Blu-ray in the Connected Home of Tomorrow The Future of Blu-Ray – Golden or Blue? Jordan Selburn Principal Analyst, Consumer Electronics jselburn@isuppli.com
con •nect•ed home \k ә -'nekted ' hōm \ n : a residential dwelling in which Consumer Electronics exhibit a high degree of digital connectivity among each other as well as to broadband internet services and cloud applications. See Also “CE 3.0”
CE 3.0 is the Culmination of Consumer Electronics Evolution CE 1.0 CE 2.0 CE 3.0 Networked Analog Digital
And The Consumer Benefits • CE 1.0 -> CE 2.0 • Quality of the media experience improves (ex: VHS -> DVD) • The media itself becomes more convenient and more reliable (ex: cassette - > CD) • CE 2.0 -> CE 3.0 • Access to media becomes faster (VoD), easier (online stores), cheaper (eBooks) • Licensed media becomes “portable” from device to device • 1-screen solution becomes 2-screens, 3-screens . . . now 4-screens • Where does Blu-ray fit into the Connected Home, today and tomorrow?
Hey, It’s 2011 – Where’s My Connected Home? Connectivity Within The Home Second TV HDMI or Wireless To the Display Coax, Power line, Multi- Telephone wire, Cat 5 room WiFi for connected home DVR Set-Top Box Media Tablets/ NAS Smartphones Blu-ray Home Gateway xDSL, WAN DOCSIS, WAN FTTH, FTTx DSLAM, Super Head end Edge WiMAX,.. CMTS, Routers OLT,… Broadband To The Home
Blu-ray In The Near Term • The Connected Home today is more theory than practice, at least as far as connectivity between devices goes • The technology and standards exist, but are still maturing • The Connected Home remains out of reach for most consumers
Connectivity Outside The Home Is Exploding • Content Creation and Consumption • 2 billion YouTube videos viewed per day • 2.5 billion images uploaded to Facebook per month IP Traffic - Video Content 8000 7000 Internet Petabytes, IP traffic 6000 Video to TV 5000 Internet 4000 video to PC 3000 Video on 2000 demand 1000 0 2008 2009 2010
Blu-ray In The Near Term • Still primarily a stand-alone 80,000 device 70,000 • More of a CE 2.5 evolution from DVDs – higher quality media, evolved 60,000 user experience (especially with 3D . . . eventually) 50,000 • Blu-ray beginning to usher in 40,000 connectivity to broadband media 30,000 • Increased content, falling prices and geographic expansion 20,000 leading to surge in system 10,000 shipments 0 • Shipments almost doubled in 2010, 2008 2009 2010 2011 2012 2013 2014 2015 should grow by more than 75% in 2011 Blu-ray player shipments (thousands) • Will surpass DVD player shipments in 2013
Complimentary Technologies Drive Blu-ray As Well • HD displays continue to 400,000 proliferate 300,000 • Costs plummeting 200,000 • Customers want HD media for their 100,000 display, Blu-ray is the highest 0 available 2010 2011 2012 2013 2014 2015 • Streaming video bandwidth ranges from 5-12 Flat Panel TV Shipments Mbps vs. Blu- ray’s 20+ Mbps • Broadband connectivity is 20,000 becoming widespread 15,000 10,000 • Geographic span continues to grow 5,000 • Fiber and DOCSIS 3.0 bring 0 connections >100Mbps Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- 09 09 09 09 10 10 10 10 Net New BB Subscribers (thousands)
Blu-ray players – a natural for streaming media • Core function of system is 80000 processing multimedia data 70000 • Optical drive is necessary, but not sufficient, for Blu-ray players in 60000 the CE 3.0 era 50000 • Profile 1.1 had optional Internet 40000 connectivity • BD-live profile (successor to 1.1) 30000 mandates Internet connectivity 20000 • Initial focus was on value added content for Blu-ray discs – games, 10000 downloadable trailers, etc. – related to the movie; same functionality 0 allows for support of streaming media 2009 2010 2011 2012 2013 2014 • New Blu-ray players support Netflix, Internet-enabled Blu-ray Players (thousands) Amazon video, Vudu, etc. for streaming video
Other Internet-Enabled CE Devices Entering the Picture – and Delivering Broadband Media • iSuppli is forecasting 5-year 2009 28% CAGR for Internet enabled CE at IE-CE 28% 33.5% Non-IE IE-CE 72% Non-IE 72% 160000 140000 2014 120000 100000 2014 80000 60000 40000 20000 32% 0 Non-IE 2009 2010 2011 2012 2013 2014 IE-CE Blue ray players Televisions Non-IE Game consoles Set-top boxes 68% IE-CE
Game Consoles – come for the games, stay for the connectivity • Current generation game 14,000 consoles have been connected since the beginning 12,000 • First firmware updates, then 10,000 online gaming • Hardware has more than enough 8,000 power and connectivity (wireless 6,000 is standard) to handle both today’s and tomorrow’s 4,000 multimedia requirements 2,000 • Video games are closed systems as are the system-specific 0 2009 2010 2011 2012 2013 2014 communities, but vendors also offer access to other sources (ex: Video Game Console Shipments (thousands) each platform has Netflix access) • Optical drive capability is a bonus
Internet enabled television – going right to the source • CE 3.0 televisions add broadband 160 capability to broadcast 140 • Almost “Back to the Future”, like the CE 1.0 days where the TV 120 connected directly to the source 100 • Not a full replacement for a 80 traditional service provider • Content is limited, though could be an 60 adequate supplement to OTA 40 broadcasts for some consumers • Not well supported by retailers 20 yet, but pushed by TV 0 manufacturers as a way to 2009 2010 2011 2012 2013 2014 distinguish their products Internet Enabled TVs (millions) • Software and UI becoming a key differentiator
Digital Media Adapters – the Next Internet- Enabled Consumer Device? • TiVo has been around for more than 10 years • Hardware sales never matched the buzz, and are declining today • Becoming a software provider? • Other vendors still ramping production • Vudu hardware never took off, acquired by Walmart for library • Production is still less than 10M units/year • And then came Apple . . . • AppleTV, no longer a “hobby”? • New box is $99, smaller, lower power, greater functionality • Roku has already responded by lowering prices • What wasn’t said may be more important • No support for 1080? No “killer apps” or content deals demonstrated • • Apple is Apple, however – can they repeat success? • Walkman -> MP3 -> iPod, market explodes • VCR -> TiVo -> AppleTV, market . . . ? • DMAs could become the Next Big Thing in CE
The Future of Blu-ray in the CE 3.0 World • Long term future is risky • Optical disk reading can be found in competing systems • Video game consoles today • Residential gateways tomorrow? • Streaming media conflicts with one of the boxes’ key functions
The Future of Blu-Ray – Golden or Blue? • Over the near- and mid-term, Blu-ray will continue to grow strongly • Increasing functionality and content make Blu- ray a “must have” system • Cost moving Blu-ray to mainstream CE device status • External factors and complimentary systems will spur Blu-ray as well • Long-term, Blu-ray likely to suffer the fate of most other CE devices • Something better/faster/cheaper comes along as a replacement • Broadband media will become pervasive – the Next Big Thing is already here • Blu-ray can help to spur streaming media . . . but ultimately at a cost to Blu-ray itself
Thank You!
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