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An industry executive speaks

In a series of Q&As, frontline practitioners in all facets of the packaged media and digital delivery industry share their views of things past, present and yet to come. It's the turn of ARNO WEGER, Managing Director, kdg mediascope GmbH in Austria.

Where do you see your company's comparative advantage in this highly competitive market?

Our comparative advantage is being an independent general contractor, offering our customers a complete and diverse range of services. These services include everything from authoring and the production of packaged media to physical and digital distribution. Without a doubt our biggest strengths are customer focus and adaptability, which enable us to react quickly to the demands and changes of the market.

Amongst the range of services you offers, which one did grow in importance over the past 2 years, which one diminished, and which new service(s) will you be offering in the coming 2 years?

As we began early in experimenting with 3D and 3D Blu-ray, this is the service that did grow the most in the last 2 years. Our DVD production diminished a bit, but the last months we see again a rising demand in DVD services. DVD will also be around for the next 2 years, so our services for DVD, BD and 3D BD will be available in the near future.

Are you considering a strategic move, or have you already implemented one, into a completely different product or service market?

We have developed an enormous expertise after operating in the high precision injection moulding business for more than 30 years. Thus, we founded our new start-up company kdg Opticomp last year in order to establish ourselves as an european competence center for high precision optical injection moulding.

There's a lot of alarmist talk about the rapid demise of packaged media in the face of online delivery. What is your view as to how long discs will be around? And what could become the main target market of packaged media?

Despite all prophecies, our expectation is that discs are going to stay around for a while although not in the used quantities. The disc-market will change over time and become a niche market for collectors.

Cloud-based UltraViolet digital locker makes inroads in Europe very slowly. What needs to happen for consumers to embrace this digital service? Could UltraViolet be superseded by large retailers' own digital locker system or by Netflix or Amazon Instant Video?

UltraViolet is not the tool to increase attractiveness of packaged media for the consumer. It is a redundant strategy: The European customer either wants one or the other. The decisive battle for the future home entertainment customer however has already shifted into the internet and its various services. And those providers that can offer their users persisting and interesting up-to-date content at the best terms and conditions will certainly prevail.

Do you think UltraViolet has the potential to increase sales of BD discs (as the studios intended) or be the death knell of the packaged media?

Neither one nor the other. In our opinion the impact of UltraViolet is simply overrated.

How much of a revolution does smart TV represent, given that consumers are already comfortable using other screens (laptops, tablets and smartphones) to access Internet-delivered content?

Internet television is already an experienced reality, which is why this channel is becoming more and more of an important and interesting supplementary business.

Ultra high definition 4K TVs are coming to the market. Is this a response to consumers demanding a better quality picture or a push by CE manufacturers who need to introduce higher-margin products?

The main motivation behind launching 4K TV sets is to reinvigorate the dying TV electronics market. It is still uncertain if this effort will be successful. The consumer is currently conditioned to invest in smarter and smaller devices than in gigantic TV sets.

Do you think 4K could be the shot of adrenalin Blu-ray needs given that a BD disc is best suited to bring ultra HD content to the home?

Not really, bearing in mind that the consumer would have to equip himself again with a new TV set and player. Furthermore, the exploitation of 4K Blu-rays will be more intricate and expensive than with traditional Blu-rays. This shot of adrenalin will rather be a panic reaction when confronted with the final bill, as 4K Blu-rays will only pay off for major productions. Consequently, it will not be an issue for the independents in the next few years.

How to you see Hollywood squaring the circle between the inexorable fall of high-revenue producing packaged media and the unstoppable rise of low-revenue generating online digital delivery?

Simply speaking, squaring this circle will not work. Only the true blockbusters productions will pay off, B- and C- class productions will encounter more and more difficulties of achieving a reasonable ROI, as the margins in a purely digital distribution will not cover costs.

What is the next technology or service leap you are anticipating?

Definitely "The Internet of Things". This will revolutionise our industry again.

If you let your imagination run wild, what system, format, application aimed at delivering content to the home would you like to see implemented in 10 years time?

Total digital networking in all areas of life....

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On predicting the future

Predicting the future, let alone the future of packaged media, is a perilous exercise, and possibly counter-productive, as the exercise closes doors rather than keep them open, argues JEAN-LUC RENAUD, DVD Intelligence publisher. Consider that: Apple was left nearly for dead 15 years ago. Today, it became the world's most valuable technology company, topping Microsoft.

Le cinéma est une invention sans avenir (the cinema is an invention without any future) famously claimed the Lumière Brothers some 120 years ago. Well. The cinématographe grew into a big business, even bigger in times of economic crisis when people have little money to spend on any other business.

The advent of radio, then television, was to kill the cinema. With a plethora of digital TV channels, a huge DVD market, a wealth of online delivery options, a massive counterfeit underworld and illegal downloading on a large scale, cinema box office last year broke records!

The telephone was said to have no future when it came about. Today, 5 billion handsets are in use worldwide. People prioritize mobile phones over drinking water in many Third World countries.

No-one predicted the arrival of the iPod only one year before it broke loose in an unsuspecting market. Even fewer predicted it was going to revolutionise the economics of music distribution. Likewise, no-one saw the iPhone coming and even fewer forecast the birth of the developers' industry it ignited. And it changed the concept of mobile phone.

Make no mistake, the iPad will have a profound impact on the publishing world. It will bring new players, and smaller, perhaps more creative content creators.

And who predicted the revival of vinyl?

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