Despite the recently announced decision by Samsung to end further introductions of Blu-ray and Ultra HD Blu-ray players in the U.S. market, companies still supporting the formats tell HD Guru that physical media, and specifically 4K Ultra HD Blu-ray, isn’t dead yet.

Conversely, more pessimistic sources in the A/V industry who watched the failures of formats like DVD-Audio, SACD, MiniDisc, Laserdisc and other physical disc formats, are warning that the end may not be here yet, but it is nearing.

If that’s the case, it will be a tragic turn of events for 4K Ultra HDTV (and even 8K TV) enthusiasts who want the absolute best signal sources to enjoy the best picture and sound quality their gear can produce.

Even the doubters won’t argue that Ultra HD Blu-ray Discs produce the best picture and sound quality available today, and probably will for years to come, as distributors have been more than willing to sacrifice the latest and greatest sound and imaging formats in favor of more efficient ones for internet streaming.

Late last month, Samsung disclosed that it would no longer introduce new Blu-ray and Ultra HD Blu-ray players in the United States. The news followed a similar announcement by Oppo Digital last year that it was pulling out of the Blu-ray and Ultra HD Blu-ray player category (among others) as it shifts resources to other products and business segments.

Both manufacturers represented a big chunk of the U.S. Blu-ray and Ultra HD Blu-ray player market share, with Samsung being the first manufacturer to introduce an Ultra HD Blu-ray player, giving it an early lead over competitors. Oppo was also early to introduce the first high-end “universal disc players” that supported multiple new and legacy video and music disc formats, including Blu-rays and Ultra HD Blu-rays.

Jack Wetherill, Futuresource Consulting senior market analyst, told us that Samsung’s decision was likely motivated by its desire “to concentrate on high volume, growth products. Despite being a leader in Blu-ray, Samsung obviously decided that the investment was not generating high enough return. The decision affects international markets, not just the U.S. — Worldwide demand for Blu-ray players fell by 16% last year, with value down 10%.”

Wetherill observed that “on a global basis, Samsung and Sony were actually closely matched in terms of Blu-ray player volume. Samsung was able to leverage its predominance in the TV market to sell more Blu-ray players than it might have done otherwise. Sony has a bigger stake in Blu-ray due to its film studio interests.”

One long-time market observer, who asked not to be identified, tells us the problem is with the content producers, who for various reasons are increasingly less eager to commit to 4K Ultra HD disc production and promotion the way they did with standard Blu-ray and DVDs before that.

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“Content producers are finding it increasingly difficult to commit to replicating 4K Ultra HD Blu-ray titles largely due to the workflow costs and limited long-term market opportunity,” says our source. “When you really look at the numbers of discs being sold against the number of new customers coming into the market, you see that the growth rate [of Blu-ray Discs overall] has slowed dramatically over the years.”

Futuresource’s Wetherill said “the market will fall more quickly than previously anticipated as a result of Samsung’s exit. Samsung is – after all – a key brand in Blu-ray with big marketing power. Other brands such as Sony and LG will enjoy some of the overspill business but the lower profile of Blu-ray as a result of Samsung’s withdrawal will be felt. We anticipate a 19% fall for Blu-ray Player sales globally in 2019 and a 21% fall in the U.S.”

Challengers Ahead

Steep challenges face Blu-ray and Ultra HD Blu-ray ahead. First, younger customers by-in-large don’t want to buy physical media any longer; that’s true in every category and 4K is no exception. At the same time, a strong uptake is being seen for UHD streaming.

On the back end, the content industry continues to consolidate. The fewer remaining studios are engaged in cutting costs. Given the increasingly niche status of the Blu-ray market compared with mainstream streaming, and physical disc skeptics say: it’s only a matter of time before some studios decide to end further disc production.

A case in point is the recent acquisition of 21st Century Fox by Disney. Fox along with Samsung were among the largest proponents and promoters of the 4K Ultra HD Blu-ray format. Disney was late to the 4K Ultra HD Blu-ray market. At the same time, it has been focused on building its forthcoming Disney+ direct-to-consumer streaming service to compete with Netflix, Amazon Prime and others.

Meanwhile, Apple, which is a long-time Disney ally on various fronts, is making a push behind 4K Ultra HD/HDR movie streaming via its huge iTunes platform.

Some have pointed to the fact that recent box office features including “The Favourite” and “Stan & Ollie” are not planned to get Ultra HD Blu-ray disc releases as an indication of things to come.

Wetherill said physical media fans don’t need to panic yet: “Samsung pulled out of DVD before some of its competitors so we should perhaps not be surprised to see it exit Blu-ray before other hardware brands. People have been predicting the death of the DVD format for many years but it still comprises about 40% of Home Video Player shipments last year.”

“However,” he cautioned, “Samsung had been aggressively rolling out UHD Blu-ray Players (complementing its 4K/UHD TV strategy) and it remains to be seen whether LG, Sony and others can sustain the growth of this market on their own.”

“The retirement of Samsung from Blu-ray cannot benefit the Blu-ray market, but we believe that there will be demand for discs – both Blu-ray and DVD – for some years to come. There is still a core of consumers who appreciate the simplicity of physical discs, the feeling of ownership and the fact that they can be played without the requirement for ongoing subscriptions (to broadband provider, to subscription video service).”

Promoters of the Blu-ray/UHD Blu-ray formats defend the longevity of the platforms. Victor Matsuda, spokesman for the Blu-ray Disc Association (BDA), said the absence of new format releases for a handful of recent titles is nothing unusual or ominous.

“Historically, we also saw this with the introduction of BD so we don’t see this is a downtrend or any indication that the BD format is not growing/progressing but rather just a business decision for each title,” he observes.

Regarding studios shifting focus from physical disc market development to their own streaming efforts, Matsuda continued that “the BDA is not seeing that trend at all. In fact, Ultra HD Blu-ray, both hardware and software, are experiencing approximately 40% and 60% growth, respectively.”

Indeed, Matsuda said the group’s leadership, which is comprised of representatives from all of the leading studios as well as electronics manufacturers, does “not see the physical disc market going away anytime soon; As the BDA has always said in the context of 4K and UHD, streaming and packaged media can and will coexist as they play different roles in the ecosystem. We still maintain that stance. While bandwidth and compression are getting better, the streaming experience remains inconsistent. With Ultra HD Blu-ray, the transfer speeds are many times greater, so the experience is consistent throughout the film and from one viewing session to the next.”

As points in argument for the sustainability of Ultra HD Blu-ray discs and players in particular, the BDA recently disclosed at CES 2019:

• UHD Blu-ray content is performing beyond expectations and is on track to reach an estimated global consumer spend of $360 million
• Ultra HD Blu-ray sales continue to grow steadily, with an 83% increase in 2018 vs. 2017, and a further growth of 45% forecasted for 2019
• Ultra HD Blu-rays are expected to account for 11% of Blu-rays sold WW in 2018 and rising to 22% by 2020, and 40% by 2022
• Key factors include the continuous release of the latest theatrical movies on Ultra HD Blu-ray, as well as recent Ultra HD Blu-ray titles from new categories: catalog, local/regional, and episodic TV titles

Future Streaming and Player Plans

Despite the greater data volumes and bit rates required for streaming next-generation high-resolution formats like 4K, 8K and others, Futuresource’s Wetherill observed that “4K UHD video services are already widely available using today’s broadband speeds, notably in OTT video-on-demand, and this is ahead of broadcast capability in many regions. 8K is feasible today but will benefit from newer codecs and would require improvements in broadband connectivity either via fibre-to-the-home or alternatively over fixed wireless, such as the forthcoming 5G mobile communications technology.”

To better facilitate the bandwidth requirments of new larger data streams, Wetherill said that work is underway on more robust digital compression codecs that will help congestion issues.

“With UHD rapidly becoming commonplace in developed markets, the industry is actively working on alternative codecs that provide increased efficiency in video compression. A successor to HEVC is being developed: known as VVC (Versatile Video Coding), the standard is due for completion in October 2020,” Wetherill said. “This aims to deliver up to a 50% bandwidth reduction over HEVC and will likely be approved as H.266 VVC. Another option is AV1 from the Alliance for Open Media, which has similar objectives but has the added advantage of being royalty-free; it may therefore enjoy wider implementation. Futuresource foresees adoption of improved compression schemes commencing early in 2022, as VVC and AV1 begin to replace older codecs and hardware decoders become available on devices such as STBs and digital TVs.”

As for the consumer electronics manufacturers who will be left to keep the Blu-ray/Ultra HD Blu-ray player markets afloat, Sony, LG, Panasonic, Philips and Pioneer are the primary remaining contenders to fill the gaps left by the Samsung and Oppo decisions.

Retail sources told HD Guru that they don’t anticipate any supply shortages for 4K Ultra HD Blu-ray in the wake of Samsung’s decision, and added that they expect the remaining manufacturers to quickly pick up the slack supplying product to drive their 4K Ultra HDTV sales in the months ahead.

Tim Alessi, LG Electronics USA product marketing senior director, said: “We believe Blu-ray players and physical media still play a significant role in the home entertainment market. While estimated player sales are predicted to decline by CTA in 2019, there are still roughly 4 million units sold, indicating considerable interest. Despite the immediacy and convenience of the many streaming options available, physical media still provides what many consider the best way to watch movies, especially in 4K and HDR because you’ll avoid any issues with bandwidth and issues during peak times that could cause interruptions while streaming. Also, many consumers still enjoy collecting their favorite titles on a physical disc.”

Similarly, a Sony spokesman told us, “Sony Electronics continues to see very solid demand for our 4K Blu-ray player line-up from customers that feel this format delivers the best 4K home theater viewing experience. We believe we have sufficient product to meet the continuing demand.

“Consumers want options when it comes to enjoying video content, whether it’s sourced from recorded media, video-on-demand (VOD) services, or broadcast television,” he continued. “Sony is committed to giving customers access to the highest-quality content, just as the creators intended, from the comfort of home. As our customer’s needs evolve, Sony will continue to provide them the flexibility to enjoy high-quality video content.

At CES 2019, Sony announced its new generation UBP-X800M2 Blu-ray player (pictured at top), which supports 4K Ultra HD playback and Dolby Vision.

Sony tell us it along with 4K Ultra HD Blu-ray players it will continue to work with the VOD ecosystem to offer streaming-optimized TVs such as acclaimed Sony Master Series 4K and 8K TVs, with Netflix Calibrated Mode. It is also working closely with broadcasters to make their infrastructure ready for ATSC 3.0 – the next generation of broadcast TV.

Similarly, LG’s Alessi says, “studios are still releasing movies on Blu-ray Disc, many now including Dolby Vision, which plays a great role in enhancing the home viewing experience, especially when paired with one of LG’s OLED or Nano Cell TVs which also include Dolby Vision (and Dolby Atmos) support.”

Keeping Discs Alive

So what can supports of Blu-ray and 4K Ultra HD Blu-ray players and discs do to help these formats avoid extinction?

According to Alessi, Matsuda and others, the best thing is to keep purchasing Blu-ray disc players and discs, and evangelize the benefits to friends and family members. After all, even niche formats like vinyl records have found a way to survive when consumers demand quality.


By Greg Tarr


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