncing in this area.”

Audible Magic’s SmartSyncTM Media Synchronization enables mobile devices to listen to TV audio and match it with frame-level accuracy to a mobile device. Most developers, the company said, can successfully integrate this technology into their applications within just a few hours.

“1K Studios has an established reputation for delivering creative and technical services to leading entertainment and media brands,” said Vance Ikezoye, Audible Magic’s CEO. “It’s fantastic to have established this relationship with 1K Studios and we look forward to seeing our technology integrated into their exciting second screen platforms.”

D2D is running a series of articles on the second screen viewing phenomenon; click here to see the most recent feature.

www.audiblemagic.com
www.one-k.com

The arbitral tribunal awarded Toshiba unpaid royalties and interest totaling over $4.4 million, plus continuing interest at a rate of 2% per month until the award is paid in full. The unpaid royalties awarded consisted of reported, unreported and underreported royalties due. This arbitration is part of a continuing global initiative by the DVD6C Licensing Group to collect unpaid royalties due under the DVD6C patent licence.

www.dvd6cla.com

“It says a lot that these respected, industry-leading companies are ‘all in’ with the Savtira business model,” said Timothy Roberts, President and CEO of Savtira. “Our partners understand that Savtira enables companies in the digital market to accelerate their revenues with full products and services that support their digital offerings.

“Even though Savtira gets labelled as a startup company, we have spent many years building trusting relationships with our partners to give us a sustainable competitive advantage. We also have spent millions of dollars in research, development and infrastructure and our partners recognize where our global market share is heading.”

www.savtira.com

Trade income from digital music increased by a quarter (24.7%) to £281.6m during 2011, with digital growth now offsetting two-thirds of the decline in income from sales of physical music product. Taylor added: “It is highly encouraging for the long-term prospects of the industry that the pace of digital growth continues to accelerate. British labels are supporting a wide range of innovative music services and music fans are embracing digital like never before."

Total digital music income – earnings from online downloads, subscriptions, ad-supported services and mobile – now accounts for more than a third (35.4%) of UK recorded music turnover, up from 27.4% in 2010. Revenue from digital albums grew strongly in 2011 and is now almost at the same level as digital single tracks. Digital albums generated £117.8m in trade income – up 43.2% on 2010’s year-end result of £82.2m. Earnings from digital single tracks rose 11.3% to £120.5m in 2011, compared to £108.3m in 2010.

The income from subscription digital music services also grew by 47.5% during 2011. Total trade income from physical formats – albums, singles and music video - fell by 14.1% overall in 2011, with revenues dropping for the eighth year in a row to £513.8m from 2010’s total of £598.0m. The 2011 market for physical albums dropped 14.4% to £484.7m compared to £566.4m the year before.

Industry revenues from physical music videos on DVD and Blu-Ray were down by only 3.3%, accounting for £25.8m, down on 2010’s tally of £26.7m. Income from physical singles dwindled by 33.1% to £3.3m overall.

www.bpi.co.uk

Hosken worked at United Business Media for over 20 years. For the last decade he was Group Publishing Director for its Music and Entertainment Technology portfolio, based at the FTSE 200's company’s London HQ. The group comprised a range of brands that included One to One, D2D’s predecessor; MediaTechDaily; Music Week; Television Broadcast Europe; Pro Sound News Europe, Installation Europe; the IBC Daily and ISE Daily. Hosken has worked extensively across weekly and monthly print, digital and conference products.

“After being involved with One to One for 15 years, I'm delighted to be joining D2D,” Hosken commented. “These are exciting times for the content production and delivery business and D2D provides an essential service identifying business opportunities and trends. The current team has done a great job in establishing the brand in a relatively short period of time.I am confident that we can build on this and take it to the next level.”

Elizabeth Toppin, D2D editor and former editor of One to One, added: “I’m delighted that Joe is joining the team. I have worked with him over a period of nearly 20 years so I know from personal experience that his background makes him the ideal person to help us build on the success of D2D and continue to serve the global content delivery industry with informative and in-depth editorial coverage.” The magazine recently also launched its new look and new look with Issue 14 (January/February).

Joe Hosken can be contacted on Joe.Hosken@digital2disc.com and +44 (0)742 909 0134.

D2D unveils new logo and new look

February 16, 2012: D2D, the magazine formerly known as Digital2Disc, and the only globally distributed B2B magazine dealing with the business and technology of content delivery, has unveiled its new logo and new look publication. Issue 14 (January/February) is the first publication to bear the new look and is available to view online as of February 16.

Featured the editorial topics in the current issue of the magazine include:

• Second screening: an overview of this 21st century viewing phenomenon featuring input from second screen consultant Chuck Parker
• Fingerprinting, watermarking, and how they can be used to monetize content, from acclaimed industry anti-piracy specialist Richard Atkinson
• A look at the EIDR initiative, helping to track digital assets throughout the supply chain
• Special packaging and its effect on music sales
• On the spot reports from CES 2102 and DCM Europe
• Collaborative documentaries
• Regular columns - Take on Technology from Barry Fox and industry analysis from Futuresource Consulting

“The publication has become well known in the industry as D2D so the start of 2012 was a good time to rebrand it to keep up with our readers’ perception both of the name and the continually evolving editorial content,” said editor Elizabeth Toppin. “We are proud to be viewed as a market leader, informing the global content delivery industry of new trends in technology and new ways of monetizing content, from games and software to music and video, and from disc to download and streaming.”

www.digital2disc.com

For more information contact editorial@digital2disc.com

Editors’ notes: 
D2D is the only globally distributed B2B 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.

“Delivering a great second screen experience is an opportunity for content creators to get closer to and engage with their fans on a whole new level,” said Parker. “I am excited about working with D2D to help raise the awareness and knowledge of this new market segment to our industry."

Parker, an innovative media industry leader, has second screens since 2009 when Technicolor first decided to build a consumer experience around a ‘2-foot remote experience’ at a time before the iPad was launched and tablets were still a failed category.

“We are delighted to have Chuck sharing with us his experience and vast knowledge on this topic,” added D2D editor Elizabeth Toppin. “He stressed to us early on the need for the content delivery industry to be provided with in-depth information on the business and trends of this 21st century viewing phenomenon, and we are proud to be leading the way with this upcoming series of articles that will complement Chuck’s own blog on the topic.”

You can see Parker’s knowledge shine through in the series of articles written for D2D by by George Cole, the first of which appears in Issue 14 of the magazine, distributed physically and published online on February 16. His blog on the topic is also linked directly from the D2D website.

www.digital2disc.com
digitalvideospace.blogspot.com

The Video Index report reveals insights into video viewing behavior and engagement across the web, smartphones, tablets, social networks and connected TVs. Key highlights from the report, based on the viewing habits of 100 million views every month, include:

• Video plays on tablets, mobile devices and connected TVs nearly doubled in Q4 2011 over Q3 2011
• Both iPhone – boosted by the iPhone 4S release in October – and Android grew rapidly quarter-over-quarter in terms of videos played and hours watched
• Facebook users on average share ten times more video than Twitter users
• Video plays on Google TV grew 91% in Q4 2011 over Q3 2011
• Tablet viewers continue to be far more engaged than desktop viewers – they were 45% more likely to complete at least 75% of videos played, a reliable measure of engagement

“Understanding the changing dynamics of multi-device video consumption is key to delivering a more personalized experience for consumers while creating new revenue streams and growing audiences,” said Lepe. “While people are still watching much more traditional TV than streaming video, our data shows we’re on a clear and irreversible course toward an IP-delivered future. For example, looking at non-desktop video views, Q4 was the second straight quarter of nearly 100% growth. The Video Index also shows people are far more engaged on tablets, which are closer to TVs than they are to smartphones when it comes to viewing behaviour.”

www.ooyala.com

Content still has to be king, and 3D should serve to make a good movie more engaging. That - and glasses-less viewing - will be key to adoption of 3D. It’s not enough to badge content as 3D and expect to be able to charge a premium for it, she said, as consumers are more clued up to what they want and have a wider option of viewing generally.

Betihavas provided a snapshot view of 3D milestones, pointing out that it is not exactly a new viewing experience, being around as it has since the 1840s. It was the onset of digital that broke new ground and made 3D a universal experience. That was also what helped make Avatar the huge hit that it was, she said, predicting that there will not be another Avatar for a while. Because digital was new and made 3D a universal experience, there was no competition, and so a snowballling effect led to that massive success.

To summarize: “3D is not going away though it has commoditized rather quickly on some things.” There are now so many channels in which it can be exhibited - cinema, home, TV, etc and, she said, “You can have two bites at the cherry - you can still shoot and archive in 3D and show it in 2D. That gives you two bits at the cherry.”

www.nineteenfifteen.com

“While this action is a significant step in shutting down two major rogue websites stealing content from publishers and others, it also captures the enormous investment of time and cost required for rights-holders to protect their work,” said Tom Allen, President and CEO, AAP. “For every rogue site that is taken down, there are hundreds more demanding similar effort. I can’t think of a more timely example of the need for additional tools to expedite such action.”

One site illegally acquired more than 400,000 copyrighted e-books and made them available for free, anonymous downloading on a site that disguised itself as a legitimate provider and alluded to serving as an authorized library for such content. The operators earned an estimated €8 million ($10,602,400) annually, mainly from actions by third parties: advertisers bought space on the site, donations were made to this internet library through online payment services and individuals purchased premium-level user accounts. The same operators ran an affiliated fileshare hosting service which facilitated the anonymous infringing uploads.

AAP member publishing companies that participated are Cengage Learning, Elsevier, HarperCollins, John Wiley & Sons, The McGraw-Hill Companies, Oxford University Press and Pearson Education Inc. The additional global publishing participants were Cambridge University Press, Georg Thieme, Hogrefe, Macmillan, Pearson Education Ltd, Springer, Taylor & Francis, C.H. Beck and De Gruyter.

www.publishers.org

“After 30 years of supremacy, finally the jewel vox, the plastic box around your CD, has real competition,” Olivier Durand, Managing Director of Emthelo, a supply chain consultancy specializing in the entertainment industry. “Approximately 400 million jewel boxes are currently sold in Europe each year, producing in excess of 40,000 tons of plastic. Greener carton based packaging has been around for a while but its price has prevented it from taking a large share of the market (currently carton based packaging accounts for only 15% of the market).

“Universal has already adopted this environmentally friendly innovation, while all other majors are looking into it,” Durand added. In its first couple of months of its existence half a million MINTpacks have been produced and YouTube sensation Gotye is releasing the European version of Making Mirrors on MINTpack this week.

www.mintpack.co

“We knew from several years’ experience of delivering pre-release assets to broadcasters and online agencies that there was a real demand for high quality short-form programming,” said Thomson. “This was a challenge we set our new Tiger Films division.”

DMS can also film and edit bespoke featurettes for bonus materials, such as interviews with the filmmakers and behind-the-scenes documentaries, and it has filmed and edited video featurettes for a range of Hollywood and European films, including Tinker Tailor Soldier Spy, The Adventures of Tintin, Real Steel, The Help, and Mission: Impossible Ghost Protocol. The concept has been developed further and now also includes The Big Picture Specials – title-specific video featurettes, usually based around a major UK premiere. These can also be used as bonus material on DVD and Blu-Ray.

www.dmsukltd.com

Second screen is making waves in the broadcast, social media and video worlds. In essence, second screen involves using a second display device, like a smartphone, laptop or tablet, while watching television. Many people are now second screening: research by Nielsen found that 70% of tablet users and 68% of smartphone owners used their device while watching television.

“There are a lot of stats that show that a very large percentage of people who watch TV are doing it with a second screen on their lap,” says Chuck Parker, former Chief Commercial Officer of Technicolor. “Now there’s some debate about whether they are using the second screen for emailing or checking their bank balance, but there a large percentage who are on their Twitter feeds doing a realtime search on the TV show they’re watching or using Facebook to tell their friends what they’re watching. The TV and video industries are excited because this is a shift in consumer behaviour, and it’s probably the first time you can demonstrate to advertisers and content makers that real engagement is taking place.”

Social TV is a second screen activity. “Social TV is digital interaction between people about television content or their digital interaction with that content,” says Colin Donald, Director of research company Futurescape. He adds that the concept of Social TV is not new. “Television has always had a significant social dimension, as with viewing: together in the living room and having water cooler conversations at work. One key reason that Social TV participation is growing is because it meets some of our most fundamental social needs, such as self-expression and affiliation with others through shared cultural references.”

Dan Cryan, Senior Analyst, Head of Broadband Media, at media research company IHS Screen Digest, agrees: “You now have a collection of companies who are tapping into a very well established mode of behaviour, with media companies trying to engage with this and maintain their relevance on the second screen.” Jeremy Toeman, Chief Product Officer, Dijit Media, says, “We're seeing a lot of attempts to digitally harness the chatter around TV, much as the early days of ‘social media’ attempted to capture conversations around a myriad of topics.”

A poll conducted by the digital marketing agency Digital Clarity of more than 1,300 people under the age of 25 in the UK found that 80% of those surveyed use a mobile device to communicate with friends while watching TV, with 72% using Twitter, Facebook or mobile applications, to actively comment on shows as they are watching them. In the US, a Nielsen/Yahoo study found that more than 86% of mobile internet users communicated with each other in real-time during TV broadcasts. Reggie James, founder of Digital Clarity, says, “TV shows with small audiences can generate enormous traffic on Twitter. Social TV is a new platform for engaging with a TV show and has turned TV programmes into online events.”

JOSTLING FOR POSITION

The Social TV market is being driven by several factors: the massive growth of social network sites like Facebook and Twitter, the wide availability of broadband in homes, and the vast sales of connected devices like smartphones and tablets. Futuresource Consulting says that global shipments of tablets reached 15.5 million units in Q3 2011, compared with 4.5 million for the same period in 2010 – Apple accounted for 70% of tablet shipments in the US.

Many see the tablet as the perfect form factor for second screen usage. “The tablet is the device for the living room and the most socially acceptable device,” says Ajay Shah, CEO of TV Plus, a TV web browser company. “The tablet screen is parallel to the ground, whereas the screen on a smartphone or laptop is perpendicular, and closed off from others.”

Many parties are jostling for position in the second screen market including broadcasters, film studios, television manufacturers, advertisers, social network sites, technology developers, and start-up companies developing apps for second screen activities. “New DNA is coming into the broadcast world,” notes Alex Terpstra, CEO of technology company Civolution. “Broadcasters tend not to innovate quickly, but start-ups develop things fast. It will be exciting to see how things go.”

Start-up company zeebox has developed a second screen app. A survey of 5,000 people by zeebox and Lightspeed found that most people still watch live television, rather than recorded, but that there was much dissatisfaction with the medium, says Anthony Rose, zeebox co-founder and CTO. “People are frustrated with live television because it hasn’t kept up with the pace of innovation. On a computer, you can use Skype, email and watch a video, but TV just beams out at you. We found that 57% got around this frustration by using a second screen, and of these, 60% were using the second screen for a programme-related activity, such as doing a Google search on an actor.”

Little wonder that some broadcasters and programme makers have developed apps, websites or platforms to cater for the second screen. HBO Connect is a Social TV platform for fans of HBO programmes, where they can sign-in using their Facebook or Twitter account and discuss HBO shows with others. Ten US broadcast groups, including Barrington, Hearst and Raycomm, have formed a partnership with Social TV start-up ConnecTV. The broadcasting groups cover 76 million households and more than 200 stations, such as ABC, CBS and Fox. UK commercial broadcasters ITV and Channel 4 are developing second screen apps.

“Television companies throughout the value chain have good reason to support Social TV because they see its potential to increase ratings and therefore advertising revenue; boost pay-TV and video-on-demand income, and also work with paid transactions, such as talent show voting and merchandise sales,” says Donald. In US TV, there are ad breaks 18 minutes in every hour, but this level of advertising is not possible on a second screen device, notes Aslam Khader, Chief Technology and Product Officer for technology company Ensequence. “And so finding a way to monetize the second screen audience is difficult. The content industry wants second screen to augment the TV experience and not replace it.”

Connected TV (also known as Smart TV) systems are increasingly incorporating Social TV: many connected TV sets have Facebook and Twitter apps pre-installed. Donald observes: “Pay- TV operators are upgrading their set-tops for Social TV functionality, while the Xbox and PlayStation game consoles have their own social networks and can access third-party social networks; major tech companies such as Google, Yahoo and Microsoft are providing the software to enable connected TV and, with it, Social TV.”

HOW IT WORKS

he technology behind second screen products and systems is often quite complex, not least because most rely on apps and the ability to synchronize the television program with the second screen device. Chuck Parker classifies second screen app functions into various types. The first, which he calls ‘Simple’, is designed to make the first screen easier to navigate, with functions like an advanced remote control. ‘Social’ integrates with the various social networks such as Twitter and Facebook. ‘Seamless’ integrates multiple services into the experience such as Hulu, Netflix, and an operator's VOD service. ‘Stimulating’ creates a more in-depth experience with the TV content, such as sports stats, related news events, commerce experiences, and associated advertising. ‘Discovery’ provides relevant suggestions to content you might enjoy. Another app feature is ‘Search’. Most second screen apps offer several or more of these features.

The key to synchronizing the TV program and the second screen device is a system known as automatic content recognition or ACR. One system, audio watermarking, adds inaudible data to the soundtrack in a way that combines sound and data into a single entity. “The advantage is that wherever the sound goes the watermark goes,” says Civolution’s Alex Terpstra. The second screen device uses a built-in microphone to pick up the TV sound and combined watermark. Watermark detection software on the second screen device analyzes the sound, finds the watermark and can retrieve any information within it. This information could include a channel identifier or even a content identifier, so the second screen device knows, for example, that ‘I’m now syncing with The X-Factor on Channel 9’. The information also contains time codes, which enable the second screen device to remain in sync with the TV content.

Audio fingerprinting involves the second screen device picking up the TV sound, but this time, no extra information is added to the sound. Fingerprinting works by analyzing unique features from the content and comparing them to a database of reference fingerprints to find a match. Fingerprinting requires the second screen devices to generate fingerprints from the TV sound, which are matched against reference fingerprints, which are often stored in the cloud. “Watermarking requires modifying content, but fingerprinting requires a reference database and an infrastructure for second screen devices to be able to access it,” says Terpstra. In both ACR systems, there’s no requirement for the first and second screen devices to communicate with each other via an internet connection.

However, a third synchronization system involves the television and second screen device syncing with each other through a shared Wi-Fi connection, although this system is rarely used, as most TVs don’t have internet connectivity. Sony’s Blu-ray second screen system is known as a vertically controlled environment, and uses a shared Wi-Fi connection to sync the second screen device with a BD Live-enabled Blu-ray player. If Wi-Fi synchronization is unavailable, Sony offers a manual sync option. But not every second screen system relies on synchronization technology. Start-up company Starling has no plans to use synchronization, says its CEO Declan Caulfield. “When we examined what a sample of second screen users said about synchronization, it was interesting to note that many reactions were negative, especially if the synchronization technology didn’t work. It looks like magic when a device tells you what TV show you’re watching, but all it’s doing is telling you something you already know. When people come together to chat about a TV program, there’s already a high degree of synchronization between them.”

SECOND SCREENS AND DISCS

A number of Hollywood studios have also developed second screen-enabled Blu-ray titles, which come with extra content that is viewed on the second screen. The studios hope that by providing second screen content only on sell- through titles, consumers will purchase rather than rent. Disney has launched a handful of second screen titles including Bambi and Tron Legacy, while Universal’s second screen titles like Fast Five and Tower Heist use a pocket Blu app, which allows an iPhone to control the Blu-ray title, and gives access to extra content related to the movie. The pocket Blu app also works with an iPad, iPod Touch, Android smartphones and tablets, PCs and Macs.

Sony Pictures Home Entertainment’s Smurfs Blu-ray release offers Smurf-O-Vision second screen fun activities. The Weinstein Company’s The King’s Speech uses Technicolor’s MediaEcho second screen app for features such as bonus streaming audio and video content, audio commentary excerpts, behind the scenes information, actor profiles, connection to IMDB and other online databases, social media integration and e-commerce.

Jim Bottoms, Director, Futuresource Consulting, says that while he can see a compelling case for live TV shows embracing the second screen, the jury is still out for Blu-ray titles, “There’s a lot of experimentation going on – it’s like the early days of BD Live. The challenge is whether there’s something people can be doing that relates to the movie at the same time. It’s not proven that consumers want it.”

Some second screen apps, like Yahoo’s IntoNow, require second screen users to check-in and notify their friends what they’re watching, but most systems use what Shah describes as “deep engagement,” which can automatically connect users to others watching the same television show, for example, by displaying Twitter feeds related to the programme.

Cinram’s 1K Studios is developing a second screen app for Blu-ray titles, and Matt Kennedy, 1K Studios President, says that while second screen apps are currently used to support the TV content, he foresees a time when, “The app could provide the primary content on your second screen device, and the film on the television screen is the supporting content.”

Some wonder if second screen will turn out to be a fad or something that is used only by younger (under 35) consumers. But few think that second screen will disappear, and Shah says, “With most new technologies, it’s the young people who embrace it first. But then it spreads to adjacent demographics and beyond. Facebook started out with a college demographic – today, the fastest growing user base is people over 60.”

THE QUESTIONS REMAIN

Still many questions remain, including: who are the likely winners and losers in the second screen market? Shay Fan a member of the marketing team at Miso, a social TV platform, says, “Success will come when someone figures out the magic formula for ‘stickiness’ – something that will make users want to stay and interact with content. With so much competing for our attention, it will be a difficult, crowded industry.”

Toeman adds, “I think all the traditional players will remain winners for quite some time to come, it's their game to lose really. This is a big challenging space, and I think success will come from the companies who best understand what consumers actually want to do with their time and how they enjoy watching TV. Those who are trying to shape or shift behaviours will have an uphill battle, as well as those who pay too much attention to hype, and not enough to reality.”

www.civolution.com
www.dijit.com
www.disneysecondscreen.go.com
www.ensequence.com
www.gomiso.com
www.one-k.com
www.sonypictures.com/homevideo
http://starling.tv
www.technicolor.com
www.tvplus.com
www.universalstudiosentertainment.com
http://weinsteinco.com
www.zeebox.com

In comparing watermarking and fingerprinting, some aspects are similar and some are different. But, more importantly, as they continue to evolve, those differences are becoming less important. The main issue will be how it is used, because the business is driving things: it’s not just about content protection anymore, but about content leverage. With these capabilities, I can know exactly what the content is (whether there’s a mark in it or whether there’s metadata about it)...and leverage that knowledge in real-time.

Leveraging content means not just stopping bad people from doing bad things with it: we can take those consumers and offer them other, legal, ways to enjoy content. It is important to stay open to evolving applications while focusing on your business needs and requirements, because ultimately it’s technology that supports business requirements.

SIMILARITIES AND DIFFERENCES

If we look first at the similarities between fingerprinting and watermarking, one thing in common is what I call the four-step process. That means

1. Processing the content
2. Detecting the watermark and/or the fingerprint
3. Comparing reference data if it’s relative
4. Taking action.

But depending on whose products or brochures you’re looking at, you’ll commonly see these four steps depicted as three: I mark it, I detect it, and I take action.

Content management is evolving as these technologies become more mature, because I can start to use them embedded within my library and other asset management and workflow tools as, again, ways to get more out of my content. And the Holy Grail is, ‘How do I make money with it?’

One key difference is that fingerprinting, which is highly accurate, does not modify the content. It is used in the content to generate a reference file and from that reference file I can find copies of that content. It’s highly accurate.

Watermarking modifies the content; so once it gets watermarked it is not the same, there is something in there, whether you can see it or not, or whether you can hear it or not, while that’s important, the key is that the content changed through the process.

WATERMARKING

Let’s look at visible watermarking as in Figure 1. I put something like that in, and pirates are going to either mask it out through some kind of obscuring technique, or just crop it off. So it’s pretty clear that visible watermarks, at least the overt kind, aren’t necessarily the greatest. Ultimately the pirates cut them off, so that’s why as an industry we went to more of a covert marking technique.

This technique is something that one of the studios developed; it’s visible but, unless you knew where to look, how to look, when to look, you’re not going to see it. Disney’s Pixar also got a lot more creative in how they did things, they literally embedded things within the films that they would change depending on the type of individual watermarks they needed.

Figure 2 is a frame from the movie, WALL- E, where the number on the right side is completely contextual to the film and so it doesn’t stand out. That number itself was changed individually so that all the copies of the movie were traceable. One of the powerful things here is that you can see it: you know it’s there and you know it’s a watermark. There’s a certain confidence in being able to see something, and I’ll come back to that.

From the same movie, Figure 3 is a case of marks on top of marks, on top of marks, on top of marks. So early in the post-production process, as an industry the good news is everybody’s focused on security. The bad news is that that they’re just watermarking the crap out of it, and good luck if you’re trying to figure out what scene this is and actually get a creative experience from it. But you certainly know whose it was and that it wasn’t open for duplication, reproduction, distribution, blah, blah, blah.

With invisible watermarking, obviously if it’s invisible, you can’t see it, and that’s the good thing: it doesn’t really change the content from a creative standpoint, on the other hand the bad news is, is it in there?

Is it in there; I know I ran the machine and it’s supposed to be in there, but is it really in there? The good news is that technology is maturing to the point where those kind of questions become less and less of an issue. For instance, Verance can provide an inaudible audio watermark tied into AACS, aka the security model of Blu-ray, and this is another application that’s evolved over time. [The Verance watermark contains information that is inaudible to people but can be read and understood by consumer and computer devices. The mark will impart usage information about the content, including content identification, forensic tracking and copy control information.]

So, I put a watermark in my content; the consumer device then listens for a watermark and if it hears it, a certain kind of mark, it can just stop playing. This is the first time you can really take these technologies and put them right into a consumer experience, and you’re using it for essentially an anti-piracy approach, at least the defensive application on the left side in Figure 4. If the content is pirated, the player can stop the playback or mute the audio, but if the content is determined to be legitimate, it can just be played as normal.

That means no impact for any normal application; on the other hand if it was pirated material, you definitely get an experience. The experience can be that it just stops playing and says ‘I’m stopping playing because I’ve detected the watermark that says this is pirated’. On the other hand, you can use the very same technologies to change the rule from ‘stop playback’ to ‘Hey let’s monetize this thing’. You’ve got a consumer who obviously wants the content, wants to view your content; now it’s a question of ‘What do I want to do?’

FINGERPRINTING

With fingerprinting, some things are different, some things are the same. You take content and run it through a fingerprint generator, it doesn’t change the content, what it does generate is a fingerprint, a digital representation file, very similar to what people would call a hash. That in turn is stuck into a reference database and you do kind of the identical process on the other end.

Take a look at content sites; they can take a fingerprint generator and put it in their upload stream so all content going to the site is fingerprinted automatically and then sent to the digital fingerprint database for comparison. That can tell you whether the content is copyrighted or not and what the associated rules are, so you can block it, take it down, monetize it, things like that. If you get a site that doesn’t want to play by the rules and leaves content on their site that shouldn’t be there, you can scrape their site using the same technology and figure out what’s up there.

This can all be automated – no human in the loop eyeballing this; the technology says not only ‘That’s your film’, but ‘That two-second clip is your film and it’s this part of your film and by the way, the pirates flipped it, rotated it and maybe even tinted it, and it’s still your film’.

There are then a lot of things I can do once I’ve determined what content it is. As the technology has gotten very, very robust, it’s now less about the technology and more about the applications of the technology and how you get it integrated seamlessly into what you’re trying to do.

In terms of what you can do with it, I’m going to give you several different ways of thinking about it. On the left side of Figure 4, this is defensive: how do I eliminate the content, which means ‘fight the demand’. Automated content blocking, for example, or take down notices, or manual view and take-down.

In the middle of this, you have business insight in the middle, which is a very, very powerful application. The technology can tell you where your content is, which means that you can now have pretty good insight on what’s going on with it.

Then it’s all about ‘How do I take that demand and leverage it to make money?’ For instance, redirections: even if it’s pirated content, I can take the consumer and instead of showing him the pirate version that was uploaded, I can link him right over to the legitimate site. Or you can substitute, directly replace content – just pull all the pirate stuff down and put the legitimate trailer in its place.

We all know that the internet’s powered a lot by ads and the key with ads is, ‘Are they relative to what I want, or irrelevant?’ This puts ads right on top of the content and we can look at ad monetization. An example of that: I’m going to run ads with Universal and do a rev-share deal. It’s Universal’s content, so their content is generating them money in addition to my ad revenue. For instance, if it’s Fast Five in the window, the relevant ad placements mean you can run ads for the Fast Five DVD.

If you’ve got a consumer that clearly wants that content specifically, you can make all the the ad content on that page relevant to that. So it allows you to do a lot of different things. In Figure 5, there is a monetization example. You say, ‘Ok, somebody uploaded this Monty Python video to YouTube’, but using this technology YouTube can then figure out, oh, that’s Monty Python, it’s this particular scene. By the way, that particular show is now available on Amazon and so I’m going to run an ad right over the top of it, and if you click on that, it sends you to Amazon.com and you can buy the DVD.

CONFIDENCE IN THE TECHNOLOGY

So, in summary, it’s not a technology issue anymore: fingerprinting and watermarking are relatively mature technologies that work and have been incorporated into key industry standards like digital cinemas, DCI [Digital Cinema Initiatives] uses invisible watermark embedding. AACS for Blu-ray is embedded as part of the Verance watermark.

Now in the workflow, in terms of outsourcing, a number of the key industry players will do fingerprinting in addition to the watermarking; if you want to put it in your internal workflow and supply chain, you can do that too. A number of devices are starting to embed the ability to generate watermarking and fingerprinting as part of the transferring process. A key part of all this is metadata, which is fundamental to many of these processes.

There are some issues out there, such as content leverage by internal partners. When I was at Disney we saw that a lot in Europe: we’d send over a theatrical print in the old days with a European language dubbed on it, and then we’d see that print leveraged for home entertainment use. You wind up with content bridging particular distribution channels. If I stick a mark in that content that says ‘This is a theatrical print’ and all of a sudden it winds up in home entertainment, the very same content, with that very same mark, it starts to create some challenges.

Again, that’s something that the industry itself is starting to look at. Digital distribution and workflows solve some of that because it means getting the original master in what you need is going to be easier than the old days.

Broad distribution raises some ownership issues so as everybody starts to deal with digital distribution, and whether it’s fingerprinting or watermarking, getting through all those checks and balances sometimes gets complicated. It’s not really coming up yet today, but it’s on the horizon as potentially one of those areas. For instance, there is overmarking – if one of my key supply chain guys adds their own watermark, pretty soon I’m stepping on stuff, especially if I can’t see it.

There needs to be confidence in the technology, knowing it’s in there when it’s invisible or inaudible, that’s much less of a concern, but it’s always a nagging issue. And we need to consider an ecosystem that is party to different motivations; that’s just the reality of what we have as an industry, not all the players are equally motivated to do the same thing in the same way.

[The illustrated version of this article will appear in Issue 14 (January/February) of D2D.]

The exploding demand for digital reading devices and downloaded e- books during the fourth quarter of 2011 brought a flurry of news among the leading suppliers in the market: in November, e-reader manufacturer Kobo was sold to a Japanese company that runs online shopping malls; in early January, Barnes & Noble announced it is reviewing its Nook e- reader business and may possibly spin it off from its core retail bookstore operation; also in early January, analysts speculated that Amazon.com will release another new Kindle in 2012 and drop prices even lower on its existing Kindle models.

Total annual e-reader sales figures are highly speculative, largely due to category leader Amazon.com’s refusal to release specific unit sales numbers. According to Jeff Bezos, Amazon’s founder and CEO, customers worldwide bought “well over one million” Kindle devices per week during the month of December 2011. The Kindle family of e-readers were the best-selling products on Amazon.com, Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.es, and Amazon.it, Bezos said. Industry analysts estimate that Kindle devices account for between 55% and 60% of the total e-reader category.

What is agreed upon is that the sector is poised for tremendous growth, in both device sales and downloadable digital content. Juniper Research forecast in November 2011 that worldwide sales of e-readers will nearly triple in the next five years. Futuresource Consulting estimates that the Western European e-book market alone grew by over 400% in 2010 with sales of e-books exceeding 10 million units. By the end of 2011, 32 million e-books were expected to be sold in Western Europe.

The growth potential is huge, according to Fiona Hoy, market analyst at Futuresource Consulting, which forecast e-book revenues in Western Europe will reach £1.6 billion by 2015, accounting for 15% of total book spending and representing one out of every five books sold in the region. “Despite all this rapid growth in demand for e-books in Western Europe, the market is still in its infancy, representing less than 1% of total consumer spending on books,” Hoy said. “Moving forward, there are enormous opportunities within the market.”

FACTS, FIGURES & PRICES

North America accounts for nearly 80% of the worldwide e-reader market, according to the International Data Corp, (IDC), a US based market research firm. The worldwide market for digital reading devices is shared by only a few key players: Amazon.com; Barnes & Noble; Pandigital; Kobo; Hanvon and Sony, which released early versions of e-readers more than ten years ago, but has, as yet, failed to become a dominant supplier in the category.

E-readers have found particular success in entry-level price points ($79 is currently the lowest-price e-reader from Amazon available in the US) and in higher-level price points ($199 in the US for the Kindle Fire and the Kobo Vox.) The basic models use e-ink, an unlit black-and-white display technology that affords weeks-long battery life and looks remarkably like actual paper. Many lower-cost models are ad-supported, meaning they typically have advertisements on their screen savers.

At the higher end, the newest devices are essentially hybrid e-readers/tablets. Most feature 7-inch colour screens and about eight hours of battery life. Designed with e-book downloading and reading at its core, the new devices also offer app stores, email, video playback and web browsing. The new hybrids are often mentioned as lower-cost alternatives to the iPad (still at about $499 in the US) which has a built-in app for digital reading called iBooks that are available through its iBookstore.

When Barnes & Noble launched its hybrid e- reader/tablet, the Nook Tablet, in the US in November 2011, it was the company’s fastest and lightest tablet yet. With a retail price of $249, however, it faced stiff price competition from Amazon’s Kindle Fire. Barnes & Noble also offered its Simple Touch black-and-white e-reader for $99 over the Christmas selling season, but demand for the entry-level model lagged expectations, according to the company.

Still, combined sales of Nook products were brisk, up 70% compared with a year ago during the nine-week period ending December 31, 2011. Digital content sales more than doubled; the company said it expects those sales to total $450 million in fiscal 2012. In total, Barnes & Noble expects its Nook business to generate $1.5 billion in revenue this year, while at the same time it is contemplating spinning off the Nook operation in order to raise capital to sustain growth. Within the next two months, the company is also expected to decide whether to expand its Nook business overseas.

UPENDING PUBLISHING

E-readers and tablet/e-reader hybrids have not only profoundly changed the retail landscape for printed books, they have also completely up-ended business at the big six publishing houses in the US. About 20% of total book sales at both Random House and Hachette are in digital format, but other publishers are reportedly much slower to get on board. After Borders bookstores closed their last remaining stores in the US last year, it was clear that traditional book publishers that do not have a plan to shift to digital content may not survive. Adding to the woes of the traditional publishing houses are suppliers like Amazon.com, which is rapidly turning itself into a fully-fledged publisher to meet the increasing demand for digital content.

And Amazon, first to slash prices on devices and get e-readers below the magic $100 point, is also way out front on discount pricing of e-books by offering, just as Apple does, most books at a price tag of $9.99. After Amazon charged $9.99 for a New York Times bestseller, the big six publishers in the US instituted agency pricing, which allows them to set the prices of their own e-books.

Both Apple and the six publishers are now involved in a class action lawsuit, filed on charges of price-fixing and collusion. Agency pricing is also being investigated in the UK.

Downloading books and magazines has the same consumer appeal that made downloading digital music a success: it is fast, relatively inexpensive and hugely convenient. Christmas Day 2011 was the biggest day ever for Kindle book downloads, according to Amazon. And, in a surprising success for independent book publishing, the #1 and #4 best-selling Kindle books released last year were both published independently by their authors using Kindle Direct Publishing (KDP), one of seven publishing imprints Amazon has launched. Earlier in 2011, Amazon.com announced its e-book sales now exceed all of its printed book sales; the company reported that it sold 140 e-books for every 100 hardcover books, including hardcovers for which there was no digital edition.

In the US, paperback book sales as a total category are still much larger than either hardcover or e-book sales, but the numbers are rapidly changing. The American Publishing Association estimates that e-books represented 8.5% of total book sales as of mid- 2010, up from 3% a year before. And total sales of digital reading products, which includes the hardware, e-books, screen protectors and other related accessories, could become a $2.5 billion business by 2013, according to market research firm Yankee Group.

Europe, the second largest e-reader market, also rose to its highest volume levels in the fourth quarter of 2011, fuelled by the release of lower-cost models, many of which are ad- supported. “At just £79, the all-new Kindle was by far the biggest-selling product of the festive period,” says Christopher North, Managing Director of Amazon.co.uk Ltd.

The United Kingdom continues to dominate the European market, generating close to half of all Western Europe’s e-book spending last year, according to Futuresource. Hoy says the introduction of Amazon’s e-reader and the Kindle Store to the UK in 2010 was key since the market had previously been fragmented with unbranded dedicated e-reader devices.

In countries like Italy and Spain, the uncertain euro zone climate and the initial lack of local language titles presented challenges to suppliers.

In fact, despite its current sales successes, the entire category of e-readers struggled initially, due, in part, to the natural learning curve as consumers gradually move from physical books to hand-held digital devices. And early suppliers, primarily Sony Corp, but also HP, had the technological know-how to create e-readers but did not supply enough digital content to consumers.

In 1990, Sony released the Data Discman in Japan, and two years later, launched the device in the US. The electronic book reader could only read e-books that were stored on 3.5-inch CDs, a limited supply of which were available.

CORNERSTONES OF SUCCESS

One of the basic cornerstones of book buying is variety, a fact both Amazon.com and Barnes & Noble knew well. Their vast million-title libraries of books and magazines, coupled with strong retail and customer service expertise, made e-book purchase and delivery a much simpler exercise. Amazon particularly understands that speed is critical – consumers get frustrated if transactions online take too long – so it takes an average of 60 seconds to download a book from Amazon.com to a Kindle. And Kindle Fire customers can move seamlessly within Amazon’s entire digital library, from books and magazines to TV shows and movies, paying for each piece of entertainment they purchase.

In fact, the research firm IHS recently reported that Amazon is losing money on the Kindle Fire, which costs approximately $202 to make and is sold for $199. Market analysts say Amazon can cover the loss by selling, books, magazines, movies and TV shows to consumers who purchase Kindle Fire. The typical e-reader has room for anywhere between 1,000 and 5,000 books. With hardware largely similar except for a few different bells and whistles, consumers may end up choosing an e-reader based on their familiarity with the content provider attached to the device.

For example, in Canada, Kobo has over 50% share of the e-reader market, thanks in large part to the name recognition and library of titles of its former primary owner: Indigo Books & Music, a Canadian retail bookstore chain. In November, Kobo was purchased for $315 million in cash by Rakuten, Japan’s largest online shopping mall operator. The buy “could create 50 million potential Kobo customers around the world,” according to Kobo CEO Michael Serbinis.

Rakuten, one of the world’s top three e- commerce companies is expected to promote Kobo through Buy.com in the US, Tradovia in Germany, Rakuten Brazil, Rakuten Taiwan, Lekutian in China, TARAD in Thailand, Rakuten Ichiba in Japan and Rakuten Belanja Online in Indonesia. Kobo has been aggressive with special offers attached to its e-readers, including its one free e-book a month offer throughout 2012 for consumers who purchase the $99.99 Kobo Touch with Offers. Amazon has also driven sales using the same strategy; its Prime Membership offers one free e-book per month.

Barnes & Noble is taking a page from Apple stores and has created free Nook customer service centres in its 703 bricks-and-mortar stores in the US. Anyone with a Nook can read any Nook book for free in-store for up to one hour a day with free Wifi. In a modern take on the classic downtown village bookstore or the beloved neighbourhood library, Barnes & Noble also offers Nook Events and Nook Nights for readers and book lovers to come together.

And, not coincidentally, the Nook centres offer free technical advice to Nook owners, a strategy developed successfully at Apple’s in-store Genius Bars. The retailer is also aggressive on pricing – with over 2.5 million titles, Barnes & Noble sells most Nook books for $9.99 or less, but also offers a selection of books by popular authors that are under $5 each. And, since all fiction written before the year 1900 is in the public domain, the company also offers more than 1 million books that are totally free.

And just whom do suppliers suspect will be purchasing all the e-readers fuelling the new book revolution? In a May 2011 Pew Research Center tracking survey of those who had purchased e-readers, the most likely to own the device were college-educated men and women between the ages of 30 and 49, who make more than $75,000 per year. Men and women were about equal in ownership, but parents with younger children were much more likely to own an e-reader than people without children.

The Pew study found that adult e-reader ownership doubled to 12% as of May 2011, up from 6% in November 2010. During the same periods, tablet PC ownership stood at 8% in May and 5% in November, with 3% of those surveyed saying they own both a tablet and an e-reader.

www.amazon.com
www.barnesandnoble.com
www.futuresource-consulting.com
www.kobobooks.com

Like vinyl, music packaging was scaled back by major record labels way before consumers were ready to let it go. Also, like vinyl, it’s back! With the advent of digital music, it originally seemed that designers were doomed to designing postage size pictures for iTunes, but artists and their true fans have clamoured for more. Designers, of course, have had to adjust to a changing market with less money in it. However, design freedom, in many respects, has made a comeback as fans have begun to buy deluxe packages directly from the artists.

Grammy winner, David Gorman, owner of Hackmart Inc, designs many packages including some for Rhino Records, a label that was always known for their award winning packages. Gorman is nominated this year for his work on Wingless Angels. He says there was a time when labels believed CDs had to be priced at $9.99 at a retail chain, or customers wouldn’t buy them, so packaging was made real simple.

“Consumers didn’t want to spend $18 for a CD in a jewel case, it never felt like it was worth it. Now, we’re done with the argument that the product has to be $9.99 or Best Buy won’t take it. We are in a place where there is a lot of creative freedom.” The question when designing now is: ‘How much is a fan willing to pay?’ From there, a package design can be created.

Tom Recchion, Senior Creative Director for Capitol/EMI, agrees that when the music business started to decline, “and marketing took over the creative, there was less willingness to take a risk in terms of packaging. It took a while, but people started to see that collectors are interested in more than just a jewel case. The labels are outdoing each other now.”

FANS WANT MORE

An interesting example of fans’ hunger for more is the Grateful Dead package that Gorman designed – Europe ‘72: The Complete Recordings – All Music Edition. The package was pre-ordered and sold out on the Dead’s website on the basis of a sketch. “It was the concept for the box.” 7,200 boxes were sold. “The discussion was not ‘How cheaply can we can get it out the door?’ but rather ‘How can we blow their minds?’,” he adds.

Hugh Brown, who won several Grammys for his work when he was employed at Rhino says, “The record labels believed the press that fans did not want packaging even though actual sales figures really didn’t support that assumption. The year Rhino decided to outsource design was our third biggest year.” Both Gorman and Brown admit that work is not as steady as it once was, but more marketing involvement was when budgets for special packaging got slashed.

If only 20,000 copies of a package are made, it sells out, and the label says, “We only sold 20,000 copies,” rather than, “We sold out the 20,000 copies,” then there is a different perception in the marketplace, adds Brown. Now, it’s amazing to see the several different configurations of one title, like the Recchion-designed Beach Boys’ Smile all doing well despite the cost,” he comments. What’s also an interesting change in the industry is that the fans are more interested in how packages come together. For example, Capital/EMI did a webisode which featured the creation of the Smile package.

Todd Gallopo, 2012 Grammy nominee for Chickenfoot’s III, and owner of design firm meat and potatoes, comments that, “The fundamentals of a good package never go away. If you can master those on pennies per unit, then you’ve done your job really well. Designers say they would love to use more unusual materials and inks, but costs prohibit that.”

Phil Yarnall, owner of Smay Design agrees, “I’ll start out with something cool, but the designs get shrunk down and materials changed.” With the economy the way it is, this scenario has become even more common, as Yarnall explains: “I have to find a way to make things more deluxe without spending money. At meetings it comes down to pennies.”

He offers the example of a Janis Joplin package he is working on. It is a double album with a gatefold jacket done to keep costs down without doing a book, “But there is an enormous amount of copy; six or seven different essays from different people. I’ve had to squeeze them in. It’s like a Sudoku crossword puzzle!”

The key now to creating special packaging is to plan ahead. Designers need to be like lawyers. They have to prove the case of special packaging to corporate, they say. “When Smile got on the schedule, I took the initiative to start working with vendors to come up with some ideas,” says Recchion. He worked with printers to create something 3D for the cover.

“I got some very nice comps. When I got the one I wanted, I took it around to the creative pool. It made enough of an impact, so that in the back of everyone’s mind, they wanted to make sure it happened.” With budgets going back and forth, materials being substituted, dimensions changing, Recchion had to fit his vision within a certain limited budget.

While he didn’t have carte blanche, he knew he wanted to retain the cover treatment, “So what was left was ... how do we fill out the rest of the package? Part of it was convincing the powers that be that it was worth investing in.” Of course it helps when the package is for a bigger more established band like the Beach Boys.

FOSTERING RELATIONSHIPS

For a designer, the best relationship to foster is the one with the artist themselves, according to Recchion. “There has always been a conflict between marketing and creative and there always will be, but when you have the artist on your side, it becomes a more creative system.”

Initially, Recchion didn’t have the budget for the lighted box, one of the Smile configurations, but when Melinda Wilson (Brian Wilson’s wife) found out about the idea, she got very excited and helped convince people that it was a good thing. “Then, I spent a year and a half working on the project.”

Yarnall who designed AC/DC’s BackTracks with a working amp believes that dealing with the artist direct is ideal. “If you strictly deal with the label, it can hold your creativity back. For big bands like AC/DC, the label will pull out all the stops; not true for a lesser known band. When working with Indie labels, you have more creative control, but that’s not always easy either. Sometimes you have to jump through hoops because there is a lack of experience in knowing what it all costs.”

Artists are saying, “Design whatever you want and then we’ll figure out how to make it,” comments Gallopo. “That’s all well and good if the artist is already signed to a record label, like Gabe Dixon who is on Concord Records. For One Spark, “I made a diorama by hand... two feet high; nothing done in Photoshop. It felt like the 1970s!”

However, that wasn’t the case with Chrysta Bell’s This Train which got scaled down because there was no one to pay. “What package design comes down to is problem solving, and that’s kind of the fun of it. It’s about making the package cool and not spending too much,” believes Josh Cheuse of Sony, who recently designed Tony Bennett: the Complete Collection, which includes 74 discs and a 250 page book.

“It’s about building trust. Artists don’t know about procedures and prices.” Cheuse recreated all of Bennett’s albums with replica sleeves. The box looks like a collection of LPs on a shelf. The title sold out at $499 with an autograph. At the time of writing, the package was on backorder or available without a signature for $399. It is being sold from Bennett’s website and Barnes and Noble only. Cheuse says that, while direct to consumer sales are growing, the loss of record store browsing really hurts the market.

However, there are ‘lifestyle’ stores that want to carry the ‘cooler’ titles. Cheuse mentions a project done for the chain store Supreme, which is an international skate board type store. “We branded a Miles Davis CD with the Supreme brand. The kids bought it because it says Supreme on it and they want everything that says that on it because it is a limited edition and it is cool. Now these kids are turned on to Miles Davis.”

This boutique mentality has helped Gorman as well. For example, back in the 1970s there was a Bobby Charles Record.”This is a record that didn’t sell much, but we were hired recently by Rhino to create a new expanded version with a great packaging budget because they are selling direct to consumer.” Designing today is a smaller business, “But it is still profitable. Fans are willing to spend money if we give them something that is worth it.”

Brown offers a similar story about the creation of the new Kevin Gilbert’s Shaming of The True package.

Back in 1999, while the titles didn’t sell much, it was nominated for a packaging award. Recently, there was other material found, so Brown was asked to create a new package. He designed a package that includes: a 12” x 12” quad gatefold container with all the lyrics, original liner notes, plus new photos and an alternate cover drawing, fourteen 12“x 12” frameable quality prints of all the art from the original book and a frameable lead sheet of Long Day’s Life. The CDs themselves are mounted on a board with two alternate drawings and a full colour photo of Gilbert on the reverse. About 1,000 copies were made to be sold direct to the consumer, and the package was released just before Christmas. At the writing of this piece, Brown says 400 copies have sold.

THE FUTURE

What will the future bring for album art designers? Is there an art model for iTunes? Gorman says physical and digital markets are separate. “If someone is buying on iTunes, they are comfortable with the fact that they are not buying a product to take up shelf space. I don’t think they care to print stuff out. Digital packaging is going to come into its own. It is likely to be more interactive with updating and remixing for example,” says Gorman.

However, there are other ways to boost business, he believes. “When Rhino let go of their whole art department and editorial department, they took us on. We do design as well as the back end. We hire the writers, do the proofing and deadline management, but Rhino only has to write one cheque! We can also bring on other designers if it’s something we are not necessarily good at.” The point is that business may be different today, but it can remain profitable with patience and a little creativity.

Gallopo concludes that it’s important to remember when you design something – be creative, but be reasonable. “It’s important to design something that can be made at a reasonable cost, so that no one is disappointed and business will remain strong.”

www.hackmart.com
www.capitolrecords.com
www.emimusic.com
www.rhino.com
www.meatoes.com
www.smaydesign.com

Interactive documentaries have traditionally been conceived as a genre allowing users to select and explore different informational segments, elements, and themes in a framework largely circumscribed by the producers. Now, that concept is expanding significantly with the rise of ‘collaborative documentaries’ that have adopted crowdsourcing elements and extensive use of user-generated content. n the process, interactive documentaries have become more vital media forms and afforded more varied perspectives on diverse issues and topics.

Jesse Shapins, co-founder of Zeega, which has developed an open source platform for interactive documentaries, believes collaborative documentaries are a “growing genre that will transform the media landscape”. He characterizes them as “extended documentaries” that espouse a “new attitude towards reality” that span multiple media. They essentially represent a “redefinition of the production model” by harnessing “the properties of networked media to create collaborative content”.

Collaborative documentaries represent a new model of collaborative structures between media makers, broadcasters, and audiences, explains Shapins. According to him, one of the key challenges with those documentaries is “building a collaborative structure that is meaningful and engaging”.

One of the significant benefits of collaborative documentaries is their ability to enable the “integration of multiple perspectives about a particular topic or place”, according to Shapins. Collaborative documentaries allow for “common elements to be approached from many different perspectives”, he elaborates.

In the view of Shapins, documentaries about places are “uniquely suited” to the collaborative model, as they provide a “common space” where “many different perspectives” can be offered about those places. Overall, collaborative documentaries work best when they centre around “overarching” themes and structures, he asserts. “Not all documentary subjects lend themselves to the collaborative approach,” he notes.

Shapins cautions that production costs for collaborative documentaries aren’t necessarily lower, especially because of the costs involved with managing communities connected with those documentaries. One of the key challenges of collaborative documentaries is proper community management, he says.

Concerning the quality of audience content in collaborative documentaries, Shapins stresses that such documentaries should always ensure that such audience material is “sufficiently engrossing and meaningful to fit into the larger structure” of those documentaries. Generally, audience photos are more useful in those documentaries, he’s found. Producers of collaborative documentaries tend to rely more on their staff to produce audio material and edit material in general, as those tasks are more challenging for audiences, Shapins adds.

Zeega’s goal has been to provide tools to enable easier production of collaborative documentaries.

The company has partnered with the Association of Independents in Radio on their project called Locallore, which will support ten different media makers to innovate new forms of public media at radio and TV stations, explains Shapins. These media makers are producing local radio or TV documentaries about their particular locations.

Zeega is also working with a local artist on a collaborative documentary called Cloud of Unknowing, which entails developing a “social history of the impact of toxins on the place where the artist grew up, one of the first superfund sites in the country”.

In addition, Zeega is working with UnionDocs on a large scale collaborative documentary with 12 artists on the history of South Williamsburg. The multi-platform documentary will integrate online content and physical installations to create a historical document about that location. Union Docs has been experimenting with collaborative documentaries for a long time, points out Shapins.

LIVING VERTICALLY

One of the larger scale collaborative documentary projects is Highrise, which was launched by the National Film Board of Canada in 2009, and will run until 2014. The web documentary is designed to show “how people live vertically”, and envisions “how high rise living might be reinvented”, according to Gerry Flahive, the project’s producer.

Basically, Highrise is designed to enable collaborative storytelling, explains Flahive. According to him, the goal of collaborative documentaries such as this is to “involve users along the way” rather than treating them as mere “subjects”. Flahive stresses that Highrise was intended as a “web documentary” from the start, and not as a TV program.

Highrise’s latest interactive documentary, One Millionth Tower, focuses on life in a single apartment in Toronto, and grew out of a “community media workshop” held in that building, says Flahive. The producers of Highrise worked with “photographers, professors, and residents in 13 cities around the world” to yield 13 stories in its documentary Out My Window. For that project, which was launched in 2010, Katerina Cizek , the documentary’s director, communicated with production teams on the program electronically via ‘Skype – Out My Window- Participate’, and gave users an opportunity to submit their photos, views, and stories relating to the program. Over 800 photos submitted by users were eventually used on the documentary.

The site for One Millionth Tower, one of the Highrise documentaries, was accessed “tens of thousands of times” just a few days after its November 5th launch on Wired.com, reports Flahive. He points out that the collaborative documentaries part of the Highrise project are very diverse – some of the collaborations are traditional and others are untraditional. Also, some are “very intense” and others are less so. Although the documentaries use input from many different sources, they still retain “the signature voice of a filmmaker”, who serves as an “author of original content and a creative curator of content.”

For the documentary Out my Window- Participate, the producers created a Flickr site that enunciated the program’s philosophy and was used as “an entry site for users to submit photos and other material”, reports Flahive. That material was then “vetted by creative collaborators to ensure that the content selected was good and meaningful”. Also, that content was presented in a “360 degree” context that lived up to “our high standards,” he adds.

Flahive observes that some interactive documentaries overall “cost less because they are often primarily photo-based” and the producers “saved considerably on travel cost”. At the same time, he acknowledges that such projects incurred higher costs for innovation because the producers experimented with new web technologies such as WebGL and Popcorn, which “took some time to work out”.

ENGAGEMENT AND SHARING

Australian Documentaries developed a “collaborative documentary called Water Stories, focusing on water issues of particular concern to residents of Western Sydney. The program had its red carpet premiere in Western Sydney in November, while the website for the documentary went live last March, reports Kylee Ingram, Head of Production at Australian Documentaries. The documentary utilizes a process called CrowdTV, and was intended to allow viewers to “take part in every step of the documentary’s creation”, she says. Ingram believes “environmental topics are perfect for collaborative documentaries” because they “focus people and bring them together over a common goal.”

As a result of this process, Water Stories engendered “deep engagement and sharing around” the program’s environmental subject, reports Ingram. Viewer input in the documentary ranged from the 30 people that actually proposed ideas for the program to the few hundred that commented and voted on the ideas presented by the 30 viewers, according to Ingram. Buoyed by the response to Water Stories, Australian Documentaries plans on opening up the process in “the next generation of CrowdTV in order to allow viewers to select producers and directors for particular films they’d like to see, says Ingram.

Significant opportunities lie ahead for collaborative documentaries, especially with the rise of online video and multi-platform content. Flahive has found growing interest in collaborative documentaries among documentary filmmakers, and believes there will be “considerably more collaborative documentaries” in the near future.

www.zeega.org
www.airmedia.org
www.uniondocs.org
www.highrise.nfb.ca
www.australiandocumentaries.org

“The benefits of connected TV are very clear but the challenges faced by service providers in producing content for the profusion of different connected TV platforms is proving to be prohibitive,” said Maynard. “Because an application has to be written and then updated for each and every platform it is driving many companies away from the market, even though the fundamental desire to enter is there.”

ScreenConnect allows media companies to access and deliver services to the maximum number of connected TV and tablet outlets without having to devote the significant time and cost associated with writing applications for each of the many platforms available.

Maynard added: “ScreenConnect has been built to be adaptable, not just for current platforms but with a view to developing platforms too, including those that are yet to emerge. The key to this is high level language that the system uses to define the content and structure of the service and how users navigate through it.”

ScreenConnect provides the platform to build a service for connected TV platforms, including the navigation structure and the definition of content panels across that service. A browser-based tool is used to edit and manage content with flexible control of content display. That content can be global or platform-specific, with sites generated in a platform-neutral format for delivery to display applications.

Transactions can be supported by custom plug-ins while different navigation types – remote control or touchscreen, for example – can also be handled. It also supports code injection for specialized requirements. ScreenConnect handles the variation in HTML-based platforms and delivers applications through its ConnectWriter module, a key component for multiple platform delivery. Its core code takes output from the content management system and builds pages according to location; platform-specific code handles the differences between receivers. Site-specific code then takes care of custom requirements while cascading style sheets control the look of the service, optimized for each platform.

Maynard concluded: “Broadcasters, irrespective of size and genre need to take a look at the opportunities and be assured that the major market entry barrier presented by connected TV can now being addressed by ScreenConnect.”

www.screen.subtitling.com

Warner Bros is using EIDR to create a streamlined delivery system for online content distribution, a function highly dependent on the use of accurate product IDs and rights information. “To further this goal,” offers Darcy Antonellis, President of Warner Bros Technical Operations, “we’ve invested in several technology initiatives to streamline and automate our interactions with retailers, vendors and consumers. EIDR is a key component of these initiatives, providing a global, unique identifier for content assets as they move from creation to consumption. We are actively integrating EIDR into our content workflow and are working with retailers like Microsoft to incorporate the standard.”

“Our goal is to add EIDR IDs into our data products and, by turn, help integrate EIDR into the global entertainment data ecosystem,” says Amer Saleem, Director of Technology at Baseline, part of the New York Times Company and a provider of film and TV information to the entertainment industry, and currently mapping EIDR IDs to its database. “The notion of a universal ID is an exciting one that we believe can help our consumer-brand clients create a more engaging end-user experience.”

Walt Disney Studios is also using the ID registry as part of its infrastructure that supports multiple digital initiatives. As Arnaud Robert, the studio’s SVP of Distribution Technology, explained in a recent statement: “We have implemented EIDR into our metadata and internal digital workflows. Working with our distribution partners we intend to extend its usage to our various distribution channels. EIDR plays an important role in digital-media distribution.”

“We are anticipating that the use of EIDR labels will greatly assist both distribution channels, on-line retailers and video-on- demand suppliers,” says Kip Welch, EIDR President and VP of Business Development at MovieLabs, a non-profit R&D joint venture tarted by six major film studios, comprising of Paramount, Sony, Fox, Universal, Disney and Warner. “Walt Disney Pictures, for example, plans to use EIDR metadata within its digital distribution infrastructure, and Warner Bros for on-line retail business, while Comcast and CableLabs – plus other cable operators and MVPDs such as Cox, Shaw and Charter – are looking at video-on-demand applications. We see 2012 as the year that marks the beginning of a volume ramp in certain digital workflows” that involve file-based infrastructures.

A founding member of the EIDR initiative, Rovi Corporation has been working behind the scenes to seed the registry with metadata about the various digital assets it handles while developing content databases for clients. “To date we have provided EIDR entries for over 200,000 file assets,” explains Adam Powers, VP of Technology. “Because we spend time attaching metadata to digital assets, we are a strong advocate of a centralized, standardized registry of media labels. It is a time-consuming process, but one that will deliver long-term benefits for the M&E industry – as they say: ‘A rising tide lifts all ships.’

“With the growing popularity of second- screen media that provide additional information [about TV programming and films], EIDR will be an invaluable source tool for attaching specific metadata about each segment,” thereby enabling automated links to “details of music being used, for example, or products appearing in each scene – that degree of granularity will enhance the viewing experience, in addition to offering new monetization opportunities [for content-delivery channels]. Consumers might also be able to search interactive databases to reach related material across a number of platforms. In that respect, EIDR can serve as one of the backbones for the UltraViolet initiative across multiple delivery mechanisms.”

AN INTEGRATED STRATEGY

It can be argued that content providers are in the best position to generate EIDR labels from the first day of production planning, thereby establishing master or ‘parent’ registry entries that can be linked through hierarchical relationships to each of the subsequent assets generated during post production of film and TV shows, extending to foreign- language versions, for example, or versions destined for mobile and tablet delivery.

“In an ideal world, that [title-loaded scenario] makes sense,” Powers agrees, “but we can still work from the delivery end by generating appropriate EIDR tags and then working backwards with the content providers to ensure that we use consistent labels for the various media elements. It will be a trickle-down process, with CableLabs and Comcast utilizing EIDR entries for second-screen material and TV everywhere. And with Warner Bros and Disney continuing their proof-of-concept evaluations while seeding EIDR entries, we have an integrated approach.”

In addition to implementing a continuous seeding process from its program database – by scanning incoming data and registering all previously unregistered records that meet minimum EIDR requirements – Rovi also stores EIDR asset IDs from previous and future runs in its content warehouse, and delivers those IDs within existing data feeds to its data clients. “The seeding process is slated to occur on a monthly basis,” Powers says. “Record types eligible for seeding include movies, series, seasons, episodes and one- time TV programs.” On average, Rovi adds between 10,000 and 15,000 new records each quarter to EIDR; it recently started to work with CableLabs to support the new Video Service ID initiative.

For multi- channel video programming distributors, including cable, direct-broadcast satellite and DSL providers using IPTV, EIDR offers a number of operational advantages. “The most important,” says David Agranoff, a senior architect with CableLabs, “is multi-platform viewing. The same programming can be identified by a customer across a linear-delivery system, a VOD server or maybe a content server streaming media via IP to mobile devices. Then, using EIDR entries to identify the specific file needed for a different platform, the same programs [in different media formats] can be delivered to a living-room TV, for example, and then picked up at the same point on a smartphone or tablet in another location.

“End-user metadata, including reviews, cast biographies and comments from friends, for example, can also be linked to the EIDR labels and delivered interactively to cable customers. Content authorization for TV everywhere – including UltraViolet licensing – could also be a major use of EIDR labels.” Other uses include identifying specific instances within a video stream using standard SCTE 35 cues inserted within the media file, to monitor viewing habits and also offer media- specific messaging about upcoming episodes, for example, as well as dynamic advertising that could be used to deliver contextual and/or viewer-targeted messages.

“EIDR's combination of content and service identification allows cable operators – and other MVPDs – to execute new and exciting use cases,” Agranoff concludes. “But active participation by video supply-chain partners, including programmers, metadata creators and others, is essential for its success.”

At Universal Studios, a member of the Comcast community, EIDR is being evaluated from both content-distribution and content- creation perspectives, with IDs ideally being generated at the green-light stage, and then following the film project through production and post-production into distribution. “EIDR also offers exciting potential for UltraViolet,” confirms Joseph Cates, Universal’s CTO and SVP of Technology. “The recent release of Cowboys & Aliens [co-produced with DreamWorks Pictures] was our first with an UltraViolet capability, in addition to a DVD, Blu-ray and digital copy. We used EIDR to help track assets across UltraViolet and other physical and digital products. With so many different numbering schemes, tracking products and sales is currently too complicated. EIDR will enable content to be identified uniquely and conveniently across all operations.”

“EIDR will definitely reduce the ‘Digital Tower of Babel’,” asserts Eric Iverson, VP of Information Technology at Sony Pictures. “We are actively developing ID entries and, to date, have registered our initial UltraViolet titles. We are currently in the process of matching about 1,500 feature titles as we broaden our registrations. We are actively seeding features so that we can have master titles available for downstream usage and to support the creation of ‘Version’ EIDR records. EIDR is a global media identification mastering solution from ‘Title’ identification to the ‘Version’ (Edit) levels, and can accommodate lower [hierarchical] levels as necessary.

“For example, one of the features from our Men in Black franchise had a number of versions, including the director’s cut, the original theatrical release, and so on – all with slightly different content; this can then translate into hundreds of different SKUs and digital bundles. The EIDR structure is flexible enough to handle a number of different implementation levels as needed.

“As a film company, we believe in starting by accurately registering the ‘Title’ level first, since you cannot accurately register versions if you cannot identify uniquely the title of the original project; how do content types relate to one another? We need to get the structure right – it’s a bit like pouring concrete, since we will all live with the results, and changing master records is not a trivial task once they have been utilized. After all, each studio currently has its own metadata-based asset labelling scheme and has endured the process of ‘getting it right.’ Which is why we are spending time on each key structure for the EIDR registry, and how to populate them. The proof of concept projects are proceeding well; we have resolved the majority of workflow issues.

“Our approach is pragmatic; we need to deal with the practical world, and incorporate real-world experience. Rovi, for example, is doing a great job at the supply-chain end of the delivery pipeline, and we need to agree on labelling criteria. HITS and DEG continue to work in parallel with the EIDR initiative to extend the granularity of the registry entries, and make sure we get it right first time out. The structure of the registry, developed by the content creators, will require 30-40% of our effort; the remaining 60-70% needs to be expended on the implementation structure, or how well we operate the EIDR-based directories. Our approach needs to be systematic.”

Greg Gewickey, VP of Technology with Deluxe Digital Distribution, considers that “EIDR offers a valuable way to facilitate information and make it interoperable between different parties. We need to ensure that we deliver the right movie to the right person, but does it have the correct subtitles? Is it the director’s cut? Does it have the correct language soundtrack?

“We are currently in ‘evangelization mode,’ populating our databases with EIDR information when it is available, and matching assets to known labels. Deluxe provides OTT deliveries for various customers, for example, where we currently use Tribune Media Services’ IDs; mapping these IDs to EIDR would make them more universally usable within our systems. If we know the EIDR label we can begin to implement that,” in addition to the existing labelling schemes.

Regarding alternative metadata labelling schemes, many European media operations are utilizing ISO’s International Standard Audiovisual Number. “ISAN has traditionally been used for licensing and rights management,” Gewickey considers. “But it lacks the depth of labelling IDs for the wide range of file versions we encounter.”

EIDR President Welch agrees: “ISAN primarily targets title-level IDs; it cannot handle transactions at a granular level. Put simply, while ISAN was a good idea, it isn’t deep enough for many commercial applications. EIDR will continue to work with European and other vendors and content aggregators in parallel with ISAN,” which continues to offer rights-issue solutions. “But EIDR offers a richer, more complete ID scheme for broader use within the entertainment industry.”

Welch foresees eight primary advantages being offered by EIDR: Coverage, or its ability to generate unique identifiers for all types of digital AV content; Flexibility, by supporting a wide variety of objects, hierarchies and relationships; Cost- effectiveness, offering economic sense for large volumes; Interoperability with other registries and ID schemes; Scalability, through its ability to handle very large volumes of registrations at production-level SLAs; Extensibility to accommodate new types of future assets; Value-added Services Support to augment a vendor’s ability to offer value- added services and applications; and Accessibility via open search and query access without restrictions on data usage.

“EIDR has resonated with many participants within the digital supply chain,” Welch concludes. “The adoption of EIDR by industry leaders – and the support from DEG and HITS – reflects a need for universally unique identifiers in the supply chain, and the ability of EIDR to meet this need effectively and at low cost.”

In addition to the sources mentioned within this article, Alex Terpstra, CEO of Europe- based Civolution, which provides a range of solutions for identifying, managing and monetizing media content; and Usha Srinivasan, Executive Director of EIDR initiatives at MovieLabs, also provided invaluable insight into EIDR and its application.

www.eidr.org

WHAT IS EIDR?

The recently unveiled Entertainment ID Registry – EIDR – was designed as a universal metadata labelling scheme for uniquely identifying digital assets that need to be transferred between content- creation and content-delivery companies, and then dispatched to consumers via a variety of on-line mechanisms. It was launched in January 2011 and spearheaded by MovieLabs, CableLabs, Comcast and Rovi Corporation – with expanding support from key players throughout the TV and motion-picture industries, and the international coalition is organized as an industry non-profit governed by a Board of Directors. EIDR is made up of key stakeholders from content owners, video post houses, content distributors, retailers, entertainment services and technology providers, plus firms within the international movie and TV digital distribution ecosystem. Support has also been forthcoming from The Digital Entertainment Group (DEG) and Hollywood IT Society (HITS). EIDR is a global B2B registry for unique identifying of movie and TV content that results from an industry collaboration among content owners, distributors and cable operators, retailers and other key stakeholders. It tracks all commercial content down to the product and SKU level, including edits, clips, composites, encodings etc. EIDR is run as an industry non-profit on a cost- recovery basis. It is a universal Digital Object Identifier (DOI) that uniquely identifies an audio- visual object, and is similar to a UPC code used to identify physical packaged goods. EIDR can be used for both physical and digital video objects that are part of the movie and TV supply chain; it is purely functional without any implication of ownership, making it persistent enough to remain the same despite any change in control or ownership of the underlying asset. Its structure consists of a standard registry prefix, the unique suffix for each asset and a check digit.

It’s a tough world out there, particularly for the middle tier of the media services business. They’ve watched as demand for physical media products has shrunk and the largest of the international media providers have consolidated onto each other. The middle tier itself has seen its own share of consolidation and attrition, besieged both by muted demand for physical media and a pernicious global economic slowdown.

But instead of a Balkans type of reaction, in which a fractured landscape of related entities, sensing a threat from all the others, turns on itself, this cohort has found ways to apply American revolutionary Founding Father Benjamin Franklin’s nostrum that, “We must all hang together, or assuredly we shall all hang separately.”

For instance, the former American Video Duplication Association (AVDA), formed 22 years earlier and which saw the first shoots of an independent VHS, audio cassette and compact disc manufacturing base, reinvented itself in this decade as the American Independent Media Manufacturers Association (AIMMA), a digital adaptation of the original, advocating physical media for advertising, direct marketing and, most notably, corporate market applications, sectors that still buoy the middle tier today.

But in 2004, a few of this same group took a different tack, creating the Colonial Purchasing Co-Op, a co-operative buying group that set out to push back against the dramatically changing circumstances of media manufacturing in the middle, including rising materials prices and a creeping regionalism that in some ways was isolating this tier in the era before Facebook and LinkedIn.

Colonial Purchasing (the name derives from the fact that the founding members numbered 13, the same as the number of former American colonies that declared independence from Britain in 1776, and that both groups had their first official meetings in Philadelphia, briefly the capital of the post-colonial United States) has since grown to 35 member companies, including several in Europe – most recently, kdg in France and Austria, CDA Germany, Duplico in Spain, AOD in Holland and Artech in Italy. It had already expanded beyond US borders with members AOD in Jalisco, Mexico and RSB IMEDIA in Saint-Laurent, QC, Canada. Colonial announced that it expects membership to grow by as much as 20% by Q1 2012 as it expands its reach further into Europe and Latin America, with growth driven heavily by the prolonged economic downturn, compelling media makers to seek out better materials and services pricing.

At a time when the top tier of replication facilities continues to contract – Sony DADC’s iconic Pittman, New Jersey plant was the latest to shutter, in April 2011 – the group’s replicator/duplicator base remains broad, ranging from large firms such as founding member OEM and JVC America, which joined in 2011, to regional replicators like Replicopy Digital Media Center and Duplium. The presence of large companies like OEM, JVC and Technicolor underscore how critical cost-saving strategies have become for all optical disc makers.

MORE THAN PRICING

In fact, Colonial Purchasing has been about more than materials pricing for some time. The co-op’s President, Doug Franzen, points to mastering facilities such as Synchronicity and G3, as well as packaging developers and authoring houses that both purchase materials such as targets but also provide services that replicators and duplicators can utilize at the same kinds of volume discounts as raw materials purchasers. For instance, Colorado Springs-based MAM-A offers discounted recordable CD, DVD and Blu-ray discs to fellow members. They’ve added content-oriented members in recently years, including music label Rainbo Records.

As corporate, educational and promotional markets head tentatively into their own Blu-ray era, member media manufacturers have been able to access Blu-ray replication services from Austria-based kdg at a discount by virtue of the fact that all member Blu-ray jobs, regardless of run sizes, are looked at on a single monthly volume basis. (The original arrangement was with InfoDisc in Germany, but the liquidation of that company in December 2011 saw InfoDisc founder Michael Gutowski move one of the InfoDisc lines to kdg's facility.) Individually, small runs would likely not find Blu-ray replication services available domestically, but using FTP transmission of master files from the US to Europe, the operation is as transparent as if the work were being done locally, with a seven to ten-day turnaround in most cases.

Furthermore, Franzen points out, the wide range of capacities and types of services within Colonial also allows members to offload work between them, much the same as took place on the open market during the optical disc’s heyday, thus reliably and affordably levelling the loads for members at peak times during the year. (Though Franzen notes that the nature of the middle tier media manufacturing has been less vulnerable historically to peak extremes due to the fact that it’s not as heavily dependent on entertainment products, which cause workflow logjams in Q3 and Q4 every year for the largest replicators.)

“We’re operating across the entire range of the media manufacturing and distribution industry,” says Franzen, who spent 30 years as COO of South Florida-based replicator Evatone and two years as Executive Vice President of business development at replicator OEM in Charlotte, North Carolina before taking the helm at Colonial Purchasing full time in 2006. (Franzen also operates Infiniti packaging, a specialty packaging company based in Fort Mill, South Carolina, from where he runs Colonial Purchasing.)

Franzen says Colonial’s success is due in large part to the fact that it’s kept its focus narrow. “We’re a buying group, not a trade organization,” he explains, noting that it operates on a not-for- profit model, with any additional revenues being returned to the members in the form of rebates or applied to the costs of the group’s annual meeting. Revenues come in the form of membership fees: members that regularly purchase raw materials through the group pay dues at US$1,250 per year; non-buying members, which benefit from service discounts, pay US$750 per annum. Additional revenue comes from sponsorship programs that range from US$2,500 to US$25,000 annually, as well as fees from speakers and presenters at the annual event.

However, Colonial Purchasing has sought synergies with other industry organizations. It has co-located its annual meeting with that of AIMMA several times. Most recently, in 2010 and 2011 it held its meeting coincident with the Europe-based MEDIA-TECH trade group, in Las Vegas. It reflects an increasingly global view on Colonial’s part. The joint event Colonial held with Media-Tech in 2010 was the Frankfurt-based organization's first US event since 2008.

In 2012, Colonial, MEDIA-TECH and AIMMA groups will stage a co-located event in Las Vegas in April. That will also reflect how each organization has changed against the landscape of the evolving industry, with a smaller but internationally focused MEDIA- TECH synergizing with an expanding Colonial and an increasingly diverse AIMMA constituency, underscoring the increased emphasis on cutting materials and operating costs in a tighter media content environment.

“We’ve become a better fit,” says Bryan Ekus, Managing Director of MEDIA-TECH, which also recently launched the North American Replicators Association, a subgroup aimed at the media manufacturing base in the US and Canada and a strategy to expand the group’s reach beyond its traditional equipment-makers base.

“We provide trade information like anti-trust protection, while [Colonial Purchasing] offers cost savings on materials and services. We have a good presence in Europe and Asia, while they and AIMMA have a good presence in the US. We’re well-positioned to help [Colonial Purchasing] expand the buying group further into Europe and help them increase their purchasing leverage, which will also help our members, who’ll be able to take advantage of Colonial’s volume buying power. That leverage will just get better as they go global.”

A CRITICAL BALANCE

However, both Franzen and Ekus are acutely aware of the importance of maintaining a balance in that leverage. For instance, as price pressures have increased as a result of shifts in demand for polycarbonate, raw materials suppliers have either spun off their materials division, as GE Plastics did with Sabic and Dow Chemical with Styron, or shifted emphasis to other polycarbonate markets with higher margins, effectively reducing potential supply of polycarbonate needed for optical disc manufacturing. “We have to be careful as an industry on how we pressure pricing,” says Ekus. “If we push prices too hard, we’ve seen materials providers moving out of the market.”

Franzen further notes that several major Asian polycarbonate suppliers have essentially pulled out of the optical disc market due to the growing strength of general-purpose polycarbonate markets elsewhere. Nonetheless, a significant drop in oil prices in August and September and oversupply further reduced polycarbonate prices in 2011 even as suppliers dropped out. That offered substantial relief for Colonial Purchasing members after the steep price rises of 2008 through 2010, but Franzen cautions that too much of a good thing can be a problem, as well.

“As capacity increases as demand drops, the price falls along with it,” he explains. “That’s good to an extent, but we don’t want to see pricing get to a place where manufacturers can’t make a reasonable margin. “We don’t want to negotiate ourselves out of suppliers.”

Whatever savings Colonial members have enjoyed as petroleum-based products have declined in cost might be more than offset by increases in other necessary materials. Nickel, for instance, used in mastering, has continued to increase in price until very recently as part of an overall rise in commodities prices in the last year, as investors sought refuge from falling equities prices and bond yields. Franzen says he renegotiates member pricing for raw materials every three months or so on average. That allows him a quarterly hedge against price shifts in a volatile materials market.

As Colonial reaches towards the limit of available suppliers for the conventional raw materials and consumables that replicators and duplicators use, he’s also been looking into sourcing other types of basics that members can use and access discounts on. These include office supplies, ink and toner, and propane gas. As more once-regulated key services move into competitive market models, such as commercial electricity, he’s also investigating negotiating prices on overhead items such as utilities, HVAC equipment and even energy auditing services aimed at helping members reduce their operating costs.

“We’re always looking for opportunities, to find a manufacturing plant that might be able to apply its capabilities to something that our members need,” Franzen states. “What we’re doing is shifting the focus somewhat to fulfilling some of our members’ infrastructure materials needs. That’s an ongoing process.”

Specialty materials, such as bonding materials and coating lacquers, offer fewer market options. But Colonial offers those vendors a broader market that can help them level their sales over the course of a year even as it helps Colonial members gain better pricing. For Instance, Sony Chemical is a Platinum-level sponsor of the group and is the official supplier of those kinds of consumables. Process Technologies & Services has a similar though non-exclusive relationship with the group for supplying sputtering targets.

In an industry that has had a mixed record when it comes to organizations – many remember the friction between the once- dominant REPLItech trade show and MEDIA-TECH a decade ago as the optical disc juggernaut began to stall – Colonial Purchasing members seem satisfied. Mary Reeves, President of Spinergy, a mid-sized replicator in Rochester, New York, says she’s happy to see the membership grow and increase the group’s buying range and leverage.

“We save far more in discounts on polycarbonate alone than the $1,250 we spend on membership every year,” she says. “Doug works hard and does a phenomenal job. Colonial has been a bright spot in a tough industry.” (Colonial buys about 30 million pounds of PC annually, it stated in an email.) Reeves says she expects the annual meeting – scheduled for 18- 20 April 2012 at the Wynn Hotel & Resort in Las Vegas – will take on new significance now that Colonial, AIMMA and MEDIA-TECH will do it together. It’s not just about discs anymore, “though we still do plenty of those,” she quickly adds. Rather, she’s looking forward to discussing alternative digital communication and messaging formats, from flash drives to wireless. “Colonial is becoming more than a buying resource – it’s an information resource for the members, too.”

The future of media manufacturing, distribution and related products and services is still unclear. Surveys have determined that demand for optical discs, while steadily diminishing, won’t disappear anytime soon. Unit pricing will continue to decline, and that will put a further premium on cost control, and that’s where Colonial Purchasing shines.

Franzen has set a goal to hit 50 members by the end of 2012. It still remains to be seen if Blu-ray will gain traction in the corporate, education and advertising markets that are the bread and butter of many of Colonial Purchasing’s members, but he’s also been looking into new technology areas off the beaten path of media, such as how members might be able to take advantage of the nascent legislatively driven mandate to move lighting from incandescent to LED and other formats. (It’s not as far-fetched as it might appear: digital signage is a fast-growing communications and messaging market sector that could complement more conventional media formats like optical disc; several replication equipment manufacturers in Europe have also tried applying their thin-film expertise to other tangential fields, such as solar panels, with varying degrees of success.)

But as imaginative as Franzen’s ideas may be, he’s sticking with Colonial Purchasing’s core mandate. “We’re not trying to be all things to all people,” he says earnestly. “We’re just trying to be the best we can at our main mission: helping members control their costs and keep their businesses running profitably.”

www.aimma.org
www.colonialpurchasing.com
www.media-tech.net

UK Government Minister Ed Vaizey was due to keynote the Annual General Meeting of the British Video Association. But he pulled out and his place was taken by Luke Johnson, Chairman of private equity house Risk Capital Partners Ltd and former Chairman of Channel 4.

Vaizey is marginally more clued-up and frank than most of the Ministers who have toyed with the UK movie and music industries over recent years, but the BVA surely got more food for thought from Johnson.

“It’s been very helpful to your industry that it still takes so long to download a movie,” he said in an on-stage ‘fireside chat’ with BVA Director General, Lavinia Carey. “If people could download video at the same speeds as music you would have been pirated to death. “Amazon and Apple are becoming ever more powerful. All digital business is concentrated on the West Coast of the US. Amazon now owns over 50% of e-commerce in the US. That’s scary. They take a big share and don’t invest in content. Google is parasitic. Its advertising revenue is going to Google’s HQ in the US. Why aren’t more people in the content industry shouting about this? They are cowardly. Google should be paying more tax in the UK, moving into creating content and paying a levy on content from YouTube. Google is a just a bigger, posher version of Pirate Bay.”

There is another way to look at this though. It’s all too easy to lose digital content stored on a PC or portable player or cloud. So, like a lot of older folk, I still collect my music and movies on discs. But buying discs gets harder every day. The music and movie companies want people to buy or rent digital copies because it is cheaper than replicating, warehousing and distributing. As a result, HMV is the only big disc chain still in the game, and the company is hurting and trying to move into gadget hardware. I am often forced to use Google and Amazon to buy discs.

Replicator MPO is the latest company to pin faith on disposable, limited play discs as an alternative to rental or download. Previous systems – SpectraDisc, Flexplay and EZ-D – were trialled in 2003/4 and flopped. They relied on dyes trapped in the disc surface which changed colour after removal from a sleeve and exposure to light, so the player laser could no longer read the disc.

The new MPO system uses a corrosive fluid, which slowly destroys the vital Table of Contents that digitally indexes a disc's content. Once the TOC has gone the disc will not play.

MPO unveiled the system by giving everyone attending the BVA AGM a sample DVD, Michael Flatley Returns as Lord of the Dance. The DVD sleeve is labelled as “compatible with all DVD players...for 48 hours after its first viewing”. I tested a copy and it still played normally after 24 hours; after 48 hours the DVD would not play, exactly as per the sleeve note.

Previous disposable discs were criticized on environmental grounds. The sample MPO sleeve assures: “This product respects the environment...the DVD and sleeve is recyclable”. But MPO was cagey on technical details, saying only that the corrosive fluid is “like saline” and harmless. A little detective work soon told more.

MPO’s sample DVDs referred to a web site (www.dvd-d.com) which referred on to developer FDD Technologies AG of Zug, Switzerland (www.fddtechnologies.ch).

FDD calls the disc ‘DVD-D’ and patent searches revealed eight international filings by FDD Technologies in 2004 and 2006, of which granted US patent 7,914,870 from Patrick Larroche explains the system most clearly. A sticky fluid, such as a mix of water and glycol, with corrosive acid or alkaline additive, is trapped in a reservoir under the disc surface, near the disc centre. The centre of mass of the disc does not coincide with its centre of rotation. So when the disc spins in a player it is slightly unbalanced and this causes vibration which moves the corrosive fluid into contact with the metal TOC. As the fluid moves it rebalances the disc and reduces the vibration.

All very clever but, as with previous limited play systems, there is nothing to stop the owner using a PC and unauthorized (but widely available) copy software to make a permanent copy of the disc while it still plays.

Patents also tell an interesting back story on the problems faced by the companies now promising ‘managed copy’ music and movies – discs that permit controlled-use copying of HD content for home servers, back-up and portable play. The current absurd situation is that home servers are sold without the ability to rip optical discs to hard disc or solid state memory, but dealers are trained to install ripping software and teach customers how to activate it!

Panasonic, Samsung, Sandisk, Sony and Toshiba have now got together to offer the ‘Next Generation Secure Memory Initiative’. Panasonic’s European and US filings EP 2299446 and US 2011/0052153 tell how HD content copying involves a lot more than ripping. The managed process requires reading, recompressing and encrypting of the digital stream, as well as writing the copy. This, admits Panasonic, can be very slow and makes the owner “bored”, which explains why there has so far been “little possibility of the managed copy being adopted in home appliances.”

One answer is to let the owner watch an advert or play a screen game while the job is progressing. But a new kind of player is needed, with intelligence to cope with all the different digital rights management systems favoured by different content providers and movie studios. If the processing power of the player is overloaded, the copy may fail, leaving the user effectively charged for the failed attempt.

Panasonic’s solution is for the player to go dumbly on line to the content provider and access a central copy control server. The player then reads a PMSN (Pre-recorded Media Serial Number) which is stored in the BCA (Burst Cutting Area) near the lead-in area of a BD, and which only a licensed BD player can read. If this serial number confirms that the disc is a genuine original, the server authorizes the making of a copy. The player also checks the blank disc or memory device to ensure it is approved as secure and cannot itself be copied. Only then is the copy made, and logged by the content provider’s server.

While all this is going on the player ‘virtually ejects’ the BD; the disc is physically still in the player but only available for checking and copying. Otherwise the player behaves as if the disc were no longer loaded and blocks any attempt at playback while the copy is being made. But it can still dumbly display promotional material or a simple game. The clear message is that commercial success of NGSMI Managed Copy systems will depend on how simple they can be made to use.

After a decade of growth driven by the transition from analogue CRT to digital flat panel TV, the consumer electronics industry is now moving into a new era of competition where multi-screen capability, internet connectivity, applications, and 3D are powering the next phase of growth.Additional complementary innovations are also percolating through, which include wand remote controls, voice and gesture recognition, lower energy consumption, OLED and ultra-high definition offerings.

Samsung is looking to replicate the huge success it has had in smartphones with applications and content for Smart TV, as well as rolling out tablets and driving up its share in conventional PCs; Sony has been driving Bravia Internet and plans to create a “new type of television” driven by content partnerships and synergy with PS3; while other major TV brands have been actively developing their Smart TV propositions, but in some cases may have less potential multi-platform leverage.

In tandem with all the activity from the CE manufacturers, the content industry is focusing on multi-platform strategies, and is learning how to manage digital distribution. Not least in respect to Smart TV, which potentially could challenge the conventional order that has governed broadcast and cable programming distribution for the last 60 years.

This convergent multi-platform marketplace presents both opportunities and challenges to the companies that lead the TV market, but is also attracting powerful new players from the digital world like Google and Apple, not least as Smart TV opens the door to interactive applications across social media, gaming, advertising and e-Commerce.

Futuresource research shows that, once final figures are in, the global flat panel TV market is likely to have reached 224 million units last year, an increase of 6% from 2010. Strong growth has been experienced by emerging regions including China, India and Brazil, but this is being offset by declines in Western Europe, Japan and the USA, as these territories head towards saturation point. Of the 224 million units, 27% will be Smart TVs, rising to more than 80% of the total units shipped in 2015.

On a regional level, Japan leads the way in the adoption of connected TVs, with 59% of shipments in 2011 providing IP connectivity as standard. Penetration in the USA and China was around 29%, with Europe behind the curve at 24%.

Market development will be primarily driven by LED TV shipments, accounting for 90% of units to be shipped globally by 2015. Other technologies including LCD, PDP and CRT are expected to decline throughout the forecast period, while OLED – currently used in smartphone technology – will gain traction in TV development by 2015. Market leaders Samsung and LG are already showcasing this technology.

As demand for connected TVs gains momentum, major TV manufacturers are responding by making IP connectivity a standard feature in 60% to 80% of their product portfolio. In addition, embedded Wi-Fi is expected to drive usage and many premium models now incorporate this feature, enabling consumers to connect and use with ease (often, a wired internet connection is not only on a different wall to the main television, but on many occasions within a different room).

Looking to 3D technologies, increased product availability and falling price premiums have contributed to the growth in global shipments, which are expected to exceed 16 million units for 2011 once final numbers are in. Over the next three to five years, there will be significant movements in the growth of 3D-capable households as 3D becomes a standard feature in the majority of mid to high range TVs, in the same way as high definition is today in large screen sized sets, with anticipated growth throughout the forecast period, accounting for 50% of shipments in 2015.

One of the key reasons behind the growth of 3DTV is that consumers are purchasing the 3D function by default when looking to upgrade to higher-end models, mainly as they are unaware of the in-built 3D capability at the time of purchase. Additionally, over the last 12 months the industry has seen hardware prices decline sharply, with 3D BD players dropping by half and a wider range of 3D TVs available under $500, thus broadening market appeal.

With significant worldwide developments in the installation of HD set-top boxes enabling a quick roll-out of 3D channels, viewing quality and content has dramatically improved. The last 12 months have seen a rise in available 3D channels around the world from 50 to 90, with a further 15 to 20 expected to emerge in 2012. Interest in the London Olympic Games in 2012 is fuelling this, with a significant number of broadcasters looking to secure, or having already secured, 3D broadcasting rights. Broadcasters are typically maximising the potential of 3D by defining it as a unique selling point for high-end subscriptions to gain competitive advantage and reduce consumer churn.

And while the trend in TV is towards ever- larger screens and the home theatre experience, the world of computing is trending to smaller personal infotainment devices, through the continued rise of tablets and smartphones. However, convergence is actually being driven by connectivity, interactive applications, digital content and the common use of enabling technologies, not predominantly through physical form factor. Networked TV sets can display output from personal digital devices, but a high volume consumer market is likely to continue to thrive for dedicated computer monitors for a number of years to come.

www.futuresource-consulting.com

On the web you are quoted as saying, “The days of passive listening are over. Music is and should be interactive”. Can you elaborate on that?
Yes, that came from my mouth, and I absolutely believe it. That was a direct result of working on the Guitar Hero franchise. I oversaw all the technical integration of licensed music for Guitar Hero. We were the first mass media licensing opportunity that used audio way beyond a stereo mix. The user plays along to the instrumental part of the track, giving the feeling that he or she is really creating this audio part and inside the mix. The majority of sales were to the non-musician. Everybody wants to play air guitar or imaginary drum sticks. We opened up gaming to the casual market in ways that were never achieved before.

Weren’t the major labels hesitant to allow their music be used in games?
Sure, when we started we had to re-record the songs. But as we paid royalties on the publishing and they saw the success of the game, they started licensing recordings to us. We were constantly educating artists on how we would use their material. We opened up a genre of content (classic rock) to new generations and completely revitalized that genre.

What would be other examples of music’s new-found interactivity?
There are new technologies – new means – of expanding the experience of music beyond listening on headphones or a CD player or turntable. Some software and apps are not even game specific. They’re interactive tools that can be used for education, music history, or music appreciation, and create immersive environments.

Do your colleagues at EMI responsible for selling CDs and digital downloads feel the same way about the shift of how people now relate to music?
EMI, in general, has a very open proactive attitude towards embracing new technologies. Guitar Hero was such a big success for EMI. We all benefited and made money. We opened up music in ways that hadn’t been done before from both licensing and production perspectives. Everybody at EMI across the board appreciates that new attitude.

Your new job goes way beyond game development. What attracted you about the archival responsibilities at the label?
Typically, the archive had been this back-end destination where for the remainder of its shelf life it collected dust and died. Guitar Hero demonstrated how the catalogue in storage can be exploited at will. We were the first game that woke up labels to give access to that archive. Going forward it helped determine the new deliverable requirements. Now we can get access to the multi-tracks and each step of the [recording] process in an artist’s career – from signing that first contract, doing the first demos, videos, photo shoots, the mastering session. Each of those assets has the potential for exploitation. If we can proactively bundle those assets in a way that can be leveraged successfully the better chance the artist has to succeeding. My skill set has been leveraging digital assets post-transfer.

How important are the assets sitting in the vault to the labels’ bottom lines?
They’re our lifeblood. Unfortunately, there have been years of bad practices, seeking quick and easy financial turnaround. The appreciation of fidelity is paramount to moving forward. People can now identify when something sounds bad. In the case of back catalogue, we’re going back to old analogue recordings and transferring them to the highest resolution standards. So we’re creating a digital repository, and anticipating any future content requirements.

Why did you leave Activision for EMI, which – as well as the major labels in general – had been going through so much uncertainty in recent years?
To be honest, I never thought I would jump to the label side. As a client, I established a great rapport with the people at EMI, which is really taking a forward stance in recognizing that times have been tough for the labels, who have struggled. But if we embrace a proactive attitude in facilitating new business models, we can all succeed. When I joined EMI in late September, I knew a potential sale was right around the corner. I wanted to jump on the ship.

Was there a sense of relief in your office when the deals for EMI’s assets to Universal and Sony were announced?

We feel great about the deal. But we legally can’t get together with Universal until the regulatory hurdles are leaped, which could be several months away. So in the meantime, we’re proceeding with business as usual. We’re not sitting back waiting for us to get picked up by our new parent. Our ideal scenario is to get EMI as such a well-oiled machine that the attitude on Universal’s part will be: “If it ain’t broke, don’t fix it.”

How did you become chair of NARM/digitalmusic.org’s Apps, Music & Gaming Work Group?
I talked to digitalmusic.org director Bill Wilson prior to joining EMI. After I started my new job, we had one phone conference between label representatives and game developers, and I was the only one who had experience on both sides, so it made sense for me to chair it and facilitate the conversations that come out of it. The work group’s aim is to engage gaming companies and app developers to create better systems for including music in their products and to facilitate relationships for advance content licensing. We’ll meet every six weeks or so.

Any truth to those rumours that the labels are killing the CD in 2012?
I’ve heard that rumour, but don’t know anything specifically if it’s true. The [cloud] infrastructure for digital transfers is huge now. The need for individual record – or even file – libraries is over. People don’t feel the need to own or possess content; they want to stream it and simply want access to it. The audiophile listening community is not CD-focused at all. There’s something to be said for an immersive experience, such as the days of opening an LP, and you just stared at the album artwork, liner notes and read every detail. We totally lost that in the transition to digital. I think the only return to ownership mentality of content would have to include that immersive experience where the user could get lost in this fantasy world. CDs have had an inevitable decline of sales. I don’t think it’ll drop to zero but it will balance out because there will be a core group of people who will always buy CDs.

David Iscove is the Director of EMI North America’s Works Hub Initiative, the company’s archival digitization strategy for both catalogue and frontline assets. He previously worked at Activision Publishing as senior audio assets specialist for the Guitar Hero, DJ Hero, and Band Hero video game franchises. Iscove chairs digitalmusic.org’s Apps, Music & Gaming Work Group. Digitalmusic.org is the home for the digital initiatives of NARM (National Association of Recording Merchandisers).

www.capitolrecords.com
digitalmusic.org/work-groups/music-gaming

North America’s largest trade show spans the living room, desktop, and mobile, covers televisions and tablets, connected homes and smart phones, computers and content, telecom and wireless, autos and appliances, digital photography and digital health.

Yes, some big names like Apple and Google do not exhibit at CES, and Microsoft is bowing out after this year from exhibiting and from its traditional keynote event, but the show does keep expanding its scope. For example, around half the space in the North Hall of the Las Vegas Convention Center was dedicated to the iLounge Pavilion for iPhone, iPad and related accessories, next to growing areas for digital health and automotive electronics.

But the big themes of this year's CES can be summed up in two words – ‘thin’ and ‘smart’. The emphasis on thin comes from devices that are now measured in millimetres instead of inches, from the new Ultrabook laptops that are too thin for standard connectors, to television displays that look like a pane of glass. And the profusion of smart, connected devices extend from widescreen TVs with downloadable apps to connected appliances that can text you when the wash cycle is done.

THINNER AND SMARTER

The big news at CES for PCs was in Ultrabooks – amazingly thin laptops that still deliver good performance (think of the Apple MacBook Air). This was the fatal flaw in the big push for netbooks a couple years ago. Netbooks were the right idea – smaller, lighter laptops that are easier to carry – but the user experience failed because the size and cost reductions resulted in frustratingly underpowered systems. This time, Intel is driving the Ultrabook category based on both size and performance, built around several generations of the Intel Core processors.

The first Ultrabooks, like the new HP Envy Spectre with its glass-based chassis, are now coming to market based on the Intel ‘Sandy Bridge’ Core i5 and i7 low voltage processors. These feature thin and light designs (under 21mm and around 1.5kgs), with fast start-up, extended battery life (targeting 5 to 8 hours), and with mainstream pricing (targeted under $1,000). The second wave, due this spring, is based on the third generation Intel Core processors (‘Ivy Bridge’), for greater performance and faster graphics (20% better), with expanded support for USB 3.0, and greater availability of larger screen sizes (from 13" to 14 and 15"). Then the 2013 models will be based on Intel’s next-generation ‘Haswell’ processors, with significantly lower power consumption resulting in longer standby battery life (more than 10 days in some cases).

Ultrabooks also will be a strong platform for Microsoft Windows 8 when it is released later this year, particularly with support for touchscreen designs (consumer research shows that the keyboard is for work, and the touchscreen is for fun). Ultrabooks also can include a motion sensor so users can tilt and manoeuvre the unit to control action on the screen. Expect to hear much more about the Ultrabook format this year.

While there were lots of different product categories at CES, the flagship still is the big- screen displays in the Central Hall of the Las Vegas Convention Center. Thin was also the buzz word for TVs, along with ‘smart’.

This year's hit were the beautiful 55-inch OLED displays from LG and Samsung. OLED offers much faster displays (eliminating motion artifacts), vibrant colour and contrast, and good viewing angles in an amazingly thin panel. The displays at CES were ludicrously thin – like a sheet of glass – and with a similarly thin bezel around the display they can look like windows floating in the air. Even better, these displays may even begin to appear as real products this year, albeit with the pricing still to be announced.

After the big pushes for Blu-ray and then 3D displays in recent years, the CE industry seems to have settled into a more pragmatic long-term approach to deploying new features for consumers. This year, 3D and ‘smart’ technologies have extended beyond just the high-end TV lines, so that the next big display that you buy will probably be at least 3D ready – for when you find a compelling reason to try out 3D content. Work also continues on glasses-free displays for both the living room and for PCs, with fixed viewing positions and/or using a camera to track the position of a single viewer.

Of course, there's always new technologies, so this CES saw some support for even-higher- res 4K x 2K displays, with Panasonic demonstrating an incredibly detailed picture on a small 20-inch 4K prototype display, and Sony introducing a Blu-ray player that upscales to 4K, which provides at least one source of content to display.

But the real focus was not on the displays; it was on the ‘smart’ capabilities embedded in TVs and set-top boxes.

Smart means in-home and internet connectivity, with internet browsing, media sharing throughout the home and with portable devices (ie, with DLNA), direct sharing between devices via Wi-Fi (without requiring an access point), universal control of screens and sources. Smart also means on-screen interfaces for accessing stores for content, plus stores for apps developed for the TV display. One such option is Google TV, now built in to some LG displays and available in a Sony set-top box. You also can add smart connected features to an existing display with a new Blu-ray player.

Smart also applies to interacting with your devices. For example, the Panasonic touch pad remote provides more convenient navigation across menus and lists of content, and the LG Magic Motion Remote Control lets you wave to control the cursor. But this year's interfaces are moving beyond pointing to gesture control, plus adding microphones for voice input commands and even cameras for face recognition to customize the interface for specific users. As your family watches in the living room, your TV will know who you are, what you are saying, and what you are watching, as it communicates with cloud services to enhance and augment your viewing experience.

ACCESS ALL DEVICES

This explosion of consumer options for different kinds of devices to access content, and sources to acquire media raises the bar for manufacturers and service providers who need to provide consumer-friendly interfaces for discovering, purchasing, and delivering content. One solution comes from companies that provide customizable storefronts and interfaces for associated back-end services.

For example, Rovi is the former Macrovision, refocused in 2009 on the discovery and enjoyment of digital entertainment, and combined with Sonic Solutions, including media tools, the RoxioNow storefront, and DivX video technology.

At CES, Rovi demonstrated its second- generation TotalGuide G2 content guide that provides unified entertainment discovery and access for CE device manufacturers, with rich program data, personalized search and recommendations, title access and control across multiple vendors, and interactive advertising. It provides a common interface for browsing and searching for interesting content, and then links to available on-line stores to purchase the material.

Behind the interface are the Rovi components for integration into devices or as cloud services. The Rovi Entertainment Store is a turnkey white-label solution for vendors to create over-the-top (OTT) storefronts, and is currently supporting almost a dozen third-party services. It integrates with UltraViolet digital library and Rovi Digital Copy to recognize and authenticate a movie on a physical disc.

The Rovi Data information service provides media data on more than 3.8 million TV programs since 1954, over 500,000 movie and video titles, and over 28 million music tracks – and now includes Twitter feeds from actors and artists. The Rovi Cloud Services interface provides access to metadata, recommendations, and search. And the Rovi Advertising Service places content-appropriate ads, and currently reaches more than 50 million households globally.

For content delivery, Rovi also demonstrated DivX Plus streaming to provide a Blu-ray Disc-like streaming experience, including dynamically adjusting visual quality based on available bandwidth, plus features including 1080p full HD, multi-language subtitles and audio tracks, and trick-play functions including smooth fast forward and rewind.

Also at CES, Irdeto showed its newly-launched TV Services platform and suite of reference applications created by Accedo for multi-screen user experiences across tablets, smartphones, connected TVs, and other iOS and Android The Irdeto TV Services platform provides modular cloud TV services for operators and content providers, including dynamic security and monetization tools. Accedo provides tools and services for interactive Smart TV and IPTV applications to media companies, consumer electronics manufacturers, and TV operators globally.

Meanwhile, Technicolor has been packaging its deep expertise in multimedia technology as a variety of products, extending into consumer applications.

Technicolor demonstrated its M- GO free consumer application for connected devices to provide convenient access to cloud- based entertainment content. M-GO provides media navigation and discovery, including movies, music, apps, and live TV. It can deliver content directly, or provide a second-screen experience on tablets and smartphones.

In partnership with Intel, M-GO will be available on Intel Ultrabooks through the Intel AppUp centre. With Samsung, it will be loaded on Smart TVs and Blu-Ray Disc players, and accessible on Galaxy tablets. And with VIZIO, M-GO will be pre-loaded on televisions, tablets, Blu- Ray players and stream players with VIZIO Internet Apps Plus.

Technicolor also demonstrated MediaEcho to synchronize a tablet as a second screen with live playing content, including associated information, interactions on social networks, and e-commerce for products related to a favourite program. MediaEcho can synchronize tightly with a compatible connected Blu-ray player over the home Wi-Fi network, even providing multiple angle video from a cloud server.

The biggest change in the infrastructure for managing and delivering consumer content is UltraViolet. The DECE held a press conference at CES to provide an update on UltraViolet, which began rolling out last year in the US and UK, and is now expanding to Canada. This year will see significant expansion of releases on DVD and Blu-ray, along with the introduction of Blu-ray players that support the format.

Time Warner moved to help boost UltraViolet by acquiring Flixster in May 2011, with its movie discovery and community destination websites at Flixster.com and RottenTomatoes.com, and apps on Facebook and MySpace, and on smartphones. On the set-top, new Panasonic and Samsung UltraViolet Blu-ray players will include Flixster to access and play UltraViolet content. Amazon also announced that it will sell UltraViolet downloads, from a yet-undisclosed studio, since the UltraViolet model matches well with Amazon's current business of selling content that is accessible across a wide range of platforms.

But the most interesting breakthrough in business models was the ‘Disc to Digital’ feature developed by Rovi and Flixster, and to be available on Samsung UltraViolet Blu-ray players. This will allow consumers to add Blu-ray and DVD discs from their existing home collections to their UltraViolet libraries. While sample pricing has not been announced, Rovi suggests converting a disc to electronic format could be around 99 cents. Yes, this could allow consumers to trade discs to bulk up their collections, but the result is still new revenue for the studios. This process also could be enabled for rental discs (which can be identified as a different SKU) and even for ripped discs (identified by scanning), although likely at higher prices.

SECOND SCREENING

The excitement with televisions and portable devices merge nicely with ‘second screen’ applications, which leverage a tablet or smartphone as a companion to what's showing on TV – including additional information on movies and actors, statistics on sports teams and players, or product catalogues for home or garden or cooking shows. This kind of material also can be displayed directly on the TV, but is often better on the second screen so the group can enjoy the full widescreen experience while an individual accesses the associated information.

But how does the tablet or the TV display know what is being displayed, especially if it is live TV, or time-shifted content from an attached device? The answer comes from automated content recognition (ACR), based on monitoring the audio channel to identify the content by its ‘digital fingerprint’. Even better, content recognition can identify the position in the program in order to provide content that is tightly synchronized to the program. Audible Magic provides services including broadcast monitoring for advertisers, checking media for copyrighted works for replicators, and checking for illegal downloads on college networks.

At CES, it demonstrated its Live TViD service which identifies live content as it airs, based on the company's real-time monitoring of over 150 networks. Similarly, Civolution has developed watermarking and fingerprinting technologies for applications including forensic watermarking for uniquely marking content, broadcast monitoring for tracking content usage over 1,500 television channels in more than 50 countries, content identification for websites and social media platforms, audience measurement, and second- screen synchronization based on both audio and video content identification.

At CES, Civolution demonstrated the ConnecTV app powered by its audio-based synchronization technology. ConnecTV provides a free, real-time second screen for TV viewers, and is available on tablets, laptops and home computers. It adds associated content and a social companion experience to all programs on more than 250 networks nationwide, and will soon roll out on regional sports networks and on over 200 local affiliate networks from its broadcast partners.

TRADITIONAL AND PHYSICAL

The CES week kicked off with the companion Storage Visions Conference, with some 800 attendees and 25 exhibitors (both up around 20%), and some 40 speakers presenting at 15 sessions over the two days.

This year's theme was ‘Heavy Storage for Thin Clients’, addressing the soaring demand for storage as content grows exponentially, from consumer enjoyment of streaming video (now over 60% of internet bandwidth) to higher res professional video (from 4K x 2K to 8K x 4K).

One answer discussed at the event was cloud storage, not only for consumers, but also private cloud services for larger-scale enterprise needs. But the most discussion at Storage Visions was around flash memory and SSD, as prices continue to fall and manufacturing capacity ramps up. Intel and others make the argument that while hard disk drives are less expensive per byte, SSD already wins on total cost of ownership, plus has strong advantages in speed, weight, lower power, ruggedness, and battery life.

Presenters also saw strong trends toward the use of hybrid storage systems using solid state storage and hard drives, especially in Ultrabook computers, as well as for tiered cloud storage including flash memory, HDD, and tape.

Several presenters, including Imation, also discussed the need for built-in security, stating that abstinence does not work (telling people not to use removable drives). Instead, self-encrypting SSD designs like the Storage Vision award winning Micron RealSSD self-encrypting drive (SED) ensure that the data is always encrypted, and the drive can be wiped by simply erasing the on-board key.

Imation extended this message in its booth on the show floor, showing Secure brand solutions for consumers and the enterprise, covering flash, hard drives, and Blu- ray optical discs (with built-in encryption and burning software). The enterprise line included solutions for Secure Data across the business (encryption, authentication, and device management), Secure ID with USB drives, and Secure Space (booting from USB with the operating system, applications, and data all on the drive).

Millenniata won the Consumer Storage Device award for its new M-DISC ‘permanent’ DVD format, which was also demonstrated at the LG Electronics booth. The M-DISC is a new disc format that is compatible with existing DVD players that support the DVD+R/RW format, but does require changes in media manufacturing and burners.

Millenniata has partnered with Hitachi-LG Data Storage to manufacture and market M- READY DVD drives under the LG brand. The current media is single layer DVD (4.7 GB). Millenniata has demonstrated dual-layer DVD media, but is pressing ahead to develop Blu- ray media, expected out of the lab this year. A further indication that there is life yet in physical media came with other companies in the packaged media supply chain who chose to exhibit at CES.

Vinpower Digital demonstrated its duplication equipment for CD, DVD and Blu-ray as well as flash memory (including USB drives and SD memory). These range from portable units with a handful of simultaneous targets to tower systems, and manual loading systems to robotic autoloaders with 1,000 disc capacities. The publishing systems also include label printing, some featuring solvent inks that can print across many different surfaces without requiring any special coating or treatment, and are also extremely water and scratch proof.

Moser Baer was at CES for its third year, exhibiting optical and flash media products. The company reports that the timing of the show is convenient at the beginning of the year, and that it has success both meeting with customers and finding new prospects at the booth.

www.cesweb.org

Based on a digital locker description provided by the survey, respondents ranked eight potential benefits by importance, with a free service being the top benefit. Viewing content wherever consumers wanted, and on whatever device they wanted ranked second, followed by the ability to view content by downloading, streaming, or on physical media.

Other benefits in order of importance included unlimited content in a digital library, all content stored and available in one place, protection of content from damage, digital library free with the purchase of a disc, and in last place, being able to share content with up to 6 UV-registered household members.

Key findings of the report included the fact that most consumers surveyed felt confident about their awareness and understanding of the concepts of digital storage (66%) and cloud storage (61%). However, the report stated, there is a discrepancy between the consumer perceived versus actual knowledge.

While nearly 90% of respondents very somewhat to very interested in the concept of storing and accessing content from a digital library, only a small percentage (18%) of respondents currently use a digital locker for video storage. That percentage is skewed slightly to the 35-49 age group. Movies and TV shows were ranked as the two most likely forms of content to be stored in a hypothetical digital locker.

While awareness of cloud-based services has increased, consumers still lack a strong understanding of the benefits of video content digital lockers or the rights that come with ownership. Consumers also need educating on the issues of rights ownership and management.

The report includes both quantitative findings from an online survey conducted among a geographically dispersed sample of 502 men and women aged 18-59 in October 2011, as well as qualitative discoveries gleaned from focus groups conducted in November 2011 in Los Angeles among mixed groups of men and women aged 21-49.

www.pwc.com

With this acquisition, Corel said, it will take advantage of its well-established global infrastructure to dramatically broaden distribution of Roxio products into new international markets. In addition, the company will draw upon the complementary video, photo, audio, and disc burning technologies found in both Roxio and Corel software to give users even more capabilities and further enhance Corel’s overall product portfolio. Corel also sees significant opportunities in combining the strengths of Corel’s and Roxio’s established retail and direct sales channels and large customer bases.

The company also announced the launch of its first Roxio product, Easy VHS to DVD 3 Plus, which allows users to preserve and share VHS, Hi8 and V8 in today’s formats – disc, digital, or on mobile devices. “Over the years, when we picked up our video cameras and recorded the exciting events in our lives, we wanted to have them forever,” said Sean Penn, Vice President of Product Management for Roxio Products at Corel. “Now, so many of these irreplaceable memories like weddings, graduations, children’s birthdays and other special family celebrations are locked away on old tapes that are degrading over time while the devices to play them are disappearing. With this simple-to-use product, anyone can convert their aging video tape to digital and save and share the movies that tell their family’s unique story.”

www.corel.com
www.roxio.com

According to Futuresource’s David Sidebottom, chair of the one day Mobile Summit which prefaced the main two-day conference, the presentations and discussions over the course of the day had: “Confirmed the scale of opportunities for mobiles and highlighted the diversity of its customer base. In a couple of years will we be at this conference talking about digital content profitability rather than monetization?”

Key to this profitability is knowing your audience, as Yahoo! Director Mobile EMEA Ed Laws explained that the way people consume content has changed dramatically. “People are spending more time on mobile devices and less time on traditional methods of content consumption compared to a year ago,” he said. In particular, people now prefer to consume news on small devices, which provide more flexibility – mobile devices are now the reading platform of choice for the bathroom and “longer visits” he pointed out. Most people are now disappointed if a news website is not optimized for mobile, so content providers need to be sure to give them what they want.

This notion was echoed by Polar Mobile CEO Kunal Gupta who pointed out: “The time spent on tablets is far greater but the number of times smartphones are used is greater,” he said. That makes the tablet more of a lean-back experience and, as such, it is much more of a paid content model. “People are more aggressive with monetization on tablets than PC or smartphones.” In the future, he said, we will see optimized content streams for tablet, so “there should be more long form content.”

Another point raised by many of the speakers was that the one to many TV broadcast model will evolve to a one to one as content owners learn ways to stay with the consumer and keep providing the content they want on the different devices they use throughout the day. The ‘keeping the customer satisfied’ theme carried on throughout the conference. Bismarck Lepe of Ooyala shared some statistics on video from the company’s video index. Among the facts and figures he shared was the fact that non-PC video consumption is growing rapidly and will continue, and that the growth rate of connected TV is faster than tablets and mobiles. “Every single experience is different for every single user in the connected world consumption so the right strategy for the right device for each user is very important,” he stressed.

DRAGONS AND STARTUPS

DCM events always have something that little bit different from other conferences, and this year’s DCM Europe in London was no exception. While, strictly speaking, the Startup Showcase wasn’t completely new (having appeared at DCM East last year) it had its own European take on it, and the Dragons’ Den session was certainly different.

The Dragons included the delegates and moderator David Naylor of Field Fisher Waterhouse. Three ‘entrepreneurs’ argued the case for why they should be given an investment of €250,000. Pitches included Clive Dickens, COO of Absolute Radio who proposed RADIOsync: “A new product proposition to make the discovery of online radio easier through metadata”; Paul Westhorpe, formerly of PRISA, who also went down a content discovery route with his pitch of ‘The Good Life’ – an online service to help people find “cool, new, local and global authentic experiences”; and Matteo Berlucchi, CEO of book reader service Anobii, who discussed what he called the development of ‘moral DRM’.

Dickens quoted some figures: 91% of people in the UK listen to 21 hours of radio per week (”radio is very much in rude health”). However, though 80% of the people in the UK own internet enabled devices, and there are around 40k radio stations online, only 10% of people have listened to the radio online. This, he said, was largely down to discovery, or lack of: data, he declared, is the new oil of our economy.

Westhorpe discussed the necessity for content discovery, using what he called a “content federation system”, which would help to compile experiences based on user preferences. He cited the example of visiting Madrid, where the user could view maps based around a certain experience, such as a tapas crawl, with recipes for patatas bravas, or a cultural experience, where they could also watch a video on how to flamenco dance.

Berlucchi declared that DRM was not necessarily a cure for piracy, and that education is key to preventing piracy of content, including books. The relatively new ebook market should learn from the music industry and drop DRM as we know it (digital rights management) for Digital Rights Morality. Publishers could provide DRM-free books that were watermarked with the buyer’s personal information (name and address for instance) on each page. That would install an ‘honour’ system of not misusing the publication. “Interoperability of books would open the market,” he stressed. “Other publishers could sell into Kindle and vice versa.”

Second place was a virtual tie between Dickens and Westhorpe, but Matteo Berlucchi emerged as the the clear winner.

In the Startup Showcase, four outstanding new ventures presented to and were voted on by a panel of judges and the delegates. The presentations were all extremely well received and voting by the audience resulted in a tie for first place, which then went to a best of three judges’ votes.

First up was Lee Morgenroth of leemail.me – ‘a PO Box for your email’. The service provides a unique and secure email address for all those websites we want to use, and which want an email address. There is a facility to turn the email on and off, and should, said Morgenroth, make it easier for people to give companies an email address. “Look at PayPal,” he said. “They are a trusted mediator for payments. We do the same thing for contact details.”

Fans for brands was the mantra of the next startup, Gruvi.tv, represented by James Hobbis. “Spotify attracted one million followers in the US with the Facebook Ticker,” he pointed out. “We can do that for any brand.” The company works with movie companies primarily, helping fans to discover, explore and share content. “The trouble with social media is that people don’t want their personal conversations interrupted. We join that conversation; we don’t interrupt it.” The advantage for movie studios was huge, he said, allowing them to market early to the right people with the appropriate use of shared trailers and recommendations.

Music with a view was the next pitch, as Stephen O’Regan of BalconyTV explained the concept that started on a balcony in Dublin. “It’s the rock ‘n’ roll part of digital content monetization,” he said. “Three friends started with the crazy idea of doing a TV show from our balcony. We wanted a new show every day and invited bands to perform so we could put the show on MySpace. Soon we were inundated by requests.” One of the unknown bands who performed for the first time on that Dubin balcony was The Script, who were to be seen two years later on the David Letterman show.

Last up to the podium was Jessica Butcher of Blippar. Blipping, she said, is “Converting an old push into a realtime proactively pulled experience.” With the use of image recognition, an app can turn even the most everyday object into interactive fun. “It is content delivery to the user’s hand, interactively and proactively requested.” The cumulative and rapidly growing audience has resulted in two million user Blipps, 50 client campaigns, and 350,000 users already.

There was a dead heat between BalconyTV and Blippar, with Blippar winning in the best of three votes by the judges.

DISRUPT OR SUSTAIN

A keynote panel at the event discussed the topic of ‘Disrupt or sustain? Developing a sustainable business model in an innovation-led sector’. Moderator David Naylor set expectations high by saying: “We live in wildly interesting times. Eastman Kodak, which could be viewed as the inventor of digital photography, is preparing to file for bankruptcy.” That, he said, is “A sign that even big companies are struggling with this rapidly changing landscape.”

Disruption and flexibility are key to staying in business in today’s changing digital landscape, and creativity shouldn’t be stifled, was the consensus. According to panellist MB Christie, Online Project Management Director, ft.com: “We have to keep disrupting our own selves in order to sustain growth.”

John Clark, Managing Director, UK for SEGA, combined the view of traditional packaged goods, with digital distribution, and his belief was that the paradigm shift has been from linear consumption to multiple devices. “Games companies for the first time are trying to catch up with the consumer,” he said. SEGA has acquired UK studios and the innovators in the company need to be supported to keep up with technology and continue creativity.

Peter Briffett, of LivingSocial, was very much of the view that creative elements need the corporate and financial backing of large companies but should very much be “separate from the mother ship”. He spoke from the point of view of someone in the enviable position of having sold a company to Microsoft but still being allowed to keep some autonomy.” Particularly good, he pointed out, as “Microsoft has a great history of killing anything they acquire but they are getting better at that.” Harking back to Naylor’s opening comment, he added: “Kodak never understood the digital space and didn’t innovate there.”

The conversation also turned to failure and how to cope with that. According to Christie, a standard question for her with interviews was “What was your biggest mistake and how did you recover from it?” Her company, she added, believed in ‘test, test, test’ but still sometimes that wasn’t a guarantee of success.

“Sometimes we release a great product but the public didn’t want it. If it works it’s not a failure in itself,” she stressed, giving the example of book publishing where some authors spend years getting a book published. “Then a later book becomes a bestseller so their first book that wasn’t well received succeeds. Persistence and optimism are crucial.”

A SCREEN IS JUST A SCREEN

Keeping the customer satisfied was revisited in many of the panels. For instance, during the discussion on ‘The growth of VOD: getting your product to the customer where and when they want it’, Charles Muirhead of Rightster stated firmly: “A screen is just a screen. It’s up to the technology providers to make it work.” Two uncontested points made during the discussion were that ‘content discovery is the next big thing and a huge opportunity for everyone’, and ‘multi-screen access is growing – consumers demand content when and where they want it’.

Social TV is going to be the ‘way to go’ was the opinion of George Meek of Kaltura during that panel, and another discussion of the conference revolved around the issue of ‘Delivering results through social media: likes, engagement, and monetization across all customer groups’. Todd Kurie of MyCube set the scene with a presentation on ‘Monetizing social media through social exchange’. The web today, he pointed out, has 250 million distinct websites, 150 million blogs, and 600 Facebook profiles. Every day there are 300 million tweets, 250 million photos are uploaded to Facebook, and every day eight years’ worth of content is uploaded to YouTube. “You are competing against a lot of content!”

Kurie’s message: “You need to make your content discoverable – metadata offers the best ROI.” Content doesn’t necessarily have to be free, he stressed – if people can find your content they are willing to pay for it. The comedian Louis CK offered the video of his Live at the Beacon Theater gig from his website for a fee of $5. No DRM, no restrictions – pay $5 and do what you like with it. “Over one million people bought it.”

Social media can be a hugely successful marketing tool, said Denise Parkinson of Yahoo! “When you have someone like Vin Diesel with five million fans on Facebook, he can drive traffic to like trailers of movies and then we can show our major studio clients that there is a huge interest in a title before it is released.”

Localization is important, so social media needs to be monitored carefully and “Research, research, research,” was the message of moderator Dana Al Salem of FanShake. She cited an example of the Middle East and North Africa, where there are two mobile phones per person. “Even if someone can’t afford to call or text, they still have two phones.” So if you are looking at growing a market in that region, looking at mobile is the way to go, she said. That sentiment was echoed by Henning Linblad, VP of Marketing at the WTA (Women’s Tennis Association), who said that what fans in China want is very different from what US or UK fans want. Facebook needs to be treated almost as another country in itself.

Maria Ingold of FilmFlex doubled up as a speaker on both DAM (digital asset management) and DRM (digital rights management) sessions and: “People want the latest premium content – now!” she pointed out, which is what FilmFlex aims to provide. “Rights windows are collapsing down to day and date, and people want a number of things: ease of payment; to watch on TV; to watch on other devices at home. And to take it with them when they travel.” What’s worth selling is worth managing, she said in the context of DAM. And, regarding DRM, Ingold pointed out, “We’re involved in some of the most premium content available so studios want to protect it. Content has to be licensed per territory per partner per device. We have rights negotiations about all of them, so that’s a lot to think about.”

Moderator Simon Tanner quizzed the panellists, in a quick-fire round, on the best and worst aspect of DRM. Some of the answers were: best – being invisible; worst – being visible (Trevor Albery, Director of Ant-Piracy, Warner Bros). Worst – the inflexible way it has been implemented in the past (Paul Gathercole of Universal Music); and worst – the fact that it can be hacked so it needs to be dynamically updated and is not a one-time, one-off solution (Christopher Schouten of Irdeto).

GIVE THEM COFFINS

Games also dominated a large part of the conference, with Edward Humphrey of Zodiak providing an insight into ‘Building digital relationships which transcend the broadcast window’. This he did by talking delegates through the case study of a Facebook-based role-playing game based on the popular TV show Being Human. It is, he said, the ideal property for such a game, with lots of social media buzz and devoted fans, and gave as many chances for making revenue as you could think of – and some.

Among the tips he shared for success were: “It’s never finished – get it out there”, and: “Don’t be too highbrow to chase revenue.” The devoted fans, he said, were prepared to buy anything, “Even things like coffins that we never thought originally would be worth putting into the store. So if they want coffins, give them coffins.”

David Perry of Gaikai discussed the failings of the big games companies to keep up with digital distribution. “There is DRM. There is incompatibility.” He pointed out the negative effect that the HD DVD/Blu-ray format war had on the entertainment sector, “But the games industry accepts format wars.”

The games sector has been marked by stair steps of change, rather than gradual evolution, he said. “Digital distribution is inevitable,” he stressed, “and free to play is important to our future.” Social sharing has been virtually unreachable by the big game names, because they make access to games difficult and/or expensive. Cloud delivery of games is the way forward, Perry said, in the spirit of removing all hurdles between players and games and bringing the game to the gamer. “We don’t have to explain how it all works, it just needs to work.” A bonus: zero piracy problems on servers.

Nicholas Lovell of Gamesbrief provided some insights into social games and pricing: “Free has been hugely successful.” In the physical world, the traditional pricing was a fixed price that meant it was too expensive for some people and other people were paying less than they would have been willing to pay. He cited the example of a Nine Inch Nails album, which was made available for free download and then had levels of pricing going up to $300 for a 200,000 limited edition signed album. “They sold out in 30 hours.” Lovell’s point: “In the digital world wevcan be more granular. Allow users to choose how much they will spend on your product and your revenues will go up.”

www.dcm-eu.com

Last year proved to be a good year for Germany-based Singulus Technologies, the industry’s leading supplier of end-to-end systems for pre-recorded and recordable disc production. So good that the company wanted to share the enthusiasm and arranged a Blu-ray Day at its headquarters in Hanau.

“It could have been seen as something of a risk setting up such an event in the high season and a challenging optical disc market environment,” Sylvia Hitzel, VP Sales & Marketing, admitted. However, as it turned out, the list of attendees – customers, suppliers, and partners – doubled from the initial estimates of about 60 and there were over 120 people on the day.

SUCCESS AND STRATEGY

Before the event kicked off, Hitzel and company CEO Dr Stephan Rinck took time out to talk strategy and successes with D2D. “We always said we were going to sell between 40 and 50 Blu-ray machines in 2011,” said Rinck. “That’s what we targeted for and we reached that target. So that’s very positive for us and we are also very positive for 2012.”

Not only did the sales figures meet the higher end of expectations, added Hitzel, the selling season was relatively steady, without the usual peaks and troughs. “We have our high season, so by the end of September the shipments normally drop, but the demand continued with companies who were looking to buy for delivery the following year.”

While the focus, not unnaturally, was on Blu-ray, the other physical media formats still provide business for the company. “Our customer service business is a significant business for us,” Hitzel points out. “There are replicators who may never go into Blu-ray production, but they have CD and DVD equipment and they will be in business for as long as there is a disc market. So they need our customer service, spare parts, and technical advice.”

Just as Blu-ray is the majority of the optical media business, said Rinck, so optical media is the majority of the company’s business overall. “We are active in three different areas: optical media (which is still 65% of our turnover), solar and semi-conductor. The other two are growing; they are growing, they are part of our future and we are investing heavily to get those business areas stronger.”

That is the extent of the company’s diversification for now, however, said Rinck. “Part of our success has been focus: Singulus became the industry leader in the optical media sector after starting 15 years ago as number 40. That was down to being focused in one area.

“Now, however, it’s time to look at other areas but we will be careful not to lose our focus.” In fact, even the move into solar is not so much diversification as expansion of technology: interestingly, there is some overlap. “We also get some of our customers in the optical disc moving into the solar. There are definite synergies: for instance, they are both vacuum-coating coded technologies that need cleanroom atmospheres. So solar is definitely a part of our future, but optical is still the majority and we will keep it that way for years to come.”

FACTS AND FIGURES

Moving into the day’s agenda, the company’s executives provided a review of the market and outlook for 2012, and were joined by various industry experts. Rinck opened the proceedings with a formal welcome, promising a day of in-depth market information, a tour of the facility, and a sociable dinner in the evening.

Hitzel took over as the ‘master of ceremonies’ for the day. She returned to the themes she and Rinck had visited in the pre-event interview: “A company the size of Singulus needs outside business but we are still dedicated to the optical media industry,” she said, providing an overview of the company’s history from the 1995 management buy-out and establishment of Singulus Technologies in 1996.

Highlights included the introduction of DVD replication systems in 1997 and recordable disc equipment in 1998, followed in the 2001-2003 period by the acquisition of moulding and mastering technology to enable the company to support the entire disc manufacturing process. The company entered the Blu-ray sector early on, in 2005, and hasn’t looked back since, now represented relatively equally in the three main regions of the Americas, Europe and Australasia.

“There is a positive outlook for Blu-ray in the coming years,” she summed up. “As the last man standing Singulus is committed to the sales and service of lines around the globe. We will not disappear.”

Singulus customer Sven Deutschmann of arvato provided a companion piece to survival in a challenging marketplace: where Singulus had achieved success by followed its technology expertise, bringing customers with it into other areas such as solar, arvato was following its customers. “Blu-ray is growing, but not enough to make up for the declining CD and DVD figures; just as it makes sense for Singulus to move into the solar business, it makes sense for us to follow our customers who are moving into digital.”

Jim Bottoms of Futuresource Consulting provided a Blu-ray status report, which was a call to the industry not to give up on Blu-ray. He commented that “2011 was a milestone year to forget – all predictions were thrown out”, and agreed with Deutschmann that Blu-ray is a growing market, albeit not along the lines of DVD in its early days. One positive sign, however, is that more independent content owners are entering the sector.

Blu-ray will be an important driver for 3D and UltraViolet, he added, but in the case of UltraViolet, “The message is very confused as consumers are still coming to terms with digital copy. It will take a lot of work and a big industry initiative,” he stressed, concluding with a strong message: “It will impact industry for many years to come if we give up on Blu-ray. There will never be another packaged media format and disc revenues for studios are still significant.”

Doug Franzen of the Colonial Purchasing Group also provided a message of co-operation that was necessary for an industry to survive challenging times. He outlined how purchasing power gave members better margins on their products, and offering rebate benefits. The co-operative now numbers nearly 40 members across the sectors of duplication, replication, authoring, mastering and more, he pointed out. “We're all in the same business with the same issues and we’re all looking for solutions. Since 2005 we have distributed five million dollars in rebates back to members.”

Other guests presenters were Andrew Lockhart of BHF Bank, who provided an analyst’s view of the optical disc market; Thilo Heyder of GFK, who outlined the status and future of the disc market in Germany; Dr Leonhard Schwab of dr. schwab Inspection, who discussed efficient mass production of Blu-ray; and Charles Hausman from One-Blue with information about the body’s licensing program.

The tour around the factory gave attendees of the event a chance to see equipment for all sectors of the Singulus business, particularly the BLU-LINE for Blu-ray production, which included moulds and inspection equipment from event sponsors Axxicon and DaTARIUS.

FOOD, DRINK AND HISTORY

Another string to the Singulus bow is its long-standing involvement with the MEDIA-TECH Association and, following the presentations, lunch and factory tour, Singulus hosted a networking dinner in the evening to celebrate 10 years of the Association, a highlight of which was dinner speaker Roland Lacher, former CEO of Singulus and a driving force in the establishment of the Association.

Singulus has maintained an uninterrupted presence on the Association's board. “I am very involved personally,” said Hitzel, who is currently serving as treasurer of the MTA and sees a crucial need for such an industry body in the physical media sector. “We believe that the industry needs a marketplace and as a non-profit organization we are really geared at serving the industry.”

Lacher’s presentation was amusing, informative – and a salutary lesson on the need to maintain solidarity in the industry. The Association came out because of dissatisfaction with the perceived greed of trade event organizers who drove the costs of attending exhibitions so high that companies such as Singulus had no choice but to break away.

Lacher ran through a number of lessons learned along the way, many of which were just as applicable to the everyday running of any business. Lesson one, for instance: “Listen to your customer, or your customer will walk away.”

A history of the MEDIA-TECH Association will appear in a future issue of D2D

www.singulus.de

What made you decide to take on this packaging project?
Environmentally friendly CD packaging has existed for a few years already (notably Digipack), but it always priced itself out of the market: it just wasn’t economically viable for the majority of products. Intuitively, you would think that cardboard packaging should be cheaper than plastic to produce, but that simply wasn’t the case: the production and design weren’t set up for economical mass production.

That seemed crazy to us: there had to be an economic, green alternative to the ugly, old-fashioned plastic jewel box that has dominated CD sales for the last 30 years. Moreover, we kept hearing from our contacts at major record labels that artists were asking more and more frequently for a greener alternative to plastic packaging for their records, and they had nothing, realistically, to offer them.

So what did you do?
We worked with a whole team of people – printers, major labels, marketing consultants – to devise a solution: a carton based, autopack sleeve. For the customer, the product looks and feels like a Digipack, but for the producer, we have eliminated the problems and costs associated with using a plastic tray. And using autopack has allowed us to price cheaper than a conventional Jewel Box, including assembly of a booklet and the disc.

There are other card-based CD sleeves out there – what makes MINTpack special?
For consumers, MINTpack won’t look very different from other card CD sleeves – the crucial difference is on the production side. We’ve studied and refined the design and the production process to create a sleeve that is high quality with a luxurious feel like other carton sleeves, but far more efficient to produce and pack, which means huge savings for the labels and artists who choose to use it.

But is it really environmentally friendly?
Yes. MINTpack is produced from FSC card, and because it’s 40% lighter and less bulky, the environmental load of transporting the product is also reduced.

What’s the attraction for the labels?
Well, for a start, MINTpack works out cheaper than the Jewel Box once you factor in transport costs. But even more importantly, it helps with the key issue of limited retailer floor space for stock: MINTpack is much thinner than a Jewel Box so you can double the number of units per square metre, but it has a deluxe look and feel that makes it attractive to display, and to handle.

Who’s using it?
All four majors have approved MINTpack for use, and there are already MINTpack products on the shelf from big name artists such as Stevie Wonder and The Cure.

What does the future hold for MINTpack?
Environmental concerns are ever more important for labels and artists, and we believe that good looking products that respect the environment without damaging the bottom line are the future of ‘physical’ music. Our objective is to continue developing a portfolio of suppliers and products to meet that demand.

Emma Beddington is a Brussels-based freelance lifestyle journalist and blogger. She has written for Elle, Red, the Guardian, Metropolitan, the Observer, the Sunday Times and O Magazine.

www.emthelo.com
www.mintpack.co

“Together, we are erasing old technology boundaries, freeing people to spontaneously enjoy the entertainment they want, whenever they choose, using the devices and media they prefer, at home or away,” said Bob Mudge, president of Verizon consumer and mass business markets.

The companies plan to introduce the product portfolio in the second half of 2012, with additional brand and product information to be revealed in the coming months.

“Consumers rely on Redbox for the latest new release movies at a great value, and our joint venture with Verizon will enable us to bring them even more value by offering expanded content offerings and greater flexibility for how and when they enjoy entertainment,” said Paul Davis, chief executive officer of Redbox parent company Coinstar, Inc. “We look forward to rolling out the shared benefits this venture will bring to consumers, retailers, and shareholders.”

The new venture will be provided by a limited liability company with Verizon holding a 65% ownership share and Redbox holding a 35% ownership share at the outset.

www.verizon.com

Depending on the elements, Audionamix now has the ability to provide major motion picture studios with Dialogue Isolation for native and foreign feature films, and the company’s first challenge was to use this new service on Universal Studio’s cult classic The Blues Brothers. Audionamix sound engineers were able to separate the English dialogue from the music and effects tracks, allowing them to superimpose new French, Italian, German, and Spanish-language dialogue tracks.

The result, said Silva, is high-quality, high-fidelity audio tracks in multiple languages and in less time, enabling movie studios to easily distribute films internationally in true surround sound. “The applications of this service and the value they provide to studios and audiences are boundless."

www.audionamix.com

Hirai, who is also expected to be appointed to the Board at the June shareholders meeting, said, “As challenging as times are for Sony now, were it not for the strong leadership of Sir Howard Stringer these past seven years, we would have been in a much more difficult position. I am grateful to Sir Howard and to the Board for their confidence in me, and I look forward to working with everyone at Sony more closely than ever before to build a strong future for our customers, shareholders, partners and employees.

“The path we must take is clear: to drive the growth of our core electronics businesses - primarily digital imaging, smart mobile and game; to turn around the television business; and to accelerate the innovation that enables us to create new business domains. The foundations are now firmly in place for the new management team and me to fully leverage Sony’s diverse electronics product portfolio, in conjunction with our rich entertainment assets and growing array of networked services, to engage with our customers around the world in new and exciting ways.”

Stringer recommended to the Sony Board of Directors that Mr. Hirai, currently Executive Deputy President, be his successor as President and CEO. Mr. Stringer will continue as Chairman of Sony Corporation until his ascension to the Board Chairmanship, which will become effective upon Board approval following the annual meeting of shareholders in June, when the current Chairman, Yotaro Kobayashi, will retire.

“Three years ago, I started to work with the Board on succession plans, and in February, 2009 we named a new generation of leaders to be my management team,” said Stringer. “Among them was Kaz Hirai, who had distinguished himself through his work in the PlayStation and networked entertainment businesses. Kaz is a globally focused executive for whom technology and the cloud are familiar territory, content is highly valued, and digital transformation is second nature. I believe his tough-mindedness and leadership skills will be of great benefit to the company and its customers in the months and years ahead.”

www.sony.net

“This exciting new service will offer some of Sky’s most popular content through a wide range of broadband connected devices,” said Jeremy Darroch, Sky’s Chief Executive. “Alongside the continued growth of our satellite platform, this will be a new way for us to reach out to consumers who love great content, but may not want the full Sky service. Bringing a distinctive, new choice to the marketplace will help us meet the needs and demands of an ever wider range of consumers.”

More details of the new service, due to roll out in the first half of this year, will be revealed closer to launch.

“This new product launch will build on our early leadership in multi-platform distribution. It will allow us to make our expertise and investment in content and technology work even harder, extending our options for continued growth,” said Darroch.

www.bskyb.com

In 1972, Ian Anderson wrote and recorded the Jethro Tull Progressive Rock classic album Thick As A Brick. The lyrics were credited at the time to the fictitious child character, Gerald Bostock , whose parents supposedly lied about his age. The record instantly became a number one Billboard Chart album and enjoyed considerable success in many countries of the world.

“As we baby-boomers look back on our own lives, we must often feel an occasional ‘what-if’ moment,” Anderson mused. “Might we, like Gerald, have become instead preacher, soldier, down-and-out, shopkeeper or finance tycoon? And those of more tender years - the social media and internet generation - may choose to ponder well the myriad of chance possibilities ahead of them at every turn...”

For the first time since 1972, Anderson and fellow musicians John O’Hara (keyboards), David Goodier (bass), Florian Opahle (guitar) and Scott Hammond (drums), as well as some guest performers, will take to the road to perform the original album in its entirety and there will be a second part to the show where Anderson and the band will also perform the sequel.

www.jethrotull.com

The fully automated PP-50BD, which can provide Blu-ray, CD and DVD output, allows users to work on other tasks while it produces up to 50 discs and more than 2TB of data in one batch, and can burn up to three single-layer Blu-ray discs in an hour. It also provides photo-realistic printing on the disc surface using Epson’s Micro Piezo printhead and 6-colour inks. One set of ink cartridges produces more than 1,000 fully-covered discs, and when a cartridge becomes empty, the PP-50BD automatically stops to avoid mis-prints.

“While the output quality is outstanding, the cost of each finished disc or the cost per archived Gigabyte is extremely low,” added Beckmann. 

When using recommended single and double-layer BD-R media, the PP-50BD’s accurate disc burning means organizations can rely on the readability of their archived discs for decades.“ Epson has drawn on its expertise in manufacturing robots to develop the patented AcuGrip robotic arm, which makes certain that only one Blu-ray disc, CD or DVD is grabbed at a time – even if they are stuck together. The system is controlled from the front, and its LED system shows the ink level status for each individual colour.

www.epson-europe.com

The Rollcoater is already installed in over 100 facilities worldwide, and the new version features a new design and some technical improvements. In addition to the standard 12 cm discs, the Rollcoater II can also apply the UV Layer to special format media, such as business card discsand 8 cm discs.

“The cost of only one cent per UV coating makes this machine the right choice for serious duplicators who want to offer their customers a professional waterproof result at a reasonable price,” ADR’s Björn Christophersen told Digital2Disc.

Another improvement over earlier solutions, he added, is the technique which is used to apply the lacquer layer. Instead of working with a spray nozzle which causes a hazardous fume, the Rollcoater applies the UV lacquer onto the discs directly with a rubber roll.

“Not only is this method more eco-friendly but also more efficient since no lacquer is wasted,” said Christophersen.

www.cd-robotics.com

Paramount recently released Paranormal Activity 3 as an all-digital version so that there is no need even to buy a disc, and launched ParamountMovies.com where consumers can access digital rights to UV content directory with the studio. “On the ParamountMovies.com website, a recent movie from 2010 costs $22.99 to buy rent in HD, yet a movie that is thirteen years old is only $3 cheaper and still costs $19.99,” Frost & Sullivan analyst Dan Rayburn fumed in his StreamingMedia blog.

According to Rayburn, the studio’s digital pricing strategy will alienate consumers: “What studio executive thinks consumers are going to pay $22.99 to stream a movie when we can buy the DVD for $7 or rent it for less than $2?” he asks. “The economics don't make sense for how the studios price digital content and the fact they are keeping Netflix and others from even renting physical discs, only so they sell more DVDs, clearly shows where their true interest lies - and it's not in digital.

“At some point, the studios are going to get burned just like the music industry did and while they spend a lot of time complaining about piracy, they need to wake up and realize that consumers are demanding digital content, for a fair price. So far, the studios are not willing to give it to them and over time, are going to see their business models crumble as of a result. They own arrogance is going to be the death of their legacy business.” For more facts and opinions on the UltraViolet initiative, read the article in Issue 13 of Digital2Disc and on our website.

www.digital2disc.com

The 11th of October 2011 could become one of the most significant dates for the home video market, ranking alongside the introduction of the video cassette recorder and the launch of the DVD player in terms of importance. On that day, Warner Bros released Horrible Bosses, the first video title to include UltraViolet functionality, a feature that could transform the way home videos are purchased, stored, distributed and watched.

The organization behind UltraViolet, the Digital Entertainment Content Ecosystem (DECE), is a consortium of more than 70 entertainment, technology and retail companies that includes most of the major Hollywood studios, Sony, Microsoft, Netflix, Best Buy and Tesco Entertainment.

Announced some three years ago, UltraViolet has confounded those who thought the initiative might not get off the ground. This was because there were so many issues to resolve, from developing a common file format (for interoperability) to digital rights management (UltraViolet supports five types), and from re-negotiating release windows to creating an infrastructure that supports the UltraViolet business model.

So what is so special about UltraViolet?

The answer is that, for the first time, consumers purchasing DVDs and Blu-ray discs will be given the option of also obtaining a digital copy that is stored in a ‘digital locker’ in the cloud, and which can be downloaded or streamed to a myriad of devices, including televisions, set-top boxes, DVD players, Blu- ray players, games consoles, tablets and smartphones.

THE NITTY-GRITTY

In July 2011, DECE launched the UltraViolet licensing system for the US market. Mark Teitell, General Manager and Executive Director, DECE, says: “In order to deploy UltraViolet into the consumer market, companies need to be licensees for one or more defined ecosystem role(s), and meet the technical specifications and compliance rules. UltraViolet is open to all companies who comply with these specs and rules. Our license fees structure is flexible and designed to be attractive to companies of all different sizes and structures, including a special feature that reduces entry costs for smaller companies.”

To date, 16 companies have taken out an UltraViolet license, which authorizes them for various roles within the UltraViolet ecosystem, including content provider, retailer, streaming service provider, app/device maker, and download infrastructure/services provider.

“Based on UltraViolet’s technical specifications, licensees can build retail services, apps and devices that interact with the open UltraViolet infrastructure,” adds Teitell. DECE has also started an UltraViolet licensing program in the UK, and expects to announce the first UK licensees in the coming months.

UltraViolet has been launched in the US, with the next territory set to be the UK, followed by Canada, although reports suggest that UltraViolet might not reach the UK until the latter part of 2012.

A number of studios have launched and/or announced UltraViolet titles. First off the blocks was Warner Bros, with two UltraViolet releases, Horrible Bosses and Green Lantern. In November 2011, Warner Bros also released Harry Potter and the Deathly Hallows: Part 2 as an UltraViolet title. Sony Pictures’ first UltraViolet offerings will be Friends with Benefits and The Smurfs. Paramount, Lionsgate and Fox are expected to launch UltraViolet titles in early 2012.

Jim Taylor, Head of Technology and Product Development for UltraViolet, explains how the system works from the consumer’s point of view: “No changes need to be made to the discs themselves. The only thing added is an activation code and a Web URL – users go to the website, enter their activation code, sign up for an account (if they don’t already have one), and get access to the UltraViolet version of the movie. The activation code is typically on a sticker inside the disc package.”

He adds that it’s possible to add PC or BD- Java software to take users to the activation website, and in some cases automatically enter the activation code. It’s also possible to put an UltraViolet digital file on the disc so customers don’t need to download it. These features could be added to future discs. Up to six people per household can register for an UltraViolet account and up to 12 devices can be registered by each account holder. Registration also allows users to transfer the digital content to various media, such as DVDs and memory cards. The result is what the DECE describes as a, “buy once, play anywhere” model, which should prove attractive to consumers.

Mitch Singer, President, DECE and Chief Technology Officer, Sony Pictures Entertainment, thinks that UltraViolet will have wide appeal beyond technology-savvy, younger consumers, “The UltraViolet Household Account extends to all family members,” he says. The UltraViolet launch is a soft one and, in the first phase, the service will focus on streaming services. The second phase will add download services for UltraViolet players and apps, and will be launched when UltraViolet players and apps become available in the market.

“In the short term, UltraViolet will be streaming only, so each streaming service will have specific hardware and software requirements. We expect a variety of solutions covering Windows, MacOS [Apple], iOS [iPhone/iPad], Android, and more specialized devices, such as connected TVs and BD players,” says Taylor. He expects the first UltraViolet branded players to appear in 2012. The UltraViolet player requirements are: internet connection, plus support for H.264 video, AAC audio, (Dolby and DTS audio are optional), and one of the approved DRMs. Users will be able to download files for use with their UltraViolet players and stream files to a variety of UltraViolet-compliant streaming solutions.

“There’s a device specification and a media specification that together define requirements,” says Taylor, “but if you’re talking about a particular type or speed of CPU and other specifications those don’t exist, since there’s such a range of options and combinations. As long as a device passes the compliance verification process then it can use the [UltraViolet] logo.”

SUPPORTERS AND SUCCESSES

At the moment, UltraViolet only supports a purchase model. “UltraViolet does not currently support rental and subscription models. We believe ownership, rental and subscription will all continue to be substantial in the market and are not assuming or asserting that any of these concepts will go away,” says Teitell. “UltraViolet is a major innovation to the ownership value proposition for consumers, and we believe it will have a positive impact on that segment, just as various innovations to the rental/subscription markets have impacted those sectors as well (and just as the DVD innovation impacted the market in the early 2000s).”

This position is supported by the Motion Picture Association of America (MPAA). “Our research has shown that a significant segment of the population will continue to purchase content, especially if the value proposition of ownership takes advantage of what the internet and today’s digital devices can provide, like cross-platform interoperability, while addressing the shortcomings we’ve seen in the earliest stages of the digital market.”

Jim Bottoms, Director and co- founder of Futuresource Consulting says UltraViolet is, “What consumers want – the ability to simply move content from one place to another, and watchitonaTV,in-carorona smartphone.”

Lavina Carey, Director General of the British Video Association (BVA), adds, “We all want UltraViolet to work. Interoperability is what the industry needs because of the convergence that’s taking place. More and more people are using connected devices and they want to move stuff around easily.”

Mitch Singer comments, “Considering the complexities of the development process, we have moved quickly to bring UltraViolet to market. For example, it took more than twice as long for Blu-ray products to come to market, and UltraViolet’s scope is broader. In addition, we had to not only design the business and technical aspects of how this transformation will work, but also help companies adopt and implement this new approach. The breadth and scale of this project has required significant co-ordination and effort by participating members.”

Jim Taylor says that UltraViolet technical development has more or less been completed, it’s all done. “At some point UltraViolet will probably add 3D video support. We’ve talked about adding support for music, ebooks, games, and anything else that gives consumers a better experience with UltraViolet’s open ‘digital library’ model. We’ll look into additional business models of subscriptions, ad-supported viewing, and so on. Many things are possible, but for now, we’re focused on the launch, and I think the consortium has done an excellent job of dealing with a huge number of technical and business challenges to come up with a system that makes buying and watching movies online vastly better than ever before.”

The first UltraViolet titles retail at regular prices, but surely UltraViolet will require a price premium? “We cannot comment on pricing, as it is up to content providers and retailers to determine the retail price for UltraViolet titles,” says Singer. “Prices for our first UltraViolet-enabled titles are not set yet, but we believe UltraViolet provides substantially more value than today’s marketplace offerings. We expect that, in some cases, there will be no price premium for UltraViolet, but rather UltraViolet will be offered as an additional amenity that makes buying and collecting content a more- attractive choice.”

The UltraViolet consortium has a very impressive list of supporters, including almost all of the big six Hollywood studios (Sony, Warner Bros, Fox, Paramount and Universal), but some big names are missing, notably, Apple, Amazon and Disney. All of these companies are developing their own cloud-based services, which could become a rival to UltraViolet. Apple is reported to be talking to studios about adding movies to its iCloud service and Disney has launched a teaser website for a new cloud service, formerly called Keychest, but now known as Disney Studio All Access.

DECE is putting on a brave face. “We are encouraged by the success we’ve had so far in bringing new members on board, and we continue to talk to a variety of companies about their involvement because we are an open, cross-industry consortium, though we cannot divulge specifics, “ says Singer. He adds that just because a company is not a DECE member doesn’t mean they won’t license UltraViolet and deploy the finished product/service to consumers.

DVD and Blu-ray, for example, have far more licensees than they do members in their respective associations. “We anticipate the UltraViolet streaming services will have apps that allow consumers to access their digital collections on iPhone and iPad, just as Flixster does today,” says Singer.

Taylor says that he is aware of UltraViolet products under development for MacOS and iOS. But if UltraViolet apps are developed for the iPad or iPhone, they will need Apple’s approval for use on these devices.

AND THE DRAWBACKS ARE?

“The absence of Apple and Disney is a major issue,” says Bottoms, “We think Disney will come round if UltraViolet is successful. But whether the content community can bring enough pressure to bear on Apple is questionable – Apple own that space in the mobile market. Tablet computing is all about Apple and it’s ironic that the iPad lends itself to this type of content. You can’t rule out alternative action by Apple.”

Tom Adams, Director and Principal Analyst, US media at IHS Screen Digest, notes that Apple’s co- founder, the late Steve Jobs, once said that he was only interested in interoperability when Apple had zero percentage market share in a particular market. “There’s no doubt that DECE would love Apple to license an UltraViolet app,” says Adams, adding that UltraViolet has been developed to halt a decline in physical disc sales, which were worth $14 billion in the US market in 2005, but are now down to around $10 billion.

Bottoms points out that UltraViolet’s payment model is unclear – for example, who hosts and streams the digital copy, and who pays for the service? “If I purchase my UltraViolet title from Tesco, will the retailer be responsible for streaming the content to me? Will retailers want to be involved?”

Taylor says, “Retailers and their DSPs (download service providers) are responsible for storing downloadable content. Streaming service providers are responsible for storing and streaming content. CDNs [Content Delivery Networks] are typically used for all of this.” Taylor explains that streaming service providers need to get both a license and files from each content provider and convert the file into whatever streaming formats the service uses. When an UltraViolet user goes to a streaming service, the service provider shows the titles that are available for streaming in their UltraViolet library.

Adams believes there are a number of potential candidates for operating UltraViolet’s cloud- based service, including Netflix (a DECE member), cable operators (Comcast is a DECE member), retailers (Walmart owns the Vudu movie streaming service, while Tesco has an 80% stake in the movie streaming service Blinkbox) or the studios (Warner owns streaming service Flixster and is using it to deliver its cloud-based UltraViolet content).

But Bottoms warns: “When the studios launched BD-Live, they didn’t anticipate that you would have to refresh the content if you wanted people to revisit your site. It’s not a one-off cost but an ongoing commitment.”

Users are restricted to three simultaneous streams, but there isn’t a set time frame for how long content is stored in a user’s digital locker – rumours have suggested that it could be as short as 12 months, although Warner Bros has set a three-year period for storing content for free. Digital locker providers are also free to set their own payment mechanisms. Concern has also been raised about the impact of UltraViolet on release windows and in particular the pay-TV market. HBO has agreed to drop its window with Warner Bros, whereby pay-movies shown on HBO are not available for rental or purchase online, but at the time of writing, it was unclear whether this clearance will also apply to other studios.

There are also questions on how UltraViolet interacts with legacy hardware and discs. Jim Taylor says, “There are several ways UltraViolet content can be delivered to legacy devices: existing streaming services can add UltraViolet support; new software can be delivered to open platforms like PCs and smartphones and new firmware can be delivered to closed platforms like, Blu-ray players.”

When it comes to legacy discs, Singer says, “Similar to some of the promotions with Blu-ray Disc titles that enable consumers to ‘trade up’ from DVD, we anticipate that studios will offer consumers the ability to upgrade currently owned discs or digital files to their UltraViolet digital library. The ultimate decision, though, is up to individual content providers/retailers to offer consumers this type of upgrade.”

Jeffrey Bewkes, Chairman and Chief Executive of Time Warner, has said that: “If you want to take your old DVDs into retailers and have them put them into the cloud and therefore be available for you to move from device to device, you’d be able to do that.” Taylor says that a disc could be treated as a proof of purchase and extended to UltraViolet. “The important thing for the studios is preventing less-than-scrupulous discs or borrowing discs and pretending that they own them. So they may require you to take your discs to a retailer who will permanently mark them to indicate that they've been copied to an UltraViolet account.”

But Bottoms is sceptical: “I can’t imagine a retailer being too happy if I turn up with a trolley-full of old discs (many of them purchased from elsewhere) and then ask the retailer to put them on the cloud for me.”

The BVA’s Carey says that if UltraViolet is to succeed, there needs to be widespread availability of fast broadband and that is certainly not the case in the UK. “And when fast broadband is universally available, the industry will need legislation to prevent unfair competition from illegal download sites,” she adds.

Bottoms adds that education will be key to UltraViolet’s success. “Consumer awareness is critical. Even now, 70% of UK consumers don’t know that Blu-ray players also play DVDs. The problem with UltraViolet is that many different companies are involved and that makes it harder to put across a coherent message.” Many in the home video industry will be hoping that UltraViolet overcomes these challenges, and that like the arrival of DVD, it re-energizes the video market.

www.uvvu.com

The application of augmented reality and mixed reality to such TV-related content is still fairly limited, but some embryonic efforts in this area give a sense of the potential impact of these technologies on TV programming, and illustrate the growing convergence of TV with an array of immersive technologies. Of course, one of the key questions with these efforts is whether augmented reality and mixed reality offer more than novelty effects, and truly add greater dynamics and long term value to TV content.

A number of recent efforts to integrate augmented reality with TV shows and promotions give a sense of the diverse approaches to blending augmented reality with TV content. ProSieben Sat 1 reportedly has had success with the application of augmented reality to its science TV show Galileo, which airs daily. “About 10,000-12,000 users are interacting with the augmented reality app on the show per quiz,” claims Stefan Vaupel, editorial director of the show.

The augmented reality element connected with the show incorporates a quiz with which viewers can interact via phone. The quiz poses multiple choice questions, and, in order to participate, viewers need to hold their phones up to their TV sets, and point them at the answer of their choice. Image recognition used with the show detects the response and submits it to the show. After registering their responses, viewers receive feedback regarding the veracity of their responses. The producers then display statistics of the top scoring quiz participants.

At the end of October, ProSieben ran an “extended form of augmented reality” on Galileo, reports Vaupel. That version of the show allowed viewers to also “collect gold coins to raise their social level with a virtual medieval society”, he notes. According to Vaupel, the show opted to use augmented reality because augmented reality offers “greater interactivity” than TV usually offers, and because the show is “always keen on using and offering new technology to our viewers”. He believes that augmented reality is particularly well suited to the quiz show format, as augmented reality allows viewers “to view how well they’re performing in comparison to other players.” According to Vaupel, ProSieben is mulling over other possible applications of augmented reality on its shows.

Showtime Networks also recently inaugurated the use of augmented reality in its promotions. The channel alluded to an augmented reality ad for its Homeland program on the cover of the September issue of Wired magazine, and ran a teaser ad in that issue linked directly with an app called ‘Watch Careful.ly’ which instructed viewers how to participate in the augmented reality promotion, reports George De Bolt, Senior VP, Media, Promotions, and Partnership Marketing for Showtime. The channel also ran an actual augmented reality ad in the October issue of Wired.

To activate these promotions, viewers with smartphones were advised to point their phones at their screen with the ‘Watch Careful.ly’ app or at the augmented reality ad inside Wired, enabling them to access an animation, game, and videos promoting the upcoming series of Homeland and a preview of the new season for Dexter.

According to De Bolt, the company’s principal rationale for employing augmented reality in the promotion was to “break through the entertainment clutter” at the start of the fall TV season and “stand out” in a way that would attract the attention of the TV industry as well as viewers. It also opted to use augmented reality because the technology “builds in metrics” and “enables you to elicit viewer feedback, if it’s done properly”, he elaborates.

Although De Bolt wouldn’t cite specific figures, he claims the campaign was a major success, and the AR promotion “has been very well received by the trade”. He says that Showtime will certainly “consider the use of AR again” in suitable promotions, “depending on the marketing goals” of those promotions.

Perhaps one of the more dynamic applications of mixed reality on TV is the Bamzooki mixed reality TV game show on the BBC. The show allows “kids in a studio to interact in real time via a networked PC with virtual reality creatures” called ‘Zooks’ explains Rupert Harris, Innovation Executive at the BBC and formerly series producer of Bamzooki. Participants on the show control the Zooks by calling out instructions during battles, and are equipped with Zook Toolkits comprising a simulation and MotionPlayer that enable users to view their Zooks in action.

The show utilizes the BBC’s virtual studio technology, which combines live action footage and computer images in real time. The show was first introduced on CBBC in 2005, and was redeveloped in 2008, Harris reports. Repeats of the show appear regularly on the BBC. The show has been “very successful”, according to Harris. He claims the 30-minute show was the “highest rated show” in its time period in 2009, and was one of the “top 10 most downloaded shows on the iPlayer” in its time period in 2010. Since its inception, the show has generated “hundreds of thousands of software downloads and hundreds of thousands of uploads of virtual creatures” connected with the show, reports Harris.

One of the key aims of Bamzooki was “reclaiming young audiences that have migrated to games,” and entering “a space which kids are already inhabiting.” Harris notes that “games in a traditional sense” won’t work on TV, and that simply “watching video games on TV isn’t fun.” The main focus of Bamzooki was enabling kids to play a game and participate “in a social and expressive experience” that truly exploits the convergence of TV, mixed reality, and social media. He believes TV viewers are seeking greater “engagement” but not necessarily higher “interactivity”.

Harris acknowledges that the cost of developing mixed reality/augmented reality components to TV shows isn’t cheap, reflecting the “long software development time” involved with creating such features. At the same time, he emphasizes the importance of “delivering high quality games” connected with TV shows. Harris is planning to develop other shows in the “children’s TV, young adult, and family TV space” incorporating mixed reality, though he can’t make specific announcements on such shows yet.

www.bbc.co.uk
www.prosiebensat1.com
www.sho.com/site/homeland

Six thousand dollars for a Beach Boys special edition package! Who would ever have expected that in a time when physical goods, especially music CDs and DVDs, are said to be dwindling? “Despite the sag in retail sales, speciality packaging projects are coming up with some new alternative markets for packaging opportunities,” says Dyan Spigner, Vice President of Sales Home Entertainment, Shorewood Packaging. This trend is true for Europe as well as the US.

Olivier Durand, Managing Director of Belgium-based Emthelo agrees with Spigner. “Father Christmas is going to have more stuff to carry this year! The trend remains heavily on special packaging: with growth of around 10 to 20% in the European market.”

Melissa Lazarus, Vice President of Sales at MultiPackaging Solutions (MPS) adds that decorative technologies, like foilcote and gemcoats, are being used more often, even on standard packaging, in order to put a package a little ahead of the rest at retail. MPS worked on many of the special music titles released this year as well as the Ben Hur 50th Anniversary Ultimate Collector’s Edition released by Warner Home Video. Vice President of Sales Brit Davis says, “The amount of special packaging and what is being recognized as added value to the music consumer is definitely different than what added value is to the home entertainment or the games consumer.” While added-value doesn’t translate the same, she says, it appears that all markets are booming.

Jeff Baker, Executive Vice President and General Manager, theatrical catalogue at Warner Home Video says what consumers are looking for in movie buying and what they want from their packaging has changed, but in certain price ranges demand has grown stronger than ever. What may be a new part of this scenario is that collector’s editions for games packaging are getting stronger while episodic television series, once a huge part of the boxed set business, are now less elaborate.

Record labels and movie studios are creating limited editions and different varieties of the same titles so as not to leave out any buyer. While brick and mortar stores have scaled down on offerings, there are online line retailers and direct to consumer options offering many new titles for this holiday season and beyond.

PACKAGING CREATIVITY FROM THE ARTISTS

2011 has proven to be a busy one for speciality packaging with offerings from many icons such as The Grateful Dead, The Rolling Stones and Pink Floyd. The real surprise may be, however, the amount of creativity that has gone into packages from newer artists like Jay-Z and Kanye West with their Watch The Throne (WTT) collaboration on Def Jam Records. Watch The Throne was released earlier this quarter.

“Kanye worked directly with the Givenchy designer Ricardo Tischi,” says Melissa Lazarus. Working with a non-music designer resulted in a soft pack that closes and then opens to a cross pack. It has multi-level embossing on all of the panels. It is paperboard, but looks like metal. “This took months and months of working with Kanye and his designers.”

After the package was complete, Jay- Z and Kanye went as far as to open a pop-up store in New York for three days to promote this album. “When the buyer walked into the store, there was the car that was in the video and the package was on the throne!” Lazarus adds.

One trend has been creeping in for the last couple of years and penetrated even further this year is vinyl. Frank Salvaggio, General Manager at Ross-Ellis explains: “Indie artists often control everything that happens around them. The more independent the artist is, the more control they have – that includes deciding to go vinyl. We are doing so many vinyl jackets. Some of the artists are totally unknown while others put out 40 or 50,000 units.”

Shorewood has worked on several packages that include vinyl such as Lady Gaga’s vinyl picture discs from Interscope. Vinyl is placed into a black box with red velvet interior, and individually number stamped for collectability, says Spigner. Nirvana’s 20th Anniversary LP package of Nevermind (Geffen) features four pockets that flip like pages of a book. Then, there is Soundgarden’s Telephantasm (A&M) which includes tie-dyed custom vinyl, an oversized booklet, a poster in a vellum envelope and board pockets for CDs. Multiple consumer bases exist for consuming entertainment, comments Davis.

“A lot of the uber packaging is being sold direct to consumer on the artists’ websites and also through online retailers like Amazon.” An uber package that has generated a lot of interest is Europe 72 by The Grateful Dead – 7,200 units were presold on the band’s website. Buyers had to pay for the boxes before they were available. The sets sold out inless than four days at a price of $450. When the set was purchased, the buyer was able to order it with their own unique content written on a sticker on the trunk (eg, “I love Jerry Garcia!”). As a result of all that demand, a generic corrugated box was created as well. It sold at the same price but with none of the extras!

The Beach Boys’ SMiLE Autographed Light Up Box Set and Hobie Surfboard package mentioned above is limited and is being sold direct to consumer. The Capitol Records set includes a switch inside the box lid that allows the fans to turn the ‘store’ light on and off. Artwork for all of the SMiLE sessions physical and digital configurations has been created with, and inspired by, Beat-Pop artist Frank Holmes’ original 1967 LP sleeve art and booklet designs intended for the SMiLE album. With its three-dimensional shadowbox lid, the light up box without the surfboard will sell for $699.99. Another version which is a two-CD autographed set will sell for $99.99.

LIMITED EDITIONS AND COLLECTABLES

“The labels are not shying away from providing limited editions and collectables. The Beach Boys project shows an exciting direction of putting forward new ideas,” says Davis. “Labels are offering options. They are not excluding any potential buyer. While these kinds of packages don’t translate to every artist, there are probably other kinds of special packaging that could relate to every artist. It’s great that the labels are partnering and connecting with the fan base to figure out the right connection.”

The Nirvana set includes a 12 x 12 slipcase with die-cut centre and printed full colour plastic window to reveal the water background of the original replicated art. The package has four discs and one DVD, a Smyth sewn four colour book with original replicated art, as well as a replicated original poster. “Additionally, one thousand actual original posters were randomly inserted to elicit excitement amongst fans,” explains Spigner.

According to Shorewood’s Dustin Wills, Vice President of Sales, UK, “This package is gold dust. Universal put in an emergency reorder for this package!”

Another splashy package to come is Lulu, the collaboration between Lou Reed and Metallica. Once again, the package is a limited run. Wills describes it as a tube that is 14cm in diameter by 125cm long. Included are a poster, song lyrics, three high quality prints of Anton Corbijn, photos of Lou Reed and Metallica, and the double CD of Lulu in a unique folding slipcase. Each tube is numbered. Perhaps a little less splashy, but still special and limited are boxes from Legacy such as Billy Joel’s Complete Albums Collection in a 15-CD set; Leonard Cohen’s Complete Albums Collection, which contains all 17 of Cohen's albums; and Wynton Marsalis’s collection of 11 CDs Winging Into The 21st.

HIGH END AND LOW END

An area where packaging has not always been ‘special’ is games. Now, according to Spigner, the games market has shown growth in collector’s editions. The Mortal Kombat collection (Warner Brothers) includes a set of book ends, full-colour case-bound art book, and the game. Space Marine (THQ) has a collection that includes a full-colour sewn book, a custom deck of cards, purity seal collector’s item and the game. The package is a book style box, slid into a slipcase and foil wrapped with registered, sculpted embossing. The Batman (Warner Brothers) collection includes a full-colour perfect bound book, a figurine, and the game. The structure has a unique opening mechanism to display the figurine and hold components.

All interviewees agreed that the DVD business has changed, but that’s not to say it’s gone. Whatever happened to the television series boxed sets?

They are still there, says Salvaggio, but not as apparent at brick and mortar stores. Packaging has been scaled down. Admittedly, DVD volumes are down, but there are a lot of titles, and packaging is still key to selling. A lot of the ‘extras’ in film special packs have to do with documentaries and added materials rather than add-ons like posters. Sources say that while toys may be less this holiday season, they are not gone completely.

Titles like Bridesmaids, Pirates and Lion King all feature a DVD or Blu-ray original disc with a bonus disc or premium items such as Lego sets, tin piggy bank, calendars, or something of that nature, according to Spigner. Also, while there doesn’t seem to be as many in-store exclusive packages, there are some, like the Best Buy exclusive for Transformers 3 with two covers that have elaborate embossing on shiny foil. Fast Five is a Target exclusive that features DVD /BD with soundtrack. It is a Smart package with a magnetic book flap.

Warner’s Baker says that this holiday season, there will be the high end consumer buying sets like Ben Hur, Lord of The Rings, Bambi, Lion King and Harry Potter. The low end, under $10 market is equally as strong: “Even under $5,” he says. Warner Home Video is offering many bargain packages. For example, there are four movies in the TCM Greatest Classic Films Collection: Holiday (Christmas in Connecticut, A Christmas Carol 1938, The Shop Around the Corner, and It Happened on 5th Ave). It retails on Amazon for approximately $10. The packaging is sleek and small but it still captures the collector’s eye looking for a bargain.

This no-frills buyer may also want to buy perennial favourites like The Polar Express and A Charlie Brown Christmas but with no bells and whistles. The avid fan is not being ignored, however. “About a year ago, we repackaged all of the Clint Eastwood films we had in our library,” Baker says. “The key art we had from those films was old and antiquated, so we updated and contemporized it. When you see these older films now, they look like they came out yesterday. Repackaging the product gave the movies an updated feel."

Older films like Breakfast At Tiffany’s (Paramount) and Citizen Kane get new packaging as well. Citizen Kane’s new Blu-ray 70th Anniversary Ultimate Collector’s Edition will have more than three hours of bonus content and an array of collectable premiums including a 48-page collector’s book filled with photos and behind-the-scene details, a 20 page reproduction of the original 1941 souvenir program, lobby cards, reproductions of rare production memos and correspondence.

Willy Wonka and the Chocolate Factory celebrates its 40th anniversary with a limited and numbered Ultimate Collector’s Edition Blu-ray DVD Pack from Warner Home Video. The package contains over an hour of extras as well as a 144-page book, with rare photographs. Sweet premiums like a retro Wonka Bar-shaped tin box with scented pencils and eraser and a limited time Golden Ticket Instant Win Game for a chance to enter and win a trip for two to Los Angeles complete the tasty offering. Just like in the movie, five Grand Prize winners will receive very special trip for themselves plus a guest. In honour of the 40th Anniversary, 40 limited run posters of the original theatrical one-sheet will also be given away as runner-up prizes.

Salvaggio says, “DVD is not what it used to be, but though the volumes are down, there are a lot of releases out there. We have a lot of work; physical products are still very desirable gifts. Our new PrimaBook is an all board package (DVD, BD or Music), with Faux Hard covers and can contain as many discs as desired. It can also be finished with all the classic options: embossing, foil stamping, spot varnishes, etc. We introduced it at the beginning of the year and it has become very popular, particularly for DVD/BD releases.”

As with music, direct to consumer marketing is also happening with film, according to Spigner. She cites the Danny Elfman and Tim Burton 25th Anniversary Music Box boxed set complete collection of their collaborative music.“The package is a magnificent collector’s piece, featuring a metal functioning zoetrope, wood material box adorned with metal embossed tin plates. It includes 16 discs and a DVD, a 264 page smythe sewn, cloth wrapped booklet, decorated with gold hot stamping, 12 film strips, and custom USB. It is being sold online with a limited edition quantity for $500 and the purchaser receives a signed certificate of authenticity."

WRAPPING IT UP

While some industry observers may be taken by surprise, packaging companies and content providers have concluded that while physical entertainment continues to reinvent itself, this holiday season promises to be a good one for labels and studios who are convinced that if you offer consumers beautifully packaged product, they will buy!

www.internationalpaper.com
www.emthelo.com
www.legacyrecordings.com
www.multipkg.com
www.warnerbros.com

First of all, the name Cinram has historically been very firmly embedded in the physical media side. Is it a good fit? Is the move to digital offerings a necessity because of the way the industry is going, or is it a natural progression of the company’s overall strategy when it comes to content delivery?

It’s definitely a natural progression, and even some of the smaller companies that handle very specialized replication and distribution deals are now being tasked to get into the digital space. I think anybody who remains a physical-only service provider will really face challenges, and that provides a great opportunity for Cinram to offer our solutions. I don’t think many customers and content owners now are just looking to physical as the be-all and end-all of how their products will be distributed. Some are still testing the water a little bit more cautiously and slowly because physical is still important, but at least they are testing the waters.

Presumably there is still a place for physical – particularly Blu-ray – for a while? After all, many people see it as being not only a good platform for content delivery in itself, but also as a natural bridge to digital delivery with things like Triple Play, BD-Live, and the UltraViolet initiative. Do you see it as a natural progression or will the move to digital delivery be more revolutionary?

I definitely believe that Blu-ray will be one of the biggest transitioning platforms to get people involved in digital. In parallel with that is UltraViolet and manufacture-on- demand discs. MOD services and platforms, including our own, allow consumers to get a physical copy of the content that they want and also allows them a digital play of that content. Consumers can then watch the content digitally while they’re waiting for their physical disc, and when they receive their physical disc, they have two formats of the content.
On the UltraViolet front, consumers have an offer for a standard digital file format that plays on multiple devices; however, growth of UltraViolet is reliant on both consumer and retailer adoption so we'll see how the rollout continues. MOD, UltraViolet, and Blu-ray are definitely going to be ways that the consumer is going to be introduced to and educated on, what digital is, how it works, and how it can be of benefit to them. Digital has definitely taken off, but its rollout is a little bit slower than people thought: while there are always early adapters to technology, getting the rest of the population to convert or to try it is sometimes challenging. Often the consumer isn’t educated on how it works and what is the benefit to them, or they don’t have devices that enable them to actually partake in that digital distribution model.
I think, particularly towards this end of this year, consumers will be buying more consumer electronic devices that are connected to digital platforms and services and we have to make sure that from the studio, content owner, and vendor sides through to the end user, that the consumer is educated and they understand what they get. The last thing I think that anybody wants to see is consumers frustrated with a digital offering because they don’t understand it.

Education is a very important topic. At this year’s ESCA Europe event, I moderated a panel discussion on Blu-ray in Europe and the panellists were saying that even with Blu-ray there’s a need for education - as you say, there are the early adopters who may give a falsely good impression. However, things like tablets and Kindles, and social media, are being taken up by a lot of people who are older and not particularly tech-savvy – will there be a sudden hockey stick curve take-up of digital offerings as that generation gets more used to streaming and downloading content and realizes what digital has to offer?

I agree. The tablet is a much more friendly device, more so than a traditional mobile phone and your PC. It has portability and is easy to use. With touch-screen technology you can be up and running quickly and consuming TV, movies, music, e-books, etc, with a couple of really quick touches on an iPad, or other tablet device entering the market. It’s not as burdensome as having to be tied down whether to your desktop or even your laptop. As well with the growth of connected TVs in the market adaptation will come more quickly. It may not be hockey stick growth but it will definitely be significant and that will drive digital growth particularly in the fourth quarter and early 2012 because so many of those devices will be in the market.

It seems that, as well the consumption of content on mobile devices increasing, so is second- screening with people multi-tasking and using their tablets while they’re watching TV. Presumably then there is also a responsibility for the content owners, the technology providers, and the service providers – such as Cinram – to make sure it all works seamlessly and transparently?

Correct. That’s one of the greatest benefits for us of having acquired 1K and building out our digital side. We have the ability to not only speak to the creative content owner on the studio side, but we also have a very robust technology team working with those evolving digital technologies that allow consumers to interact and transact with content on their personal device as well as watching it on their television. It’s giving consumers more opportunity and it’s creating more brand awareness to the content owner and platforms that deploy those technology solutions.
Some of the applications that 1K and Cinram have developed and are developing are not just simple linear plays of content, they allow you to really transact with the content and to go in and see enhanced footage. For instance, the On The Road app that we did for Penguin is an excellent example of this type of product. Although it falls more on the e-publication side the experience with the content is a real in- depth experience that allows for not just only a straight hear, read, or play, but also for a lot of enhanced content to be built in to create a more intimate and deeper experience.
With On The Road you can really drill into additional facts and archival footage of content that otherwise you’d be hard pressed to find online. You can dive into the content to see the maps of travel throughout the US right at your fingertips, and you can then go back to reading your book. Or because of the story of Jack Kerouac and the bands that he was part of, if you want to hear the music you hit on an icon and you can continue to read the book while you listen to the music.
The experience is not only true with ePub and books online but also with magazine subscription apps that continue to roll out. The magazine subscription business is very actively figuring out ways to add video content to enhance even traditional magazines and subscription apps that might be on mobile devices.
The technology is super beneficial for the content owners who have huge archives of footage that it has either never been possible to put on a disc, or has had to be put on multiple discs. The question in the disc model has been: will people continue to swap between discs to get the content they want? Now it’s very simple to pull archival footage out, get it into a digital format and allow the consumer to really interact with it.

So, to get back to Cinram specifically, you started off right away by saying, as I understand it, that your digital and physical supply chains are pretty much one and the same, just depending on what people want. Is that more or less correct?

Yes, that’s absolutely correct and also in many cases the client is also one and the same. There are studio content owners that we may not be doing physical replication and distribution for, but we’re doing their digital content development including extras or LPs, enhanced menu development and programming, and application development, and then delivering those assets back to them or deploying solutions to platforms on their behalf. While of course the goal would be to support them in both the physical and digital worlds, some clients have established paths and we definitely don’t shy away from supporting anybody and any content owner that wants to explore the digital space or has multiple inputs into the digital space.
Again I think one of the greatest assets in Cinram acquiring 1K is their ability to not only work in the digital creative space but also the technology space. Adding the digital supply chain piece that we’ve built at Cinram serves to enhance those services and delivery mechanisms and also allows for a standalone piece (digital supply chain services) for those existing or potential customers that have the need. In reality the additional digital supply chain that has been built very much parallels the physical supply chain in terms of the use of shared assets to get out into the physical or the digital world.

Did Cinram have any disadvantages being a relative late-comer to the digital space, because it was very much traditionally in physical media, or has your own entry into the company and the acquisition of 1K pretty much brought you up to speed to be a major competitor with anybody else?

We were a bit behind entering the digital realm but with the acquisition of 1K and with my joining, along with the experience and background I’ve had of building up the Warner Bros digital supply chain when I was there, I would say that we are at least on a par with, if not ahead of many of our competitors, based on the breadth of digital opportunities that we can bring to the table. Some of our competitors have a digital supply chain in place but they might not have the ability to actually enhance content that they’re working on, deploy advanced technology or programming, or to add creative elements to it. At Cinram we have the ability to satisfy any client’s needs as our offering is not just a straight digital supply chain solution, it’s all the bells and whistles along with the creativity and technology aspects that go around that. Our goal is to truly partner with our clients and to deploy solutions that meet all of their needs, whether in the physical or digital pieces or a combination of the two, along with delivering advanced technology solutions.

I know that Cinram’s CEO Steve Brown has very strong views on the need to eliminate waste in the physical supply chain. Is there an equivalent in the digital supply chain, if not in a physical product, but in steps that could be cut out, or wasted effort that could be reduced or eliminated?

For the digital supply chain in general there is some waste because there are so many different formats and so many different types of digital files. Even though UltraViolet has provided a standard, each platform is still unique in the way that it wants to display/deploy content to its consumers.
I think it’s very similar to the way that a physical retailer wants to see that they have the competitive advantage on a Blu-ray Disc or on a traditional DVD because they have content that was made for them only via retailer exclusives eg, Target only or made for Wal-Mart only. There are different formats that the digital platforms want to deploy in terms of use of mezzanine files or transcoded files or what each platform is able to offer, Apple seeming to be the leader currently in terms of being able to add enhanced or additional content via Apple extras and LPs.
A different type of waste versus physical is introduced due to the different files needing to be delivered over and over again: you have an Apple spec, Microsoft spec, Amazon spec, Netflix spec, etc, and they’re not all the same.
The good news is that it’s not physical element waste due to proliferation of SKUs that requires the need to make all those different types, it’s just one mezzanine file delivered in a myriad of different ways, in many cases over and over, depending on the digital platform need. However I don’t think quite honestly that at any time in the near future every single retailer is going to want to use the same spec as everyone else because that’s where the competitive advantage is.
To eliminate some of the waste in both the physical and digital supply chains we’ve streamlined the need for multiple delivery of raw material assets by allowing our customers and clients the ability to send one set of core assets to us at Cinram which we can process and deliver both to a physical retailer or a digital retailer. By not requiring different assets for us to supply the physical side versus the digital side, that’s definitely eliminating waste. While on the digital side it is not creating physical waste to put out a new SKU, there is some waste created as streamlining is not fully evolved. However, we strive to get there soon via standards and new technology deployments.

www.cinram.com

The story began around ten years ago when the music industry hoped to recapture the boom years of CD by launching a new super hi-fi disc format called DVD Audio. It sported a new DRM system that would stop copying by watermarking the audio.

The DRM came from US company Verance, which had been formed in late 1999 by the merger of two high-tech startups, Solana and Aris – who had developed a watermarking system called MusicCode for the Secure Digital Music Initiative (SDMI) to use for controlling music downloads. Verance claimed its digital mark could survive analogue copying and internet distribution because the digital mark was integrated with the analogue music waveform. So anywhere the music went, the mark went too.

Although Verance would never tell how its system worked, patents filed by Aris and Solana revealed plans to modify signal peaks in a coded pattern, and add a coded spread spectrum smear of ‘coloured noise’ to an audio signal.

Does it make sense to sell DVD-Audio on the promise of purer sound quality, while violating the sound, audio buffs asked?

This unanswered question became academic because DVD-Audio flopped. But in June 2009 the AACS Licensing Authority, which sets the standards for Blu-ray copy protection, decreed that a Digital Rights Management system called Cinavia, which relies on Verance watermark detection, should be used in BD players. Content providers could then use Cinavia marks to copy protect their software.

A few, but not many, BDs now use Cinavia. You can spot them by the small logo on the outer sleeve eg, on Battle: Los Angeles, The Social Network or The Other Guys.

Only a very few BD players, notably Sony’s PS3, have built-in Cinavia detectors. So the system is not yet biting. But the AACS rules say that from February 2012 all new BD players must have a detector built in. Marking will remain optional for BD discs, though.

“This is the first time watermarking has been used in a consumer experience,” Richard Atkinson, ex-Disney and now Chief Piracy Specialist & Consultant, Anti-Piracy Worldwide, recently told ESCA Europe: The Entertainment Retailing & Supply Chain conference. “The technology works. It is mature. That is not an issue any more. So far no-one has defeated Cinavia. It has been incorporated into key industry standards. But adoption by the hardware and software industries has been slow because AACS needed to ratify Sunrise dates, when makers of new players have to start using Cinavia, and Sunset dates, when sales of players without Cinavia are forbidden. So far it has been optional.”

I set out to test Cinavia against the latest off-the-shelf home copying hardware tool, the Hauppauge Colossus PC card which is on open sale in the UK (eg, from Amazon, for around £150). Colossus plugs directly into a standard PCI Express slot inside a PC. Like the previously released standalone HD-PVR from Hauppauge (which connects to a PC by USB lead), Colossus has its own on-board H.264 compression chips, so even a budget PC can capture and encode 1080i video, without judder, in real time.

Whereas the standalone device only had analogue component video (YCrCb) and digital optical SP/DIF inputs, Colossus also has HDMI connectors. Exactly as intended, the HDMI connection from a PS3 (or Panasonic BD player) will not deliver any signal to Colossus. However the HDMI input on Colossus can be used to capture HD footage streamed direct by HDMI cable from a Cisco Flip camera, for easy burning to blank DVD as two hours of AVCHD – which then plays like a Blu-ray Disc. The piracy implications are obvious.

Also, though some HD receivers now only have HDMI connections, which are usually encrypted, both the Xbox360 and PS3 consoles have component connections, which are unprotected even when playing HD material.

For research purposes I used Colossus with component and SP/DIF connections from a PS3 to copy test sequences from Blu-rays with and without a Cinavia logo. Test rips of non-Cinavia Blu-rays played perfectly on a PS3 and Panasonic player. But when test rips from a Blu-ray with Cinavia logo were played on a PS3 the sound muted after around 15 minutes and a Cinavia warning message appeared on screen.

PS3 playback of test sequences from an unauthorized download of Cinavia-protected material shut down completely, almost immediately. The same test rips and sequences played perfectly on a Panasonic BDT-210 BD player, which has no Cinavia detector. I drew the line at taking my Flip HD camcorder to a cinema showing a Cinavia-protected movie...

It was already clear that, when implemented, Cinavia works as Richard Atkinson says.

So why is the potential magic bullet not much used?

Says Atkinson: “Integrating Cinavia into the production workflow is complicated. There is a clear distinction between the marks used for home video and for theatrical use. The system completely shuts down playback of an illegal or camcorder copy of a cinema film in under a minute, but an illegal copy of a disc intended for home use plays for around 20 minutes before the sound mutes. This is known as ‘Birthday Party’ protection. It covers the case where someone is innocently shooting a children’s party and the camera microphone ‘hears’ a protected disc legitimately playing in the background.

“So if someone in the post production chain uses a theatrical master to make a disc for home use, for instance a DVD, it can be a problem. You can’t hear the mark but it’s in there. So the studios have been cautious.”

Says Tom Moran, Senior Director Media and Entertainment of IT infrastructure specialist Savvis: “There is also the licensing cost. The royalties all add up, on top of payments for MPEG and so on. Then there’s the cart and horse issue, why use Cinavia on content if it is not going to be detected? Everyone is asking what makes most sense.”

Sony confirms: “As it stands no Sony Blu-ray player or BDV system supports Cinavia Digital Rights Management; however, work is being done to include this in future – the date for this is currently TBC.”

And Panasonic? “Currently no, but will be from the production of 1st February 2012 (although) it is optional for BD disc titles implementation.”

What about PC player software?

Says CyberLink: “We will add Cinavia watermark next year when it becomes mandatory for Blu-ray player.”

Nero says it is, “Not yet supporting this copy protection technology and is currently working on its implementation, in order to meet the official timelines that the industry as a whole will have to meet for its support.”

Rovi (formerly Macrovision, the copy-protection evangelist and proselytizer) now owns Roxio and is currently promoting a new version of its software, Creator 2012. But Rovi confirms: “There is no existing and/or upcoming Roxio software with BD playback that supports Cinavia Digital Rights Management.”

The Blu-ray Disc Association says: “This is a company-by-company issue, and is not something that the BDA is tracking.”

Hang on! The Blu-ray format was sold on the promise of better protection than DVD. So perhaps it would be useful for the BDA to start showing more interest in the adoption of that protection.

For the past two decades Chris Carey has been deeply involved with the technical and operational dimensions of delivering digital media across a number of divergent but complementary landscapes. Most recently, prior to setting up as an independent consultant, he served as EVP of Worldwide Technical Operations at Paramount Pictures, with responsibility for the studio’s mastering and distribution supply chain, managing all technical facilities and operations and leading the Paramount Digital Studio project, an initiative to support file-based workflows from production/cinematography through distribution to partners and consumer-facing platforms.

Previously, Carey was Chief Marketing and Technology Officer at Technicolor, where he headed up a project to consolidate the operation’s production infrastructure and increase efficiency through the centralization of key areas. He also served as SVP of studio new technology with Walt Disney Studios, in which position he represented the studio in technology-standards efforts.

“The key to running a successful media-delivery operation is a streamlined infrastructure, efficient media-asset management and standardized data-exchange formats,” says Carey. “At Paramount I oversaw the servicing of our mastering and digital supply chains – getting assets out to DVD and Blu-ray authoring departments and then to digital-distribution retailers around the world – and our storage, film archive, content-protection and security policies.

“At Technicolor, I was charged with building a strategy to realize a digital version of the company. Technicolor grew up as a film laboratory and then, more recently, a VHS, DVD and Blu-ray replicator – bricks-and-mortar functions – but it also acquired other post-production facilities. I was tasked with developing a global private network for Technicolor with a digital asset-management and asset-servicing platform that would allow them to provide services in an all-digital world.”

There are major differences, Carey stresses, between strategies developed for consumer-targeted delivery mechanisms and establishing infrastructures for content-creation clients.

“The supply chain out to the retail space – either physical media or digital delivery to the consumer via iTunes, Amazon and similar outlets – is a highly unpredictable, on-demand model. Whereas B2B is much more predictable, in terms of supplying licensing deals that a content company has made with a reseller. Those thousand titles, for example, have an availability date of such and such; we can program our throughput for that workflow and schedule. However, in the consumer-facing digital-delivery arena, that’s where scalable, flexible content-delivery architectures come into play, including CDN caching strategies.”

Regarding the continuing transition from physical to digital media, “The landscape is changing dramatically,” Carey offers. “Beginning with the first meaningful digital-licensing business in 2007 and 2008 – Apple’s iTunes started selling video in 2008 – there has been a ramp up for the digital-supply chain. Now every on-line retailer that wants to license content from film and TV companies, and sell it to consumers, has developed their own point-to-point requirements, specifications, formats, codec types, bit rates and metadata. As a result, over the last three years we found that the technical servicing work became more complicated and an order of magnitude busier on the digital-file side.

“While the DVD/Blu-ray disc channel is relatively contained – the media is what it is – on the digital side there is a whole lot more diversity and complexity. Important work is being done to create a common industry format for digital media: the Interoperable Master Format, or IMF, developed initially by the Entertainment Technology Center and funded by the film and TV industry. A draft V1.0 specification has now been submitted into SMPTE and should be ratified during the coming months.”

IMF is a positive development that will ensure consistent descriptions across a wide range of digital assets. It includes standardized descriptors for file contents and content-delivery codecs, for example, that form the required metadata labels. Benefits include a single, interchangeable master file format, automated packaging/delivery, minimized storage and simplified post-production transcoding processes. “The idea is to create a standard container and a standard structure behind how you organize essences and related metadata,” Carey states. “Companies can take a packaged file and unpackage it in a structured and repeatable way.

“Since codecs will change, it is essential that we think more about the essence and the metadata – how it is structured, how it is contained and how you package it. Knowing that there will be a new plug-in with a better type of data-compression codec means that content creators can simply change them out whenever a new update comes along.

“We are also attempting, as an industry, to promote file-based delivery to our trading partners – be they broadcasters, telecommunications companies or internet retailers – in a structured way and with limited choices. Frankly, some retailers have a different codec and bit rate that is non-differentiating – it wasn’t making the product better or worse than another, it was just the way they had evolved.”

Conceding that revenue from physical media - DVD and Blu-ray - is down by 45-50% from its peak in 2007, “Digital-file sales are not fully making up for that difference,” Carey says. “With economic pressure on content-creation companies to find ways of securing more revenue more rapidly out of the digital space and not from physical media, there is a move for consumers towards buying from over-the-top and digital-media delivery.”

But Blu-ray players offer a unique opportunity for enhanced digital delivery, Carey considers. “In the early 2000s I was involved with the generation of early specifications for the Blu-ray format. One of the things we did – it was a seminal moment – was to insist that the BD format included an interactive application; we ended up with the Java BD-J set. We also said that Blu-ray players should be internet connected, with specifications that would allow consumers to stream video from the internet.”

While working as a consultant for Related Content Database (RCDb), a company that provides communication software solutions to content owners and service providers, Carey was involved in the development of “a software platform that will let media companies leverage the BD-J and BD-Live infrastructure. Using a next-generation Blu-ray disc, consumers will be able to view a number of on-line offerings, and hence bridge the digital-distribution world through a physical media supply chain that we already have. This, we consider, will get consumers excited about on-demand or downloadable video by way of the Blu-ray experience they already know and like".

And companion metadata can provide contextual relevance that is becoming increasingly important for an enhanced on-line experience. “Other companies that I’m working with,” Carey continues, “are getting very smart and forward-thinking about using metadata as a way to track behaviour and what people are doing when they are viewing video. I have just joined as an advisor to Ooyala, a new online video platform that offers technology for video publishing, video analytics and video monetization. Ooyala has a platform architecture that allows the company to track behaviour and optimize the video experience by securing analytics around pre-rolls, mid-rolls and post-rolls plus pay walls, and much more, together with any number of other monetization methods. It can also undertake multi-variant testing to see which [strategy] produced the highest CPMs.

“Again, at its core RCDb has developed a set of very rich metadata around Hollywood movies – eg, the actor’s name, the brand of shirt he is wearing, his sunglasses, the car he drives – that can also be used as a streaming feed into this on-line experience. For example, we could deliver a sports-car ad for the model that Tom Cruise just zoomed off in. Or the Ray-Ban sunglasses that he just put on. All of that is now fully realizable with the capabilities we have from BD-Live and also from the on-line video-playback platforms.”

Recent changes in monetization and transactional models also underscore the advantages for an immersive viewing experience. “The traditional ownership model seems to be changing, but a number of new digital offerings coming to light – the Netflix and streaming experience – suggest that a subscription model can be successful and offer a nice consumer experience. On the other hand, I like watching current new movies, and you cannot get those on Netflix. So what are my options?

“What we are seeing is a move towards ad-sponsorship and the concept of contextually-relevant metadata. At RCDb we have coined the phrase eVOD – Engagement Video on Demand – the notion being that we can take subscription VOD or advertising-sponsored VOD to the next level as an engagement experience. Because of all this rich metadata we can supply as you watch a movie or a TV program, we are going to be able to tell you who the actors are, deliver pop-up synopses of biographies, what brand of shirts they are wearing, direct you to a local retail store selling those brands, and keep it totally relevant to the program you’re watching.

“What that does is to create a much higher level of engagement on the part of the consumer – and that is at the core of all advertising revenues; you need a highly engaged consumer watching those ads. Consumers seeing the contextual information and limited ads about the products being put in front of them, we predict, will react favourably.

“The ability to stream such rich, contextually-relevant metadata in real time against the playback of a selected video will mean that consumers are far more engaged. We expect to see advertising revenues increasing to a point where there could be real promise in the future about ways to monetize a delivery mechanism that currently is seen as an otherwise bleak economic mode for subscription and ad-revenue strategies versus ownership, which was a much more margin-based business.”

www.rcdb.net
www.ooyala.com

The fact that consumers are bombarded with free video content, both legitimate and pirate, often drives the perception that online content should be free and this represents a major concern for the industry. Changing this perception and establishing a revenue stream is vital for the future health of programme makers around the world, not least the major Hollywood studios.

To begin, let’s look at some of the key statistics that define this overall segment. This year we estimate that consumers in the US will access nearly 500 billion online video views, compared to nearly 300 billion across Europe’s three lead markets; UK, France and Germany. This equates to a staggering 1,500 views per man, woman and child in the US, regardless of age, and close to 1,375 per head of population across the lead European markets.

Digging into the detail shows that almost 50% of the total is accounted for by people watching video on YouTube. In fact, all these video views (including part views) together only amount to just over two hours of online video viewing per week in the US, with European viewers typically spending between 90 and 100 minutes, depending on their country of residence. As a reference point, this compares with about 30 hours per week spent watching TV for the average UK viewer.

Catch-up TV also plays its part in encouraging consumers to access video content online, notably via the BBC iPlayer. Impressive growth in catch-up TV usage in all major markets has adversely impacted the revenue generating possibilities, with those content services offering paid-for online TV programmes and movies not growing as fast as anticipated. Overall, paid-for video content continues to play a very small part in the overall online video viewing activity, although there are signs that this may be changing, particularly in the US.

Subscription services, such as Netflix, are driving much of this growth, and until the recent issues caused by its changing business model and pricing structure, the company was seeing rapid expansion in the numbers of people signing up to use the paid for streaming service.

Total paid for video revenues in the US are projected to reach close to $3 billion this year, a significant increase over last year’s performance. In the European big three, revenues are running at a much lower level with an estimated total of $230 million. The fragmented nature of the European market and the wide-scale availability of online catch-up, has restricted the growth rate although we still expect to see a 50% increase over last year.

To date, the paid-for online video market has been dominated by Apple iTunes. Games consoles have also emerged as important viewing platforms, particularly for third party services such as Netflix and BBC iPlayer. Sony and Microsoft have, at the same time, built their own online video stores.

Looking to the future, there remains considerable potential for online video revenue growth, some from online purchase and rental transactions, but more important will be subscription services and an anticipated expansion in advertising funded services. YouTube has already started to increase its efforts in monetizing videos, with over 25% of videos now carrying advertising and many new initiatives being launched to increase consumer engagement on ad-funded videos.

As interest in viewing premium content on YouTube grows, it is highly likely that a paid-for subscription offering will be added. For many, the main focus for the future is on generating revenues for electronic sell-through (EST) movies and TV shows. While the movie studios would prefer consumers to continue purchasing movies – as they have done with DVD and BD – to date consumers have shown that they are happy with the rental model for accessing video online.

The launch of UltraViolet in the coming months in the US (and probably around this time next year in Europe) is seen as a possible route to stimulating the consumer purchase and ownership of digital content, while also potentially providing a boost to disc-based content sales.

The general idea behind UltraViolet is that consumers purchase a title once, physical or digital, and can then access it across a range of devices owned by that individual, be it TV, PC or mobile/handheld device. Strong industry support for UV among the content community, retailers and the hardware industry (with one or two notable exceptions in each case) and a carefully thought-out business model will help build awareness, but whether or not this will be enough to encourage consumers to want to pay to own content again remains to be seen.

In addition to this we can expect to see a number of key video streaming services, similar to Netflix, emerge over the next couple of years. Apple will be a key challenger, with its launch expected sometime in 2012 in the US, to coincide with the anticipated introduction of a smart TV service.

Amazon has also shown its intentions with the impending launch of its Kindle Fire, supported by an impressive content eco-system spanning video, music, books and games. It has further signalled its intent by offering a one month free trial to its video streaming service. However, it is likely to be more than just an Apple, Amazon and Netflix world, in both Europe and the US, with a number of high profile participants expected to take part in the land-grab and establish a cross-border footprint.

Consumer ownership of a wide range of connectable devices, offering different functionality and screen sizes to meet both a high quality in-home experience at one end of the spectrum and a personal, highly flexible on-the-move experience at the other end, is stimulating both content companies and service providers to step up their activities in trying to better meet consumer wants and needs.

This in turn will continue to drive annual online video revenues towards $10 billion by the second half of this decade, excluding ad funded. Access to free content will continue to play an important role but we can expect to see greater creativity in the ad funded model to ensure that free services continue to attract a growing revenue stream.

www.futuresource-consulting.com

arvato will deliver music and merchandise to consumers internationally and provide product information, returns support and manage order queries via phone and email. The agreement covers CDs, DVDs, vinyl records, headphones and clothing available on more than 70 artist stores including Lady Gaga, The Rolling Stones, Take That, Justin Bieber and Star in the Hood clothing. It also includes the Beats by Dr. Dre headphones series available on the Beats Official European e-commerce store.

“Universal Music is the world’s largest music content company and our job is to ensure that its customers receive the high quality service they expect,” said Markus Schmücker, Managing Director, Supply Chain Solutions, arvato UK & Ireland. “It’s exciting to work with such an innovative company. Universal’s diverse approach to e-commerce fits perfectly with our growth strategy in the UK as we look for new ways to support our clients with innovative and scalable e-commerce solutions.”

www.arvato.co.uk

The audio watermarking technology allows audiences to accurately sync the second screen experience to the television program, both live and on demand. Digital audio watermarking embeds indelible and imperceptible metadata about each show, such as timecode, which is then extracted and interpreted onto the second screen device. This is the first time that digital audio watermarking technology has been deployed commercially as part of a TV companion app in the UK.

Bill Patrizio, CEO, Red Bee Media commented: “We are proud to work with FX UK to deliver this cutting-edge, first of its kind, second screen experience to consumers across the UK. The convergence of mobile and social technological innovation and consumer adoption is effecting dramatic changes to nearly every aspect of the industry. It is now widely acknowledged that multi-tasking in front of the TV is increasingly commonplace and research tells us that 60%1 of people in the UK concurrently watch TV and go online at least two or three times a week.

“This provides us with an opportunity to help our partners to build lasting relationships between their content and consumers by offering a new dimension in engagement that fuels excitement, deepens experiences and extends consumers’ enjoyment without detracting from the main screen.”

The second screen experience will provide audiences with a new, social and immersive way to engage with the TV series including the ability to predict the number of zombie kills in each episode, watch as the action unfolds, and share your results via Facebook or Twitter; select and watch previous zombie kills according to episode, character or weapon; view trailers of upcoming episodes; and see what’s being said about The Walking Dead on Twitter and interact with the Twittersphere. The app will be available free of charge from February 3 and will be available on both iPhones and iPads, while the second season of The Walking Dead will air on February 17.

www.redbeemedia.com

William Higham, Intellect's director of digital media convergence, said: “We are increasingly seeing convergence between the interests and activities of device manufacturers, content creators, technology companies, broadcasters and infrastructure owners. This conference will build on the strong position each organization enjoys within these dynamic communities and will become an agenda setting industry event.”

For many years, both Futuresource and Intellect have run highly successful conferences in this arena and the new event builds on the success of the Futuresource Entertainment Summit and Intellect's Future of Digital Entertainment conference, with the companies joining forces to meet the needs of increasingly converging markets.

Jim Bottoms, co-founder and director, Futuresource Consulting added: “The integration of two highly successful conferences to form a new entertainment summit clearly demonstrates our commitment to providing premier, best-in-class events to the entertainment industry. These are challenging times and this partnership allows us to add even more value for attendees as all elements of the industry come together under one roof to explore the full scale of the business opportunity.”

The organizers expect the event to provide platform for industry leaders, policy makers, entrepreneurs and those driving innovation in digital entertainment and consumer electronics, to share opinions and shape strategy.

www.futuresource-consulting.com
www.intellectuk.org

The Association has long faced concerns from its replicator members over the increasing amount of claims on their disc manufacturing profits. It lists BD4C and One Blu (One Red), which both claim to be holding valid patents for the format and each represent a different group of patent holders. “It is apparent from the questions asked of these companies, that there may be yet further patent holders also having a claim for royalties on Patents in relation to the BD disc from manufacturers producing the BD disc as part of their normal business practice,” Ekus continued.

MPEG LA and AACS also have a claim to fees and royalties and there are industry fears that there are other potential claimants out there and not belonging to any of these groups. The One Blu (One Red) Licensing program has been condemned as being replicator-unfriendly, with a very labour-intensive reporting schemes, shifting further and unnecessary costs to the replicators who face increasingly reduced margins.

The second initiative is also geared at helping reduce replication costs: MTA, together with the Colonial Purchasing USA, has successfully started is a European Purchasing program of polycarbonate. In Q4, six MEDIA-TECH member companies participated in the program that resulted in the price of polycarbonate to drop by approximately 20% across Europe, Ekus told Digital2Disc, quoting MTA co-founder Roland Lacher, who recently commented: “Putting our ego’s aside and working as single voice has true benefits.”

Ekus urges disc producers to allow the Association to speak to the licensing groups and the suppliers of materials together with Colonial Purchasing on their behalf of your company. “This will create new dimensions for the industry and many tangible benefits as being a member of the Association,” he stressed

www.media-tech.net

Established in 1983, Beckmann is a multi rights distributor specializing in high quality programming. They represent independent producers by placing their programming with broadcasters, DVD and home video companies worldwide in more than 110 territories.

Cinram’s manufacturing facility in Ipswich is the largest replication plant in the UK and recently benefited from further investment with the addition of new Blu-ray lines. Mark O’Connor, Cinram’s UK Managing Director commented, “We look forward to building on our relationship with Beckmann and continuing to develop and create new opportunities together.”

www.cinram.com

“We are pleased to continue working together and our long standing relationship reflects our dedication and support to WWE.”

Technicolor will provide replication services in North America for upcoming WWE titles including Stone Cold Steve Austin: The Bottom Line on the Most Popular Superstar of all Time, The Best of King of The Ring and The Best PPV Matches of 2011.

www.technicolor.com

Sharp, which brings patents that One-Blue says are essential to the Blu-ray Disc standard, joins current licensors Cyberlink, Dell, Fujitsu, Hewlett-Packard, Hitachi, JVC Kenwood, LG Electronics, Panasonic, Pioneer, Philips, Samsung, Sony, Taiyo Yuden and Yamaha.

www.one-blue.com

With rapid expansion into new markets by services such as iTunes, Spotify and Deezer, the major international digital music services are now present in 58 countries, compared to only 23 at the start of 2011. Globally, 32% of music industry revenues come from digital sources, far surpassing the film, newspaper and book sectors. Global revenues to record companies grew by an estimated 8% to $5.2 billion in 2011. The number of users paying to subscribe to a music service leapt by 65% in 2011 to 13.4 million worldwide, and there is also strong consumer demand for both single track downloads (up 11% by volume) and digital albums (up 24% by volume).

Moore points out that inroads have been made into the fight against piracy: “Legal services with expanding audiences have reached across the globe and consumer choice has been revolutionized. Meanwhile momentum is building in the fight against piracy as governments and a growing circle of intermediaries engage with our industry.”

One example of success that the report cites is the introduction of the new Hadopi graduated response law in France. That has seen peer-to-peer (P2P) piracy levels decline by 26% , with around two million P2P users stopping the activity since warning notices were first sent out in October 2010, according to IFPI/Nielsen. A newly-published academic study finds evidence that iTunes singles sales in France were 23% higher than they would have been in the absence of Hadopi.

“Any complacency now, however, would be a great mistake,” Moore stressed. “Our digital business is progressing in spite of the environment in which it operates, not because of it. In 2012 the momentum needs to build further. We need legislation from governments with coordinated measures that deal with piracy effectively and in all its forms. We also need more cooperation from online intermediaries such as search engines and advertisers to support the legal digital music business.”

www.ifpi.org

Great opportunities for entertainment companies in digital media lie in the organic development of properties that have the capability to develop naturally over time in many different directions, self-promote, and exploit a passionate audience. Endemol has adopted that exact approach with the launch of its groundbreaking mobile game that centres around the new sport of extreme arm wrestling - XARM F.U.

The game, which was introduced in November last year, is designed to be highly realistic and closely mirror the sport, explains Tina Hoover, VP , Social Media & Interactivity at Endemol USA. It draws from videos of actual XARM fights, and characters in the game represent real fighters in the XARM league. The game is squarely aimed at a “hardcore audience of males 18-34 that is more intense about games, and is more willing to spend time and money on games” that meet their interests, she explains. Within the first two weeks, “65,000 people” had played the game.

Hoover notes that Endemol hasn’t simply created a new game with XARM F.U.- it is essentially “creating a whole new sport” through a game. In fact, it’s no coincidence that Endemol is a part owner of the XARM sports league. In this context, Endemol, in partnership with the XARM league, has plans to “launch live XARM events,” and is assessing whether to “televise the fights” or offer them on a “VOD basis via the mobile game,” reports Hoover. The company might, for example, “charge players more for live streams” of the fights or “less for archived versions” of the bouts, she observes.

Hoover points out that this special strategy used with the mobile game illustrates the different strategy Endemol is typically taking with its social media and app properties. XARM F.U. is being offered on a “fremium basis,” allowing players to “play for free” while they’re also “encouraged to spend money” on virtual goods and extra elements, such as “fight videos, more advanced fight moves, stat boosts, and fight customizations,” she explains. Players are charged, for example, 50 cents to “buy a video of one fight round” lasting 1 minute. A key reason Endemol opted to offer XARM F.U. as a mobile game, says Hoover, is that such “hardcore” games typically generate “higher monetization rates”.

Players will also have an opportunity to shape the game. In fact, “early players of the game will have a big impact on the XARM sport and live events,” according to Hoover. Another distinctive element about the game is that it will be highly “stat driven”- real time data about such elements as the fighters’ blood pressure, pulse, punch and kick force, energy, and stamina “will feed into the game and affect the game stats,” adds Hoover.

“This is the first game we know of which will be affected by the stats in a real sport,” she claims. And conversely, the game data will also help “determine aspects of the sport,” for example, by establishing the “most popular fighters” in the game, she says.

The XARM F.U. game is creating key new synergies between real and virtual experiences that have clear implications for TV and interactive producers.

www.endemol.com

“Polar transformed how media companies deliver content to smartphones and tablets by providing a turnkey, cloud-based software platform for the rapid deployment of feature-rich native applications”, said Kunal Gupta, Chief Executive Officer, Polar Mobile. “We are thrilled to have the backing of Georgian and now it is helping to accelerate the launch of our next-generation software platform, MediaEverywhere.”

MediaEverywhere is an HTML5-based solution to distribute media content in a multi-device environment, including smartphones, tablets and desktops. It will include support for both app-centric and browser-based media consumption and enable Polar’s media customers to create, design and manage custom user experiences in-house. MediaEverywhere, added Gupta, will decrease customers’ development time and increase their opportunity to monetize their content.

“The complexity of new platforms and ever-changing business models introduces new opportunities that media companies can benefit from with Polar’s help,” said Justin LaFayette, Managing Director, Georgian Partners. “We are excited about Polar’s ability to scale globally and their vision for leveraging applied analytics to enhance engagement and drive monetization of media.”

MediaEverywhere will use audience intelligence to increase engagement and monetization opportunities for customers. “Digital distribution and monetization is a top priority for media companies around the world and working with Polar has enabled us to accelerate and scale our digital strategy in a rapidly changing world,” says Albert Read, Deputy Managing Director, Condé Nast. “The Polar team have been great to work with and we look forward to continuing our relationship.”

www.polarmobile.com

Mitsubishi will outsource production to Taiwanese and Indian makers, the company is reported as saying. This will lead to Taiyo Yuden as the sole Japanese manufacturer of DVDs, while there are four other Blu-ray manufacturers who may or may not decide that the Mitsubishi move is the right one and follow suit.

According to the Japan Recording-Media Industries Association, says the report, global demand for DVDs, which peaked in fiscal 2007 at about 6 billion units, and has steadily declined since then. Sales of DVDs are forecast to drop to 3.7 billion units in fiscal 2013. In the meantime, the retail price for DVDs virtually halved between 2006 and 2011. Blu-ray sales have not made up for the decline, says Asahi Shimbun. In FY2010, Japan accounted for 95% of the global Blu-ray sales amounting to 100 millions (about 20% of the sales of DVD).

www.mitsubishi-hd.co.jp

David Joseph, Chairman and CEO of Universal Music UK said, “HMV is a vital part of the UK music industry and we are delighted that the support of the film studios and music companies is helping to secure its future. We look forward to working closely with HMV in the years ahead.”

According to the official HMV statement, if current trading patterns continue, the Group now expects, on the basis of its current plans, to be able to reduce its debt by approximately 50% over the next three years. For the year to 30 April 2012, HMV expects net debt to be £175-180m and, in expectation of continuing challenging conditions, believes it is now likely to deliver a slightly larger loss of around £10m for the full year.

“Today’s announcement is enormously welcome,” Chief Executive Simon Fox (pictured) said at the time. “These developments represent a material improvement in our financial position relative to the statement we made at the time of our Interim results. The new relationship with our suppliers and the support of our banks will now enable HMV to wholeheartedly focus all of its energies - working in close partnership with its suppliers, on serving the changing needs of its customers ever more effectively.

"As a key part of this we remain committed to improving our specialist ranging and merchandizing of music and DVD whilst also continuing to grow our sales in portable technology and further developing our online and digital offers.”

www.hmvgroup.com

As demand for connected TVs gains momentum, major TV manufacturers are responding by making IP connectivity a standard feature in 60% to 80% of their product portfolio. In addition, embedded Wi-Fi is expected to drive usage moving forwards and many premium models now incorporate this feature enabling consumers to connect and use with ease.

Looking to the wider market, as developed territories head towards saturation the world’s emerging markets including Brazil and India, witnessing 40% and 86% growth respectively, look set to be driving the global consumer TV industry.

Market development will be primarily driven by LED TV shipments, accounting for 90% of units to be shipped globally by 2015. Other technologies including LCD, PDP and CRT are expected to decline throughout the forecast period, while OLED currently used in smartphone technology, will gain traction in TV development by 2015. Market leaders Samsung and LG are already showcasing this technology with launches anticipated in 2012.

Increased product availability and falling price premiums have contributed to a growth in global shipments of 3DTVs. Shipments of 16 million units are expected for 2011 once final numbers are in, with anticipated growth throughout the forecast period accounting for 50% of the market in 2015.

One of the key reasons behind the growth of 3DTVs is that consumers are purchasing the 3D function by default when looking to upgrade to higher-end models, mainly as they are unaware of the in-built 3D capability at the time of purchase.

www.futuresource-consulting.com

Kurie’s message: “You need to make your content discoverable - metadata offers the best ROI.” Content doesn’t necessarily have to be free, he stressed - if people can find your content they are willing to pay for it. The comedian Louis CK offered the video of his Live at the Beacon Theater gig from his website for a fee of $5. No DRM, no restrictions - pay $5 and do what you like with it. “Over one million people bought it.” Leverage social media to attract passionate and ‘tribal’ consumers, and embrace direct monetization.

The panel discussion on the growth of VOD concurred, with panellists agreeing” “Content discovery the next big thing and a huge opportunity for all of us.” Multi-screen access is growing - consumers demand content when and where they want it. “A screen is just a screen,” said Charles Muirhead of Rightster. “It’s up to the technology providers to make it work.” Social TV is going to be the ‘way to go’ was the opinion of George Meek of Kaltura.

The panel discussion on delivering results through social media managed to avoid the ‘last-session-of-the-day’ empty seat syndrome, with an audience keen to hear the panellists’ insights. Social media could be a hugely successful marketing tool, said Denise Parkinson of Yahoo! “When you have someone like Vin Diesel with five million fans on Facebook, he can drive traffic to like trailers of movies and then we can show our major studio clients that there is a huge interest in a title before it is released.”

Localization is important, so social media needs to be monitored carefully and “Research, research, research,” was the message of moderator Dana Al Salem of FanShake. She cited an example of the Middle East and North Africa, where there are two mobile phones per person. “Even if someone can’t afford to call or text, they still have two phones.” So if you are looking at growing a market in that region, looking at mobile is the way to go, she said. That sentiment was echoed by Henning Linblad, VP of Marketing at the WTA (women's tennis association), who said that what fans in China want is very different from what US or UK fans want. Facebook needs to be treated almost as another country in itself.

www.dcm-eu.com

Among the tips he shared for success were: “It’s never finished - get it out there”, and: “Don’t be too high brow to chase revenue.” The devoted fans, he said, were prepared to buy anything, “Even things like coffins that we never thought originally would be worth putting into the store. So if they want coffins, give them coffins.”

David Perry (pictured) of Gaikai made a bit hit with the audience as he discussed the failings of the big games companies to keep up with digital distribution. “There is DRM. There is incompatibility.” He pointed out the negative effect that the HD DVD/Blu-ray format war had on the entertainment sector, “But the games industry accepts format wars.”

The games sector has been marked by stair steps of change, rather than gradual evolution, he said. “Digital distribution is inevitable,” he stressed, “and free to play is important to our future.” Social sharing has been virtually unreachable by the big game names, because they make access to games difficult and/or expensive. He demonstrated the 43-click step and 45 minutes it took to load a demo of one of the big name games. “People bore easily and gamers just want a quick taste.” The top method of finding new games was demos, and the top way that gamers think games should be advertised is with in-store kiosks and demos.

Cloud delivery of games is the way forward, Perry said, in the spirit of removing all hurdles between players and games and bringing the game to the gamer. As things stand, was Perry’s message, video games can never be a number one form of entertainment - but if gaming is made more accessible then they might. He cited the example of Best Buy selling consoles at a price that included someone to home-deliver and help set it up. It shouldn’t be that complicated, was his strong message, and with cloud delivery, “We don’t have to explain how it all works, it just needs to work.” A bonus: zero piracy problems on servers.

Nicholas Lovell of Gamesbrief provided some insights into social games and pricing: “Free has been hugely successful.” In the physical world, the traditional pricing was a fixed price that meant it was too expensive for some people and other people were paying less than they would have been willing to pay. He cited the example of a Nine Inch Nails album, which was made available for free download and then had levels of pricing going up to $300 for a 200,000 limited edition signed album. “They sold out in 30 hours.” Lovell’s point: “In the digital world can be more granular. Allow users to choose how much they will spend on your product and your revenues will go up.”

www.dcm-eu.com

David Naylor of Field Fisher Waterhouse was the moderator, and first up was Clive Dickens, COO of Absolute Radio. His pitch was for RADIOsync - “A new product proposition to make the discovery of online radio easier through metadata.”

Dickens quoted some figures: 91% of people in the UK listen to 21 hours of radio per week (“radio is very much in rude health”). However, though 80% of the people in the UK own internet enabled devices, and there are around 40k radio stations online, only 10% of people have listened to the radio online. This, he said, was largely down to discovery, or lack of: data, he declared, is the new oil of our economy.

RADIOsync would help people discover radio via their own choice of music (with permission), and via friends' recommendations, as with Facebook. “This is becoming a vital part of the online world with 20% of online time in the US now on Facebook.”

Paul Westhorpe, formerly of PRISA, also went down a content discovery route with his pitch of ‘The Good Life’ - an online service to help people find ”cool, new, local and global authentic experiences".

Content is critical to this, he said: both internal content with images, and video, all going into what he called a “content federation system”, along with external content from business partners and user input. The experiences could be shown based on user preferences, and Westhorpe used the example of visiting Madid, where the user could view maps based around a certain experience, such as a tapas crawl, with recipes for patatas bravas, or a cultural experience, where they could also watch a video on how to flamenco dance

Matteo Berlucchi, CEO of book reader service Anobii, got up to discuss what he called the development of ‘moral DRM’ and caught the audience’s attention with a Victorian advertisement for ‘asthma cigarettes’. “Piracy is a very large problem for music and music and books (though it is still early for that market,” he declared. “Dr Batty’s asthma cigarettes clearly didn't work, and so DRM may not cure piracy.”

The relatively new e-book sector has been learning from music, he said - EMI dropped DRM in 2007 and in January 2008 Sony became the last to drop it.

“An interesting side effect of DRM,” he said, quoting Time magazine, was that it “helped Apple achieve a quasi-monopoly” and the only real effect of DRM is that it “harms the good guys”. DRM removal didn’t hurt the music publishers, he said, though it did squeeze the retailers.

You can’t prevent sharing, he stressed, so DRM should be Digital Rights Morality, he went on to say. Publishers could provide DRM-free books that were watermarked with the buyer’s personal information (name and address for instance) on each page. That would install an ‘honour’ system of not misusing the publication.

“Interoperability of books would open the market,” he stressed. “Other publishers could sell into Kindle and vice versa.” Education is key to preventing piracy of content, including books.

Second place was a virtual tie between Dickens and Westhorpe, but Matteo Berlucchi the clear winner.

www.dcm-eu.com

In-app purchases will rise to account for 64% of total market revenue in 2015, up from 39% in 2011. Revenue from in-app purchases will increase to $5.6 billion in 2015, up from $970 million in 2011.

“In 2012, it will become increasingly difficult for app stores and developers to justify charging an upfront fee for their products when faced with competition from a plethora of free content,” added Kent. “Instead, the apps industry must fully embrace the freemium model and monetize content through in-app purchases.”

The ‘freemium’ business model of offering apps for free, then charging for in-app content, represents the fastest-growing segment of the global smartphone apps business, and will soon dominate the market. By the end of the third quarter of 2011, free-to-download applications already represented 45% of the top-grossing US iPhone applications as well as 31% of the highest-earning US Android market applications.

IHS Screen Digest calculates that 68% of the top-grossing US applications featured some form of additional content or functionality available via an in-app purchase. “Games pioneered the in-app business model,” Kent observed. “Now the approach has proven so successful, companies building other types of smartphone app must adopt this strategy if they are to maximize their mobile app revenues.”

www.isuppli.com

Earlier in the day, a one on one interview with Nick Bell of News International shed some light on the media giant’s digital strategy, and Bismarck Lepe of networking drinks sponsor Ooyala shared some statistics on video from the company’s video index. Among the facts and figures he shared was the fact that non-PC video consumption is growing rapidly and will continue, and that the growth rate of connected TV is faster than tablets and mobiles. “Every single experience is different for every single user in the connected world consumption so the right strategy for right device for each user is very important,” he stressed.

That sentiment was echoed later in the day, when Maria Ingold of FilmFlex doubled up as a speaker on both the DAM (digital asset management) and DRM (digital rights management) sessions. “People want the latest premium content - now!” she pointed out, which is what FilmFlex aims to provide. “Rights windows are collapsing down to day and date, and people want a number of things: ease of payment; to watch on TV; to watch on other devices at home. And to take it with them when they travel.” What’s worth selling is worth managing, she said in the context of DAM. And, regarding DRM, Ingold pointed out, “We’re involved in some of the most premium content available so studios want to protect it. Content has to be licensed per territory per partner per device. We have rights negotiations about all of them, so that’s a lot to think about.”

In a quick-fire comment on the best and worst aspect of DRM, some of the answers were: best - being invisible; worst - being visible (Trevor Albery, Director of Ant-Piracy, Warner Bros). Worst - the inflexible way it has been implemented in the past (Paul Gathercole of Universal Music); and worst - the fact that it can be hacked so it needs to be dynamically updated and is not a one-time, one-off solution (Christopher Schouten of Irdeto).

www.dcm-eu.com

First up was Lee Morgenroth of leemail.me - ‘a PO Box for your email’. The service provides a unique and secure email address for all those websites we want to use, and which want an email address. There is a facility to turn the email on and off, and should, said Morgenroth, make it easier for people to give companies an email address. “Look at PayPal,” he said. “They are a trusted mediator for payments. We do the same thing for contact details.”

Fans for brands was the mantra of the next startup, Gruvi.tv, represented by James Hobbis. “Spotify attracted one million followers in the US with the Facebook Ticker,” he pointed out. “We can do that for any brand.” The company works with movie companies primarily, helping fans to discover, explore and share content. “The trouble with social media is that people don’t want their personal conversations interrupted. We join that conversation; we don’t interrupt it.” The advantage for movie studios was huge, he said, allowing them to market early to the right people with the appropriate use of shared trailers and recommendations.

Music with a view was the next pitch, as Stephen O’Regan of BalconyTV explained the concept that started on a balcony in Dublin. “It’s the rock ‘n’ roll part of digital content monetization,” he said. “Three friends started with the crazy idea of doing a TV show from our balcony. We wanted a new show every day and invited bands to perform so we could put the show on MySpace. Soon we were inundated by requests.” One of the unknown bands who performed for the first time on that Dubin balcony was The Script, who were to be seen two years later on the David Letterman show.

Last up to the podium was Jessica Butcher of Blippar. To Blipp, she said, was the act of instantly converting anything in the real world into an interactive wow experience. who worked on “Converting an old push into a realtime proactively pulled experience.” With the use of image recognition, an app can turn even the most everyday object into interactive fun. “It is content delivery to the user's hand, interactively and proactively requested.” The cumulative and rapidly growing audience has resulted in two million user Blipps, 50 client campaigns, and 350,000 users already. The dead heat was between BalconyTV and Blippar, with Blippar winning in the best of three votes by the judges. 

www.dcm-eu.com

Disruption and flexibility are key to staying in business in today’s changing digital landscape, and creativity shouldn’t be stifled, was the consensus. According to panellist MB Christie, Online Project Management Director, ft.com: “We have to keep disrupting our own selves in order to sustain growth.”

John Clark, Managing Director, UK for SEGA, combined the view of traditional packaged goods, with digital distribution, and his belief was that the paradigm shift has been from linear consumption to multiple devices. “Games companies for the first time are trying to catch up with the consumer,” he said. SEGA has acquired UK studios and the innovators in the company need to be supported to keep up with technology and continue creativity.

Peter Briffett, of LivingSocial, was very much of the view that creative elements need the corporate and financial backing of large companies but should very much be “separate from the mother ship”. He spoke from the point of view of someone in the enviable position of having sold a company to Microsoft but still being allowed to keep some autonomy.” Particularly good, he pointed out, as “Microsoft has a great history of killing anything they acquire but they are getting better at that.” Harking back to Naylor’s opening comment, he added: “Kodak never understood the digital space and didn’t innovate there.”

The conversation also turned to failure and how to cope with that. According to Christie, a standard question for her with interviews was “What was your biggest mistake and how did you recover from it?” - Her company, she added, believed in ‘test, test, test’ but still sometimes that wasn’t a guarantee of success. “Sometimes we release a great product but the public didn’t want it. If works it’s not a failure in itself,” she stressed, giving the example of book publishing where some authors spend years getting a book publlished. “Then a later book becomes a bestseller so their first book that wasn’t well received succeeds. Persistence and optimism are crucial.”

www.dcm-eu.com

"But not everyone has access to the internet, nor are they necessarily tech-savvy enough to stream talks when they do. There are times when you need to watch talks off-line. And our DVDs – think of them as 'mix tapes' of talks – are a simple alternative: inexpensive, highly personalized and easy to play on any DVD player."

Each disc holds up to six talks, each with the option to order with subtitles in up to 32 languages.  DVDs can be shipped to and watched in any region of the world.  

The annual TED Conference invites the world's leading thinkers and doers to speak for 18 minutes. Their talks are then made available, free, at TED.com. TED speakers have included Bill Gates, Al Gore, Jane Goodall, Elizabeth Gilbert, Sir Richard Branson, Nandan Nilekani, Philippe Starck, Ngozi Okonjo-Iweala, Isabel Allende and former UK Prime Minister Gordon Brown.

www.TED.com

Current licensors include Cyberlink, Dell, Hewlett-Packard, Hitachi, JVC Kenwood, LG Electronics, Panasonic, Pioneer, Philips, Samsung, Sony and Yamaha.

"Taiyo Yuden is pleased and proud to join the One-Blue product licensing program as a licensor, in consequence of our experience of the optical disk technologies over many years," said Iwao Fujikawa, General Manager of Intellectual Property Dept. of TAIYO YUDEN.

www.one-blue.com

Yaz Yaacob, Vice President, Technical Operations of Testronic Labs, stated, “Testronic sees the RRT as incredibly important to the industry. This event goes directly to address emerging formats and further strengthens cross-industry relationships in the Blu-ray ecosystem. The opportunity for face to face collaboration between studios, vendors and manufacturers is a powerful one, and we are more than proud to facilitate it.”

The Testronic RRT is designed to heighten the existing collaboration between studios and Blu-ray vendors and manufacturers, which have proven to be beneficial for production workflows while strengthening the working relationship amongst the participants.

www.testroniclabs.com

However, that was not to say that other mobile devices should be overlooked, Gupta pointed out: “The time spent on tablets is far greater but the number of times smartphones are used is greater.”

Touch is an important element of the tablet experience, panellists agreed, making the user experience simpler and increasing engagement. Also important for tablets is the fact that they are easier to share, added Rock: They are not as private as a phone. Tablets are more used in the home and they will come into their own massively with 4G.”

One key factor of tablets, said Gupta, is that it is much more of a paid content model. “A download not worth anything if no-one is buying anything. People are more aggressive with monetization on tablets than PC or smartphones.” In the future, he said, we will see optimized content streams for tablet. “There should be more long form content - the tablet is more of a lean back experience. PCs require more photos and bandwidth hungry content.”

Other points that were mooted were that the one to many TV broadcast model will evolve to a one to one as content owners learn ways to stay with the consumer and keep providing the content they want on the different devices they use throughout the day.

www.dcm-eu.com

The two different perspectives were premium content that needs to be secure (Sky), and that which the content owners want as many people as possible to access (Yamgo), but there was some agreement on the hot topic of Social TV aired by Sidebottom. “We are about to invest a lot into connected devices,” said Mullins, “Having more social interaction and more engaging content is the way to go.”

Gibbs agreed cautiously: “Statistics show that a lot of people have connected TVs - but do they really use them? Yes, for reality TV, there is a lot of activity, but it is important to pick shows that will work. Social TV is an important part but it is just one tool to engage the customer. It’s only worth doing if it makes watching TV better.”

True, Mullins agreed: “Social TV is growing but it is not as easy as everyone thinks. There is an art to making it work properly.”

One company that claims to make social work properly is music social network Flowd, marketing director Wilhelm Taht explained. “Not all fans are created equal,” he stressed. “Super fans matter.” By giving those super fans something special it encourages loyalty - and helps with revenue. By turning up early to concerts or signing into Flowd, fans can meet the bands, receive free posters, or otherwise be rewarded. In one instance 31% spent additional money on merchandise, Taht pointed out.

You have to know who fans are to reward them, was the message: “Funny that the music industry hadn't woken up to location-based marketing before.” Or, Taht said, quoting Mark Zuckerberg: “If I had to guess social commerce is the next area to really blow up up.”

www.dcm-eu.com

"People are spending more time on mobile devices and less time on traditional methods of content consumption compared to a year ago," said Laws. In particular, people now prefer to consume news on small device, which provide more flexibility - mobile devices are now the reading platform of choice for the bathroom and "longer visits" he pointed out. Most people are now disappointed if a news website not optimized for mobile.

Lambert ran through some figures on how people treat their TV viewing - for instance, in the US 98 million people multitask on their mobile while they are watching TV. A breakdown of what the 100+ million people who watched last year’s Super Bowl did during the ad breaks showed a spike of Yahoo! front page traffic, with search queries relating to TV ads during Super Bowl significantly increasing. “Commercial time equals mobile prime time,” he stated. “Mobile web traffic during live TV events is strongly related to ad breaks.” That means, he asserted: “If companies want to take advantage of those viewing figures, they need to not just advertise but also also make sure that their website will support searches and provide sufficient information for those viewers searching in the ad breaks.”

www.dcm-eu.com

The review was commissioned last year by UK Culture Minister Ed Vaizey and looked at how to ensure film is a sector which plays a full role in driving growth. The audience was been placed at the heart of the review, and the report’s recommendations aim to maximize audience access to films of every kind.

“This review highlights the things that the BFI, Government and industry can do to ensure that we continue to build on recent successes,” said Lord Smith. “British film is in prime position to make a major contribution to the growth of the UK’s economy, to the development of attractive and fulfilling careers for young people, and to the creation of job opportunities across the country.”

Lavinia Carey, Director General of the British Video Association (BVA), responds to the report by saying: “The Review is an important first step in assuring the future of the British film industry. If the industry is to continue to play its role in the country’s cultural life it is essential that the Government acts to create the right conditions such as encouraging the roll out of superfast broadband and investing in British skills.

“Most importantly, it is imperative that the Government’s current review of copyright does not weaken copyright law and inadvertently introduce uncertainty in a market where raising investment for British productions is already a challenge for independent film makers by reducing the value of video entertainment – so important to the financial eco-system of our film industry.

“British films dominated the UK video entertainment chart in 2011. Without being able to rely on this income, those films would not have been made. BVA research shows that on average 47% of the revenue generated for film in the UK comes from video entertainment. We therefore welcome Lord Smith’s recommendations to ensure the sustainability of the UK’s film industry.”

www.culture.gov.uk/publications

According to the DEG, the recovery continues to be driven by high margin products that are gaining a foothold among consumers, such as HDTVs, Blu-ray Disc players and discs, as well as the expanding offerings through electronic sell-through (EST) and video on demand (VOD) services. These these higher margin businesses showed the strongest growth rates.

Some highlights for the year included

• Blu-ray Disc and EST continued to perform remarkably well with consumer spending on Blu-ray sell-through up 20% and EST up 9% for the year. Additionally, consumer spending on VOD was up 7%.
• Blu-ray Disc has evolved to become the standard for home entertainment with both new release and catalog sales seeing growth of 20% in 2011.
• Studios launched their first Blu-ray Disc titles with UltraViolet in 2011, with the DEG estimating that more than 100 UltraViolet titles will be available in 2012. 
• Blu-ray penetration continues to grow rapidly, increasing 38% last year (including BD set-tops, PS3s and HTiBs) to a total household penetration of all Blu-ray compatible devices now at nearly 40 million US homes.

Consumers enhanced their home viewing experience by purchasing more than 27 million HDTVs during 2011. HDTV penetration is now at more than 74.5 million US households. Consumers continue to show a keen interest in 3D TV, with a dramatic year-over-year increase in titles and unit sales of 3D Blu-ray Discs. Available 3D Blu-ray Disc titles more than tripled in 2011 compared to 2010, growing from 20 to 65, while unit sales increased more than six times in the same period. Some of the major movies now on 3D Blu-ray disc include Avatar, The Lion King, Cars 2, and Pirates of the Caribbean: On Stranger Tides. The bestselling Blu-ray Disc titles of the year hit major milestones with five titles selling in excess of two million discs.

www.degonline.org

“Our team has spent the last several years relentlessly innovating the technology engine that drives ConnecTV’s second-screen experience. Civolution’s ease of integration and proven track record in fingerprinting technologies make them the clear integration partner to bring our platform to life.”

ConnecTV’s second screen global social TV platform uses Civolution’s audio fingerprinting solution to enable consumers to automatically sync with their favorite TV programs and companion content. Civolution’s technology has been integrated with ConnecTV’s own proprietary content recognition algorithms to provide relevant and accurate synchronization to TV programs, allowing networks and content providers to deliver second-screen services without the need for additional production resources.

“Having been at the forefront of content watermarking and fingerprinting for many years, we continue to be inspired by innovative new applications of our technologies,” added Civolution CEO Alex Terpstra.

www.civolution.com
www.connectv.com

Third-party developers can now use Rovi Data as an easy way to add Tweets directly from Verified Accounts into their entertainment apps, websites, products, and services. In addition, Twitter Verified Accounts will also be featured in a number of Rovi white-label solutions that are helping power advanced entertainment search, discovery, and enjoyment on consumer electronics devices.

“Twitter gives fans a look behind the velvet rope, and provides direct access to the actors and artists they love,” said Glenn Otis Brown, Twitter director of media business development. “Our collaboration with Rovi will extend this experience to a new set of entertainment products and services, giving consumers more ways to interact with their favorite shows and stars.”

www.rovicorp.com

“Why text or email your friends to talk about your favorite programs after they've aired when you could be sharing the experience with real-time interactivity from anywhere across the globe? “As the plot of your favorite drama unfolds, the joke of your favorite SNL character plays, or even the last second shot of your favorite team swishes the net, we're giving you the opportunity to connect your friends to your moments as they’re actually occurring. This is the evolution of one of our greatest inventions, the television. And, we no longer have to crowd around the same one to experience it together."

Initial channels on Myspace TV will be music-focused, but is expected to expand beyond music. Audiences will not only be able to view their favorite television programs, but chat about what they’re viewing while they’re viewing it and invite friends to watch with them virtually. A companion app will be available on tablets and smartphones.

"Myspace was the first successful social network because it allowed individuals to share their interests, listen to music, express their creativity and connect around the things they love,” added Myspace CEO Tim Vanderhook. “Historically, TV has been a shared experience, as people gathered together to watch their favorite programs. Our belief was that we could enhance the TV experience by increasing viewers’ ability to connect to both content and each other. By partnering with Panasonic, we’re bringing together the content that people love and a social experience in one service: Myspace TV.”

Launching in the first half of 2012, Myspace TV’s over-the-top television service will be offered across the Panasonic VIERA Connect platform, which offers access to Internet-based video-on-demand content and applications.

“Year after year, Panasonic’s VIERA Connect Smart VIERA TV platform has continued to expand rapidly but with a singular focus to deliver to our consumers an extremely robust and interactive connected TV experience that can be customized and enjoyed on their large-screen HDTVs,” said Joseph Taylor, Chairman & CEO, Panasonic Corporation of North America. “We are proud to partner with the new Myspace on the debut of Myspace TV on our VIERA Connect Smart TV platform. By partnering with a brand like Myspace on the VIERA Connect Smart TV platform, we’re taking connected TV to a whole new level of engaging, interactive experiences for consumers.

http://www.myspace.com
www.panasonic.com

The agreement, says Accedo, gives it and its customers a key enabling technology as they develop new social TV, interactive advertising, and other applications for the fast emerging - and converging - smart TV and smart device markets. In addition, it helps to strengthen Audible Magic’s position as a global leader in ACR.

“Accedo is working with some of the largest TV manufacturers, TV operators and TV channels in more than 30 markets globally,” added Audible Magic CEO Vance Ikezoye. “They are preferred vendor of some of the most highly respected CE brands and TV platforms in the world, and we are pleased to be working with Accedo on solutions that require ACR. This technology is an important piece of the smart TV puzzle. It helps viewers have a more fully connected and emotionally satisfying experience. It also helps companies such as CE manufacturers, content providers, broadcasters, and advertisers tap into major new revenue streams.”

For application developers and TV solution providers, today’s announcement also reflects a growing consensus worldwide of the need for ACR technology in a more tightly and closely connected - a more social - living room environment. For virtually every social TV, interactive advertising, or related application to fully succeed, more people close to these developments now contend, the ability of multiple devices to recognize aired content - even on live, never-before-shown programs - in real time is essential.

www.accedo.tv
www.audiblemagic.com

The THX Media Director technology transforms digital media into smart content, enabling televisions and other home theater devices to automatically select the most appropriate audio and video settings when playing DVDs, Blu-ray discs and other digital content, simplifying the home entertainment experience while preserving artistic intent. In the past, BluFocus has teamed with THX to ensure THX quality standards are achieved for THX Certified Blu-ray titles, as well as to build an ecosystem of services to address the technical challenges of 3D post-production.

“Our partnership with BluFocus to enhance the workflow for THX Media Director technology complements the work THX is doing with leading CE manufacturers to ensure optimal playback of picture and sound in the home, enhancing the end-user’s enjoyment of their digital entertainment content,” added Dean.

BluFocus is among the first commercial facilities to create the smart content that “talks” to Blu-ray players, set-top boxes, AVRs and HD displays, which enables the devices to automatically select the proper playback settings.  As a quality assurance and certification leader, BluFocus is also the first official QC facility for Media Director enabled content, ensuring that the information has been implemented on the discs correctly.

“It’s great to be working with THX on this venture, expanding on our existing, rewarding relationship,” said Paulette Pantoja, BluFocus CEO and Founder. “Their interest in creating exciting technologies that simplify and enhance the consumer experience goes hand-in-hand with our mission of ensuring that the consumer only has the best quality products to choose from when spending their hard-earned money.  THX Media Director is an innovative contribution to home entertainment, and we look forward to helping THX nurture its success.”

www.thx.com
www.blufocus.com

The audience of registered users is expected to grow exponentially in the year ahead, as Hollywood studios plan to dramatically expand the scope and scale of UltraViolet. Collectively, Sony Pictures Home Entertainment, Universal Studios Home Entertainment and Warner Bros Home Entertainment Group will release hundreds of additional UltraViolet-enabled titles in 2012, including most new releases in 2012, catalog and TV titles.

“The Hollywood studios have made a major commitment to expanding the list of UltraViolet titles coming to market in the year ahead,” said Teitell. “We believe 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.”

Major device manufacturers have also started to introduce products that work with UltraViolet in several ways. Samsung announced that its Smart Blu-ray players will stream movies and TV shows stored in the cloud through a new Flixster application coming this year. In addition, these players will offer a ‘Disc to Digital’ feature, developed in conjunction with Rovi, that will allow consumers to add their existing DVDs and Blu-rays from participating studios to their UltraViolet digital libraries, making them accessible via download and streaming on a wide range of devices.

In the first half of 2012, DECE will introduce a Common File Format for downloads, making download functionality consistent across all UltraViolet retailers. This will further increase consumer convenience by making repeated downloads of different file types unnecessary, even when using different brands of UltraViolet-compatible media player apps or devices. “The collaboration among leading multi-industry companies in developing UltraViolet has been exceptional,” Teitell adde. “As the roll-out expands globally, additional geographic launches will benefit from the experience and data we are gathering through our US and UK deployments.”

www.uvvu.com

“There will be a number of films in collectible book style packaging with memorabilia,” added Meyer. “It's an area for us to frankly show off and give the audience something they've never seen before.”

The restorations, which will be released throughout the studio's year-long centennial celebration, took three to six months each and cost $250,000 to $600,000 per title, Universal SVP, Technical Operations Michael Daruty told THR and others at a sneak preview of the results.

The restoration effort, he told reporters, was not just about marketability and whether they would sell enough DVDs, but a commitment by the company to devote funding to try to preserve and restore the legacy of the company. Digital2Disc will be providing a 100-year retrospective of the studio in its May issue - watch this space.

“This is a proud moment for all of us who’ve had the privilege of working at Universal Pictures,” added Meyer. “Our centennial is designed to bring special memories back to longtime movie lovers and fans, and to engage new audiences with our extraordinary library of films for the first time. Our goal, a hundred years later, is to preserve, restore, and continue the iconic legacy of this studio for generations to come.”

www.universalstudios.com

The team is looking forward to the new challenge, Hosp added, with the demand for Blu-ray Discs increasing substantially over the previous year. “Since we regard ourselves as a general contractor for independents in the media sector and have already been offering Blu-ray authoring services for over a year, it was important for us to have our own Blu-ray Disc manufacturing operations if only to bolster the flexibility of our customer support.”

kdg has also brought on board Michael Gutowski, the previous owner and managing director of Infodisc Technology GmbH, to build up and develop the sales side of the Blu-ray production operations. Gutowski had been instrumental in preparing the ground for Blu-ray in the independent sector, said Hosp.

“He is passionate about sales and marketing, and a long-standing partner. We’re delighted that we will be working closely together on Blu-ray projects in future. In addition to our clear commitment to the media sector, we also share the same pioneering spirit. kdg was, after all, one of the first CD plants in Europe, and Michael Gutowski demonstrably the first independent BD supplier in Europe.”

In addition to its sales and distribution centres in Elbigenalp and Paris, as well as a sales office in Merano, Italy, the kdg group is also about to open a sales office in Baden-Baden, Germany.

www.kdg-mt.com

“The focus of our combined capabilities is to expand our digital delivery to all devices, from the living room television to the smart phone, or tablet.”

The apps includes a branded interface, an online digital locker for easy content access, digital rights management, ‘watch later’ capabilities, in-app promotions, leading-edge second screen technology, and a rich social media experience that heightens the viewer’s connection to content.

"Mobovivo's platform and team perfectly complement the strong creative strengths of 1K Studios and the backend digital supply chain management solutions of Cinram," said Trevor Doerksen, founder and CEO of Mobovivo. "Our partnership will deliver game-changing services and technology built on extensive industry knowledge and deep relationships with television networks and Hollywood studios."

www.cinram.com

Schmitt commented: “Sky has a strong track record of innovation, and we are delighted to partner with them to deliver zeebox’s social TV vision to millions of Sky homes. Thanks to Sky’s backing we now also have the resources and expertise to set our sights firmly on international expansion alongside further innovation here in the UK and Ireland.”

The zeebox service serves up social media feeds and conversations via Twitter and Facebook, as well as additional information on the topics, people and products featured within specific programs. Consumers use these ‘zeetags’ to search the web for more information, read up on characters or actors, purchase music, buy products featured on-screen - whether during programs or ad breaks, or simply share their views with friends and followers on social media.

As part of the deal Sky Media will become the exclusive advertising sales agent for zeebox’s synchronized advertising inventory, while zeebox will remain an independent company continuing to operate its own zeebox branded social TV platform in the UK and elsewhere.

Emma Lloyd, Sky’s Director of Emerging Products, stated: “Sky took an early position of leadership with companion devices, having recognized the demand from our customers to use second screens to discover, enjoy and interact with their favorite content. The integration of zeebox’s innovative technology will enable us to make the companion device experience even richer and more engaging. We know that millions of our customers have smartphones and tablets and regularly use them to engage with Sky on mobile devices, so it’s a natural next step for us.”

www.sky.com
www.zeebox.com

Apple continues to dominate the global market. This is certainly true in the US where it 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 on top but with other brands shining through, although the competitive landscape varies country by country.

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

Long-term prospects for the tablet industry are positive with strong growth throughout the forecast period out to 2015, 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 advances are made in the range of uses and applications available.

www.futuresource-consulting.com

As soon as the concert finished on January 1st discs for the German-speaking market were authored, mastered and manufactured by Sony DADC at its Salzburg facilities. The digital edition of the concert has already been delivered to online retailers all over the globe through Sony’s digital distribution infrastructure, managed by the Sony DADC team.

The New Year’s Concert is broadcasted from the Vienna Musikverein to over 70 countries and reaches more than 40 million television viewers. The resulting recordings with works from the Strauss dynasty and their contemporaries are among the classical market’s most important releases and are rightly considered timepieces.

Bogdan Roscic, President, Sony Classical explained, “Sony Classical’s catalogue already contains some legendary New Year’s Concerts, including the famous video of Karajan’s only appearance in 1987 and the unforgettable audio recordings documenting Carlos Kleiber’s two concerts. I look forward to continuing this tradition and also to ensuring that these recordings attain the success they deserve in all markets.”

www.sonydadc.com

The official statement is:

“We note that proceedings have been issued by Microsoft Corporation against Comet relating to the creation of recovery discs by Comet on behalf of its customers.

“Comet has sought and received legal advice from leading counsel to support its view that the production of recovery discs did not infringe Microsoft’s intellectual property.

“Comet firmly believes that it acted in the very best interests of its customers. It believes its customers had  been adversely affected by the decision to stop supplying recovery discs with each new Microsoft Operating System based computer. “Accordingly Comet is satisfied that it has a good defence to the claim and will defend its position vigorously.”

The customer is also being held up as the reason for Microsoft’s action, with the software company’s associate general counsel, Worldwide Anti-Piracy and Anti-Counterfeiting David Finn stating: “Comet’s actions were unfair to customers. We expect better from retailers of Microsoft products — and our customers deserve better, too.”

The suit charges Comet with producing the counterfeits in a factory in Hampshire and then selling the media to customers from its retail outlets across the UK.

www.comet.co.uk
www.microsoft.com

Thierry Delporte manages the production process in PIAS, co-ordinating several hundred releases a year. Xavier Gatinel is in charge of International marketing at Harmonia Mundi and keep a close eye on artist expectations. Alex Myers is the guardian of commercial strategy at Universal Music international. We also spoke to another production manager, who looks after all the releases at a major label, and who wished to stay anonymous. Their views are distilled here in a short summary of our individual meetings.

Ok, you are not consuming music that comes in a transparent plastic box anymore. That’s very much a thing of the past – isn’t it? Actually, approximately 300 million albums are produced in jewel box format each year in Europe. It’s sad to see how many labels and distributors are contributing to the decline of the physical market by holding on to this 30-year-old packaging format. All interviewees also point out that despite the environmental impact, the plastic box remains an attractive packaging option for price conscious releases.

At least nowadays, all smart major or independent labels release their physical product on a least two formats: a simple jewel box, and the alternative digipack or digisleeve (the carton based packaging). This represents the most basic form of special packaging, but there is also the market of special packaging and new consumer experiences.

As Thierry from PIAS puts it, “The fan who goes in the shop to buy music wants more than a track list and he is happy to pay a couple of extra euros to get it.” So while the jewel box is going down by much more than the 8% of the market, the special package is going up, and increasing margins. In this day and age while there are more convenient ways to music than going to a bricks and mortar shop, but two distinct markets don’t work very well with the download: the gift market and the fan market.

For gifts, say at Christmas, it is difficult to imagine the recipient smiling in front of a download waiting at the bottom of a tree. For the fan, as Gatinel from HM puts it “The fan wants to enter the universe of the artist and want to share more than the music.” For these markets but also for the consumer who still has a little extra disposable income, the industry has created special packaging and there is no turning back. Myers from Universal summarizes the situation succinctly, by saying that digital is here to stay and grow and physical must offer a different experience to compete.

So, the question is: what is the optimum strategy to develop this special market? Interestingly, this is where the approach remains fairly unstructured in many organizations.

Some companies like PIAS or Warner take a fairly cautious approach to special packaging, ensuring that it provides a real added value for the consumer. The latest dEUS album, for instance did not have any special packaging. This cautious approach, in particular in the area of special boxes allows these companies to keep an element of “special” in special packaging; the focus is on cultivating that value-add element that is paramount to winning over the consumer.

Other companies have chosen to transfer all their catalogue into special as a status statement about themselves: they present their product and catalogue as being very much a quality offering. High value packaging is also a way to communicate with your consumer your attention to detail and quality, Harmonia Mondi, the classical label, is a prime example of this type of behaviour.

For massive companies, such as Universal, the parameters differ from one label to another and sometimes even from one artist’s manager to another. Paradoxically this approach is much more individual but, as everywhere else, based on merit. It is surprising – but welcome – to see that no marketing algorithm has replaced common sense and the artistic vision of the label (some big FMCG companies wish they could have this entrepreneurial approach!)

However the growth of the market is also the main risk to the market; losing the uniqueness of the product or even worse, “tricking” consumers into thinking they are buying special packaging may backfire, providing excellent short term profits but in the long term killing this market too.

The Limited Edition (LE) is a perfect example of a good idea which could be rapidly transformed into a nightmare. The consumer sees the Limited Edition as a special offer that will give him the edge on the artist, the label can see it as a way of printing money. Here again different point of views collected come to the same conclusion: these LE products should not be abused.

Consumers value the limited edition nature of the product; it is also the most economical way for the label to behave. The trick is to create scarcity. The labels interviewed manage the rules around LE carefully and responsibly but all have experienced tension with Finance Departments ready to create “permanent” Limited Editions.

Specials are here to stay and they represent the future of the physical market, but it is a fragile market. Consumers may always, in some clearly defined circumstances, be prepared to buy something other than a download but, they are not idiots, and the market must not try to fool them. Myers puts it very clearly: “Specials are here to grow but there has to be enough in them.”

Harmonia Mundi (France) is an independent music record label founded in 1958 by Bernard Coutaz in Arles.Its catalogue is essentially devoted to classical music and, through the World Village label, to world music PIAS is one of Europe’s leading independent music groups consisting of a record company, a physical and digital Sales & Distribution service and the Global Project Management operation offering premium artist & label services. Universal Music Group (UMG), the world’s largest music content company with market leading positions in recorded music, music publishing, and merchandising.

Views were collected by Olivier Durand, Managing Director of Emthelo, an entertainment industry specialist which helps companies to reduce their costs and increase the efficiency of their supply chain.

www.emthelo.be

Although overall sales of discs fell 4.9% in value and 7.2% in volume year on year, DVD and Blu-ray Discs are still by far the most popular way to watch video entertainment, with consumers spending £1.75 billion on over 207 million units in 2011. When added to digital and rental transactions the total video entertainment sector is estimated to amount to more than £2.25 billion in consumer spend in the last 12 months. Growth was seen in the value of Blu-ray, up 26.9% last month, while the nation’s favourite format, DVD, proved very much in demand throughout December, taking 87% share of physical disc sales worth £410.1 million, a rise in value of 6.0% on December 2010.

Carey added: “Like other sectors, the video industry faced a huge squeeze on consumer spending in 2011 and it has met the challenge head on by increasing the number of ways consumers can watch fantastic content and get the most for their money. Triple Play packs are a great example of this as they enable audiences to view a title in three different ways – DVD, Blu-ray, including true 3D and a digital copy – be it on different devices at the same time or at different times and places, according to the whole family’s taste.”

Robert Price, UK Managing Director for Twentieth Century Fox Home Entertainment, added, “The run-up to Christmas saw a bumper performance for Blu-ray in the UK. Copies of Rise of the Planet of the Apes and Mr Popper’s Penguins flew off the shelves and based on early indications on digital downloads of these movies many people took advantage of the flexibility of Triple Play to watch these movies on their new tablets and smartphones.”

DVD’s volume sales rose 6%, reaching over 43 million units sold in December, alongside a 31.1% increase in Blu-ray Disc over the same period, 5% of which were 3D Blu-ray Discs. During 2011 as a whole Blu-ray continued to increase its share of the physical disc market, as volume sales rose 18.4% year on year to 15.3 million units, producing a total value of £222.8 million, which is 13% of all physical disc sales.

In the growing paid-for digital video market IHS Screen Digest estimate that downloads and digital rental transactions grew in value by 15% in 2011, with a 12% year on year increase in transactions to 71 million. The rise reflects a growing interest in tailored online services, particularly in video streaming and downloading, which now account for around 13% of the overall video market, worth some £292 million in 2011.

For the first time ever great British titles, featuring popular home-grown talent such as in Harry Potter, Inbetweeners, The King’s Speech, Pirates of the Caribbean, Paul and Peter Kay, dominated December disc sales, representing 80% of the year’s Top 10 unit sales.

www.bva.org.uk

Interestingly, the CD remains the favoured format for UK album buyers in 2011, accounting for 76.1% of total sales compared to a 23.5% market share for digital and 0.3% for vinyl. Consumer appetite for digital album downloads has continued to grow, however, said Taylor with 15 albums selling more than 100,000 digital copies in 2011. Sales of vinyl LPs rose by well over a third (43.7%) during 2011 to 337,000, their highest tally since 2005. Digital album sales rose 26.6% to 26.6m, while sales of albums on CD declined 12.6% year-on-year to 86.2m in total. However, combined sales of digital and physical albums fell overall by 5.6% to 113.2m in 2011.

“British music fans understand that the album remains the richest way to connect with an artist’s work,” said Taylor. “Digital developments grab the headlines, but the CD remains hugely popular with consumers, accounting for three-quarters of album sales. Physical ownership is important to many fans and the CD will be a key element of the market for years to come.”

The UK singles market went from strength to strength in 2011, with sales smashing all-time records for the fourth straight year in succession. Total singles sales increased 10.0% overall to 177.9m in 2011, with the vast majority (99.3%) sold as digital tracks and bundles. 1.1m CD singles were sold in 2011, representing just 0.6% of the total. All of the top 20 best-selling singles of 2011 sold more than 500,000 copies apiece.

It was a good year for UK artists in general, with five of the top 10 selling artist albums in 2011 from British acts. One of the main stars of the year was Adele, whose album 21 was the biggest-ever selling album in a single year at 3.8m sales. “British artists continue to produce incredible music that resonates at home and around the world,” said Taylor.

“But while other countries take positive steps to protect their creative sector, our Government is taking too long to act on piracy, while weakening copyright to the benefit of US tech giants. The UK has already fallen behind Germany as a music market. Unless decisive action is taken in 2012, investment in music could fall again – a creative crunch that will destroy jobs and mean the next Adele may not get her chance to shine on the world stage.”

www.bpi.co.uk

“We’re pleased to complete this transaction, which has been a transformational event for AGI,” said Atlas Holdings Chairman Andrew Bursky. “The merger provides AGI with expanded diversification, entrée to new growing end markets, and significant positions in rapidly expanding regions like Asia and Latin America. We are now exceptionally positioned to serve both regional and international consumer packed-goods, entertainment and tobacco companies on a truly global basis.”

Mike Ukropina, who served as President of Shorewood Packaging until his appointment as President and CEO of AGI-Shorewood, added: “We intend to be recognized as the best global specialty-packaging business in our markets. AGI and Shorewood bring together great people, unrivalled customer focus and a history of innovation. As AGI-Shorewood, we become a much more capable supplier, providing a breadth of product, service and creative offerings that is unparalleled. This combination of resources and capabilities will bring real value to our key customers on four continents.”

Ukropina leads an executive team that includes Mark Caines, formerly CEO of AGI North America, as CEO of AGI-Shorewood; Tony Garnish, formerly CEO of AGI Europe, as CEO of AGI-Shorewood Europe; Lucy Tzou, formerly general manger of Shorewood Packaging and IP Foodservice Asia, as CEO of AGI-Shorewood Global Gravure and Asia; and Don Eldert, formerly CFO of Atlas Material Holding Corp; as Executive Vice President and CFO of AGI-Shorewood.

“To support the double-digit growth in Asia, AGI-Shorewood will invest USD 7MM in significant expansion of our Guangzhou, China plant, including a Heidelberg CX 102 8+L UV lithograph printing press that is also capable of printing with conventional inks and water- based coatings,” said Lucy Tzou, CEO of AGI-Shorewood Global Gravure and Asia. “As a leader in delivering packaging solutions in China for more than 15 years, this major investment demonstrates our continued commitment to the needs of Chinese and multinational brads for high quality, innovative packaging in the golf, tobacco, software, entertainment, electronics, cosmetics and confectionary segments.”

One of AGI-Shorewood’s industry sectors is entertainment and media; the company employs nearly 4,000 people worldwide, operating 24 manufacturing faculties in North America, Europe, Asia and Latin America. It maintains eight creative services offices in the US, UK France and Australia, and has five plastic injection-moulding operations in the US, UK, Germany, and Poland.

www.agishorewood.com

“This achievement reflects the combined efforts of our entire team across the globe and the careful process by which we select the projects and partners we believe in. We produce pictures that aspire to entertain audiences around the world, while at the same time we have sought to find innovative ways to reach movie-goers in this changing entertainment environment.

“This year our studio reached some key milestones, including the release of three vibrant Paramount franchise pictures and our first original CGI animated film. Film President Adam Goodman and his team in production and development, and Vice Chairman Rob Moore and his team in marketing and distribution, did outstanding work and truly delivered.”

The studio had its first ever $1 billion worldwide grossing film with Transformers: Dark of the Moon, and other releases included True Grit, Rango, Kung Fu Panda 2, Captain America: The First Avenger, Footloose, Puss In Boots, Like Crazy, Hugo, and Mission: Impossible -- Ghost Protocol.

http://www.paramount.com

“The US video retail business is in decline,” said Tom Adams, principal analyst and director, US media, for IHS. “Although the rate of decrease moderated during the last two years from the double-digit drop in the recessionary year of 2009, we don’t see those declines turning into renewed growth without a fundamental change in the ownership proposition for consumers. UltraViolet delivers that kind of change. In the absence of easy access to all their purchased content across all their proliferating number of screens, consumers have been cutting back on buying discs, while the growing electronic sell-through (EST) market is simply too small to make up the difference.”

The stakes are enormous for the studios, with combined US consumer purchasing of video content - both physical and electronic - expected to decline to $9.9 billion in 2011, down 29% from its $14.1 billion peak in 2004, according to the IHS Screen Digest US Video Intelligence Service. Unless there’s a change in the consumer proposition, revenue is expected to continue to fall in the coming years to $8.1 billion in 2015, as presented in the figure above.

Instead, consumers are increasingly turning to the already popular disc-rental option, while consuming more and more on-demand video through both their pay-TV subscriptions and Internet-based subscription services like Netflix, Adams noted. The problem for film and TV producers is that the purchase models - both physical and electronic - produce far more revenue per view than do rentals or subscription services.

That’s why five of the six major studios - all save Disney - have joined in the Digital Entertainment Content Ecosystem (DECE) consortium with leading physical and electronic retailers and key technology companies to develop UltraViolet.

“We think it’s important that UltraViolet is being launched not so much as a feature of EST files, but as a value-added feature of the digital disc, on which consumers have spent $113 billion since they were introduced in 1997,” Adams added. “Even if our projections are correct that annual disc sales in the United States will have declined to some $9.3 billion in 2011, that’s still about 14 times the size of the EST business. So, there are two advantages to a disc-focused strategy. First, tens of millions of the studios’ best customers will be quickly exposed to the UltraViolet pitch in the box. Second, if UltraViolet it sparks just a 7% increase in consumer disc buying in the years ahead, it would pay off for studios as much as a doubling of the EST business.”

www.ihs.com

“It is clear that television is on the brink of a new era of convenience and engagement - a direct result of consumer demand for a convergent experience across multiple devices in the living room,” said Michael Lantz, CEO, Accedo. “Accedo is committed to delivering a next-generation experience in the living room, and together with Irdeto’s dynamic broadband and pay TV solutions, we can enable operators to seize a competitive advantage by rapidly deploying their TV Everywhere initiatives.”

Doug Lowther, EVP, Digital TV, Irdeto said: “Accedo has played an important role in evolving the multi-screen user experience which, powered by our TV Services platform, won much acclaim at this year’s IBC. Irdeto remains dedicated to providing flexible and forward-thinking solutions to our customers that deliver the right content, on the right devices, at the right time. We look forward to working with Accedo on this collaboration to help pay TV operators deliver on the promise of TV Everywhere.”

During the CES event, the two companies will showcase Irdeto’s newly-launched TV Services platform and suite of reference applications that have been created by Accedo.

www.irdeto.com
www.accedo.tv

In addition, Civolution’s NexGuard – Pre-Release Screener, already widely used with Fortium’s Patronus anti-rip copy protection for large volume duplication of DVD screeners, can now also include Fortium’s PIN-Play technology on a per-copy basis. “We are pleased to have integrated Civolution’s NexGuard forensic watermarking technology directly into our PIN-Play content protection software  and contributed to Civolution’ screener system,” added Gilliat-Smith. “Those two turnkey solutions, already deployed by major studios, can be used throughout the content lifecycle; from creation to promotion and delivery for distribution.”

Civolution’s forensic video watermarking solution creates an indelible digital stamp embedded in the content, imperceptible to the human eye, making each piece of content unique. The watermarks allow content owners to identify the source of any potential illicit copies of their materials and offer a deterrent against content theft as well as material for forensic analysis should piracy occur.

“Piracy is still savaging the media industry. It is essential that we all work together to ensure sustainable media business and creativity. We are pleased to work with Fortium to push forward with effective content protection solutions,” said Andy Nobbs, CCO, Civolution. “Fortium’ secure file distribution and disc protection products supplemented with our robust and trusted watermarking technology produces a powerful content security solution that combines access control, copy control and content identification.”

www.civolution.com

www.fortiumtech.com


“Following the UK launch, DECE plans to begin rolling-out UltraViolet in Canada, with details on timing to be announced soon, as well as a number of other territories in 2012 and 2013,” was the official statement. DECE expects the licensee list in the UK to grow in the coming months with the roll-out gathering pace in 2012, with UltraViolet rights initially introduced via Blu-ray and DVD discs, but later through online retailers or apps for download/streaming.

“The UK home video environment is a vibrant and evolving marketplace, where consumers are demanding a more advanced and open alternative to the closed video distribution systems being offered today,” Mark Teitell, General Manager DECE commented on the UK launch. “The UK launch of UltraViolet represents another key step in the development and roll-out of this new ecosystem, which provides consumers with a superior value proposition for owning, collecting and sharing digital movies and TV shows. We’re looking forward to working with the inaugural licensees we announced today to begin introducing UltraViolet to consumers in the UK over the coming months."

The inaugural 21 companies include Comcast Corp/NBCUniversal, Cyberlink Corp, Intel Corp, MediaNavi, Rovi Corp, Samsung Electronics, Sony, Twentieth Century Fox and Warner Bros.These licensees are now authorized to play 55 key roles in the UltraViolet ecosystem, spanning content provider, retailer, streaming service provider, app/device maker and download infrastructure/services provider.

www.uvvu.com

Receiving honors at this year’s awards luncheon in Hollywood will be:

• Blu-ray Disc Association - Blu-ray 3D Specification
• 
Cameron Pace Group - Shadow Technology and the Shadow D System
• 
DDD - TriDef 3D Experience
• 
Deluxe UK - Babel 3D Subtitling Technology
• 
HDMI Licensing, LLC - 3D Format Standard over HDMI Interface
• 
LG Electronics - LG Cinema 3D TV
• 
Masuji Soto and David Sykes - Stereo Movie Maker
• 
Panasonic - AG-3DA1 Twin Lens 3D Camera Recorder

• Peter Wimmer - Stereoscopic Player
• 
Sony Playstation - 3D Firmware

• Vizio - 3D Flatscreen Series

“Our theme for 2012 is ‘Make It 3D,’ and these are the organizations which have met industry challenges with superb technical innovation,” said Jim Chabin, President of the Society. Entries were reviewed by the Society’s 3D Technology Awards Committee for achievement during 2011.

www.international3dsociety.com

During the initial rollout, customers will have a choice of more than 70 movies, including 30 new releases, with three titles exclusive to American from Paramount. The tablets also feature a special touchscreen specifically designed for American, and additional functionality and content is due to be rolled out over time, beginning in Q1 next year, and will include Wi-Fi capability on equipped aircraft, games, and eReader publications.

“The addition of the Samsung Galaxy Tab 10.1 to American's inflight amenities illustrates the Tab’s universal appeal to a variety of customers,” said Tim Wagner, Samsung Mobile Vice President and General Manager of Enterprise Sales.

www.aa.com

AFI Movies of the Year included Bridesmaids, The Descendants, The Girl with the Dragon Tattoo, The Help, Hugo, J. Edgar, Midnight in Paris, Moneyball, The Tree of Life and War Horse TV Programs included Breaking Bad, Boardwalk Empire, Curb Your Enthusiasm, Game of Thrones, The Good Wife, Homeland, Justified, Louie, Modern Family, Parks and Recreation, while Special Awards went to The Artist and The Harry Potter Series.

AFI Awards is the only national recognition that honors the community’s creative ensembles as a whole, acknowledging the collaborative nature of the art form. Honorees are selected based on works which best advance the art of the moving image; enhance the rich cultural heritage of America’s art form; inspire audiences and artists alike; and/or make a mark on American society.

www.afi.com

However, Amazon’s Kindle Fire attracted a great deal of attention and discussion. “A recent study showed that the iPad accounts for 97.2% of all tablet traffic in the US,” said Jeff Bercovici of Forbes magazine in a one- on-one discussion with Keith McAllister, Global Editor and Publisher of Consumer Media for Thomson Reuters. Bercovici queried: “What would diversity mean for the tablet market, or is it better/easier to have one platform for content consumption?”

“The Amazon Fire is a great product,” said McAllister, “and competition is good” – particularly with the tablet adoption rate worldwide what he called “startling” even though it is “still really early days”. That meant having to adapt and change mindsets, he pointed out: “We have to keep pushing the learning curve. A lot of the future is going to be about delighting the audience.” No small feat in the dawning age of the table and multi-device consumers, he said, noting that there are different usage patterns in the digital content lifecycle. “Laptops are for the day, iPads are for night, smartphones are for snacking content or quick communications. We need to figure out how to provide content to fit in with those patterns.”

Another conference theme first aired by McAllister and revisited constantly by speakers over the next few days was, he said, “It is essential for people to be able to access data – that is an important part of the future of tablets.”

And, it would seem, tablets are an important part of the future of content delivery and monetization – a notion that was reinforced by David Sidebottom of Futuresource Consulting who said: “Tablets are one of the fastest ever growing CE devices, with an increase this year of over 200%. There have been 50 million shipped this year and we expect to see that grow to 400 million by 2015.” This means 15% penetration by 2012. In addition, 2012 is set to see one billion smartphones shipped worldwide. These figures, Sidebottom stressed, point to a fantastic opportunity for those in the mobile delivery chain, particularly the content owners.

He, too, touched on the Fire during an overview of the market. “The Kindle Fire is a platform that could provide a healthy alternative to the iPad,” he said, “the market has been crying out for such an alternative.” This year, tablets and smartphones are the ‘must have’ products, seeing 54% growth with 450 million units shipped this year. “A key to this has been Android,” said Sidebottom. E-readers have also seen a 77% increase from last year, with Smart TVs doubling.

While the growth in tablets is not currently cannibalizing the laptop sector, they will eventually start to erode the notebook and laptop market share, Sidebottom noted. In addition, there are a lot of different companies getting involved in mobile video content, with mobile apps impacting other entertainment sectors.

GAMIIFICATION AND MONEY-MAKING

Another big buzzword over the course of the event was ‘gamification’ and in the pre- conference workshops it was a key concept in the success of making money from digital content delivery. That, and engaging the consumer, as Cachita Hynes of Metro Goldwyn Mayer pointed out. Content is only king if the customer is engaged, and despite what other content owners may think, it is not just new and blockbuster content that can be successful. “Studios all need to expand their thinking and learn from each other on new ways to provide content,” she stressed.

Mobile content delivery can bring in whole new demographics – as an example, she pointed to Army of Darkness, which is not a new movie, but was given a new lease of life through its release as a game. “Following that, we have seen the numbers go up on iTunes both for sales and rental of the movie itself,” she said, “people play the game and then want to watch the movie.”

Gamification is a great way to make money out of ‘old’ content, was the consensus; as Evan Silverman of A&E put it: “Gamification is not just hype but, as with most things it is not always the right fit for everything.” When it was right, it worked well, he said, with the very popular Pawn Stars, which was integrated into Facebook, generating seven-figure revenue. “The right property done well can drive revenue,” he said.

“There is no one way to monetize mobile content,” was the view of Regan Fletcher of Polar Mobile. “You need a digital strategy.” He provided two extreme examples of how what worked for one did not work for another: one weekly print magazine customer with 100,000 paid subscribers provided a free daily news feed app. “They got one million downloads and their paid subscriptions went up by 50%.” This was, in part, because the daily free app supplemented rather than cannibalized the weekly print magazine.

In contrast he pointed to a studio that wanted a mobile strategy to “get more people into theatres” for a big upcoming release. Following a huge amount of work and an extensive pitch on a content-rich app around that particular franchise with games a big part of it, the reaction of the studio executives was that they had been hoping for a ‘cool screensaver they could charge for’. That, he said, was “very shortsighted”.

Engagement was another key word during the panel discussion and, panellists agreed, that was the key to monetization of content. Interestingly, it would seem that many forms of content delivery are still not, in themselves, generating revenue – rather, it is often the engagement of consumers and building on brands and customer loyalty that are key to enhanced revenue generation in more traditional means.

The need for loyalty was driven home by Linda Perry-Lube of The American Museum of Natural History, who provided details of a mobile app developed to encourage visitors as well as to enhance the visit and provide post-visit added value.

Perry-Lube echoed the statement made earlier by Regan Fletcher of Polar Media – there needs to be a sound digital strategy. “Our goal was to develop a worldwide community – we are a global institution despite the ‘American’ in our name.” The aim was to deepen engagement onsite and online, which meant “It had to be mobile because of the growth and ubiquity of devices. We also felt it was better for people to be able to use their own devices.” The iPhone was a “no-brainer” as a device, given that 30% of visitors had an iPhone or an iPod touch. She too, believed that the content needed to be tailored to the device. The aim was to create content that was snackable and not like the content already available on the museum’s website – though it should serve to drive users back to the website.

Among the lessons learned, she concluded, were that mobile apps are for branding, mobile web is for revenue generation, and tablet monetization is best suited to magazine or book-like content.

AWARENESS AND ENGAGEMENT

Day one of the main conference agenda saw much discussion about engagement of the digital content consumer, along with the double-edge sword of opportunity and challenge. “We’re all here because market forces are changing,” said opening speaker Stephen Snyder of Wipro Technologies (pictured), who described the company as like “Thomas the Tank Engine – a helpful little engine, helping customers monetize their content. Seven years ago, he told his audience, twitter was something only non- angry birds did. “We’re all here because market forces are changing how each of us is dealing with content and the consumer as we move from physical to digital – it’s not new, but it’s a matter of degree and pace.” New devices and connectivity are changing the dynamics of content and commerce, he pointed out.

Snyder followed on from his presentation by moderating the keynote panel which he described as comprising companies from different sectors of the industry, not “people fighting over the same hunk of raw meat”. Panellists, who discussed the keys to success in a digital world, included Alex Barkaloff, Executive Producer of Lionsgate Digital; Ezra Kucharz, President of CBS Local Media; Howie Singer CTO of Warner Music; and Kiliaen Van Rensselaer, VP Digital, News Corporation.

Most agreed that while there was a challenge from iTunes and Amazon whose own aims were to control the end consumer, they were also good partners and a good way to help distribute content. There did, however, said Van Rensselaer, need to be a level playing field for all competition, not just a two-horse race.

Knowledge of the consumer was another important aspect of success, as Singer pointed out, with apps driving commerce and the connection to consumers. “In the physical world we knew nothing about who bought our products,” he said. “We still don't get as much info as we would like but we now have access to a lot more and there are more direct to consumer opportunities.” All music companies now need to strive for broader rights: “People always have the choice of either buying music from us or finding it and downloading it for nothing.” Barkaloff agreed that apps were one good way to engage consumers in many ways and channels, and help find out who the core audience is.

One cautionary note came from Van Rensselaer who stressed that success also entailed having a great brand: “It’s not just about spending a lot of money on advertising.” True, agreed Kucharz, “Social marketing is good for building awareness but it doesn't translate to dollars. We are big fans of social media but it isn’t a cure- all and it has to be implemented correctly.”

In a ‘now for something completely different’ at the event, four startup companies presented snapshots of their own products and USPs to a panel of digital delivery experts and VCs. Each presenter was grilled by the panel and scored, with Rodney Gibbs of Ricochet Labs taking the honours for highest score.

The Ricochet Labs offering was the concept, as Gibbs explained it, of providing “a game layer across all knowledge” with the Qrank platform of quiz-style gaming, described by the New Yorker as “interactive jeopardy on steroids”.

The Q&A quiz format which, Gibbs pointed out, dates back to Socrates, was “sticky gamification” and a way to provide the right amount of content for people who, he said, “consume little bite-sized chunks of content throughout the day – the challenge is to engage them and maintain stickiness”. The concept stuck with the panel as a winning concept, though the other three companies were also received with positive responses.

Those companies were Plyfe (“Life is a game, play life with Plyfe”), a universal incentivization platform providing rewards for consumers’ daily digital activity; Liveintent, which provides a prediction engine with an ad management and targeting facility to help deliver advertising through email (“Email ads perform higher than display”); and NewsCred, which helps content producers generate new outlet of revenue by syndication content via the company’s API (“Vision: to be the definitive syndication platform for the world's best content”).

SECURITY AND THE CONSUMER

One of the DCM East sponsors, Irdeto, used the event, along with the Frankfurt Book Fair, to announce the launch of its new ActiveCloak for ePublications solution. The new solution is already in implementation with one of the industry’s top online publishing companies, to be publicly revealed at a later date.

Christopher Schouten of Irdeto was enthusiastic about the event and its opportunities. “It’s an excellent and unique opportunity to look at all aspects of digital distribution across multiple platforms,” he said. “Many conferences are vertically focused whereas this deals specifically with monetizing digital content.”

Schouten moderated a panel that kicked off the second day of the main conference; the first, entitled ‘Digital distribution - security, quality and cost’, included panellists Ellie Hirshhorn, EVP and Chief Digital Officer, Simon & Schuster; David Brinker, SVP Operations & Business Development, The Daily; and Harvey Schwartz, VP, WhoSay. Schouten began by discussing the fact that there was “no more tyranny of the scheduler – people have taken control of what content they view”. Content now, he said, is personal, portable, and flexible.

To the question “What is one consumer service or device that has delighted you?” Brinker responded, “Services like Evernote and Dropbox as good examples of the cloud, which is ultimately where the app universe is going to go”; Hirschhorn had no qualms about “going for the obvious - the iPad because it’s revolutionized the way we watch TV, read, even talk to each other”; and Schwartz admitted to being a “Twitter addict. It has changed our daily activities – for me it is a news source and a way of getting client information on a timely and regular basis.”

Most of the panellists, pointed out Schouten, had come from a more traditional paradigm, which was now shifting to digital but was not quite there yet – what were the opportunities and challenges? For The Daily, said Brinker, there are great opportunities for marketing. For instance, he said, “With the music business in 1994 marketing was going to clubs and handing out flyers and cassettes”, but now marketing is much more convenient. With a publication made natively for the iPad, the goal is to get users to read it and experience it: “Social media has allowed us to go to consumers and drag them into our brand.”

For Simon & Schuster, said Hirshhorn, the challenges and opportunities were also to work directly with the consumer. The publisher had recently launched a Facebook tag, she said, which provided a huge amount of feedback, which was good, but led to its own challenge: “What do you do with it all?”

Social media and services such as WhoSay, according to Schwartz, gave back to celebrities control over their own personal content so that they could post photographs and information themselves. “We enable the content creator to take control of that content and participate in a way they choose.”

Returning to the over-riding theme of security, some of the concerns aired were protection of customers’ databases and unauthorized copying and distribution of content. “The bulk of people will be honest with a good experience and the right price,” Hirshhorn believed. The importance of pleasing the consumer was another theme reprised throughout, particularly in another panel on how future devices will influence content distribution and consumption. The panellists agreed that it was indeed devices, plural, and their respective companies were all focusing on providing content across multiple platforms. There is no one device; as Noah Gellman of Kaltura pointed out: “As we move into a world where we have freedom of choice I am going to choose what I want as a consumer and force content creators to raise the bar.”

WOMEN IN DIGITAL MEDIA

Monetizing digital content is what the industry is all about these days, and the DCM series of events provides a unique opportunity to learn about it. DCM East in New York provided another unique opportunity with its Women in Digital Media Networking session following a day of pre-conference workshops. The women-only session highlighted the importance of women in the digital delivery arena, while underscoring the fact that they are seldom in evidence at events such as this. “I think it is important to provide an opportunity for women in digital media to meet and discuss the industry and their own roles within it,” said Frances Rose of event organizer Clarion. D2D

www.dcm-east.com

Regarding tablets, said Marazzani: “Look for them to take a much bigger slice out of the iPad’s market share in 2011.” On the smartphone side, “Social game makers like Zynga, Mocospace and Booyah will make their games more social by tapping users’ social graphs in locations to enhance the mobile versions of their games.” Mobile operators have lost control of smartphone content, following Apple’s “tight grip on the iPhone user experience and the openness of the Android operating system”, he added. However, 2012 should see carriers “bounce back as trusted advisors to offer their subscribers premium app stores with curated content and user friendly, integrated billing”.

On the downside of the market, said Marazzani, there are likely to be massive layoffs in the social web game space. “With multiple hit games and big marketing budgets needed to stay afloat at the top of the Facebook game charts, many social publishers simply weathered 2011 waiting to see what Zynga’s IPO would foretell for their own futures. Faced with the reality that there are too many people working on too many games for the market to bear, social developers will be forced to place smarter (and fewer) bets as user acquisition cost and competition grows. The result will be more belt tightening along the lines of developer RockYou (ZooWorld), who shed 40% of its staff in late 2011.”

www.exent.com

Music contributing to good sales include new material from Rihanna, Amy Winehouse, One Direction and Justin Bieber and Deluxe and Special Edition albums from The Rolling Stones, Susan Boyle, Florence + the Machine, Hugh Laurie, David Guetta and Gorillaz. In the 12 months ending September 2011, one in 10 CD sales of the Top 200 best-selling artist album titles were Deluxe and Special Editions.

The lead-up to Christmas continues to be an important time for music sales. In the past five years, December has accounted for an average 22% of annual album sales. Last year, CD sales represented 86% of all music bought during the final quarter of 2010 with Kantar’s Worldpanel reporting that over a half of all CD album sales (51.1%) were attributed to gift purchases.

“Be it the new Spotify gift card, iTunes voucher or a chart-topping album from your favourite artist, there is something for new music buyers and superfans alike at better value than ever before,” said Taylor. “CDs gift-wrapped and delivered to your door by the retailer make an ideal gift for Christmas whilst Deluxe and Special Editions of albums make a perfect present for die-hard music fans who want to get their hands on superbly packaged albums with bonus audio and video content and a wealth of memorabilia.

www.bpi.co.uk