ESCA: Packaged media superior to electronic

PHYSICAL: Panel says compatibility, storage hampers consumer adoption of downloads

By Susanne Ault -- Video Business, 6/23/2009

JUNE 23 | PHYSICAL: LOS ANGELES—There's still life left in packaged media, largely because it provides a superior experience to programs delivered electronically, according to studio technology chiefs at Tuesday's Entertainment Supply Chain Academy conference here.

Studios can still make money on DVD/Blu-ray Disc, despite the fact that users can get much electronic content for free, the execs said. Currently, downloads and streams generally lack the universal compatibility with various hardware devices that DVD/Blu-ray enjoys. Downloads also are at a disadvantage to physical because it is too easy for hardware devices to fail and destroy stored digital material.

"When we put out downloads, it was like the equivalent of VHS," Art Hair, chief technology officer at Walt Disney Studios, said during the ESCA session moderated by Variety's David Cohen. "And we improved its portability and permanence when we went to DVD. We went backwards; we went to electronic sell-through."

Because of today's difficulties in accessing digital content on all platforms, studios should think about making new revenue off of improving downloads' usability.

"We want to create an environment that can play on any player in any environment," said Chris Cookson, president of Sony Pictures Technologies. "If you go to a different bank ATM than your own, people charge you to get your own money. But there is convenience in that. If you make content readily available for people, they will think it's easier [to access] than figuring out how to steal it."

Ideally, studios will invent products that blend the benefits of physical and digital into one product. This also will help avoid a format war in which the two sides end up cannibalizing the other's sales.

"Imagine a uniquely serialized Blu-ray Disc, where you put it in a player, and it registers into a digital rights cloud (or download storage locker), and then your iPhone rings: 'You've got movie!' If integrated properly, customers doesn't have to make a conscious choice between one or the other," Cookson said.

Studios also doubted that user-generated content will overtake the worth of professional film products.

"YouTube loses $500 million for Google," said Andy Setos, president of engineering at the Fox Group. "It's fun, but there is a distinction between self-expression and business."