2011: Now Trending in Entertainment

06 January 2011

By Hope Boonshaft, EVP and General Manager, Southern California

Expect to see an intense focus on products and services geared to the way today’s consumers want to view entertainment, for example, the introduction of a slew of new tablets and smart phones with expanded capabilities and applications. Another key trend is the ability to digitally connect the home with all personal devices. While Apple and Google have been trying to capture the market to connect the Internet to the TV, many CE manufacturers and service providers will partner with the studios and enter the marketplace.

Sales of Blu-ray discs and players will outpace traditional DVDs and players. With their Wi-Fi capabilities and ability to copy and download additional film material online, Blu-ray players are seen as the gateway to the digital future for consuming entertainment. On the broadcast and cable side, Video on Demand (VOD) will take a front seat as studios will be pushed to offer VOD as an alternative to buying or renting physical discs. Kiosks that offer DVD and Blu-ray disc rentals for as low as one dollar a night will be another key factor in consumers’ viewing decisions. Despite popular belief, physical discs will be available for the next decade even with the escalation of digital delivery growth.

Consumers will be split as to quality versus convenience.  Convenience will remain key, but if consumers encounter problems with streaming, downloading or playing content, they will quickly abandon it.  The true die-hards will stick with quality and go for the rental or purchase of Blu-ray discs. Another trend will be the storage of the content purchased via download. The digital locker, or “the cloud” as some call it, will become more front and center for consumers to store their content in a place that is not connected to their personal computer.  This will ease fears of losing one’s own content if your computer crashes.

3D will continue to be a factor that studios consider when green-lighting a film, as it is better quality to shoot in 3D than to transfer it from 2D to 3D.  3DTV for the home will be a big push for CE manufacturers, who hope that studios will release as many 3D discs as possible, giving consumers a reason to buy these new sets.

Corporate Implications

With marketing costs skyrocketing, studios will need to continue to consider re-making old films and building franchises. They will also need to offer more VOD, as the battle of “windows” (at what point after theatrical opening content is available for purchase, rent or download) continues.

Service providers such as telcos, satellite companies and cable operators, will need to make strategic alliances with CE manufacturers to meet consumers’ growing demand to view entertainment anytime, anyplace and on any device. New and existing content delivery companies, such as Hulu, will have to determine whether to base access to content on ad sales or subscription basis. Finally, until there is more 3D cable and broadcast content, as well as 3D Blu-ray discs and players, on the market, CE manufacturers will have to make a big push to sell 3DTVs.

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