Blu-ray in the Connected Home of Tomorrow The Future of Blu-Ray - - PowerPoint PPT Presentation

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 \kә-'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 Analog Digital Networked

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?

Set-Top Box Multi- room DVR Blu-ray Coax, Power line, Telephone wire, Cat 5 WiFi for connected home Second TV NAS xDSL, DOCSIS, FTTH, FTTx WiMAX,.. DSLAM, CMTS, OLT,…

WAN

Home Gateway

WAN

Super Head end Edge Routers Broadband To The Home Connectivity Within The Home Media Tablets/ Smartphones HDMI or Wireless To the Display

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

1000 2000 3000 4000 5000 6000 7000 8000 2008 2009 2010 Petabytes, IP traffic

Internet Video to TV Internet video to PC Video on demand

Blu-ray In The Near Term

• Still primarily a stand-alone

device

• More of a CE 2.5 evolution from

DVDs – higher quality media, evolved user experience (especially with 3D . . . eventually)

• Blu-ray beginning to usher in

connectivity to broadband media

• Increased content, falling prices

and geographic expansion leading to surge in system shipments

• Shipments almost doubled in 2010,

should grow by more than 75% in 2011

• Will surpass DVD player shipments in

2013

10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 2008 2009 2010 2011 2012 2013 2014 2015 Blu-ray player shipments (thousands)

Complimentary Technologies Drive Blu-ray As Well

• HD displays continue to

proliferate

• Costs plummeting
• Customers want HD media for their

display, Blu-ray is the highest available

• Streaming video bandwidth ranges from 5-12

Mbps vs. Blu-ray’s 20+ Mbps

• Broadband connectivity is

becoming widespread

• Geographic span continues to grow
• Fiber and DOCSIS 3.0 bring

connections >100Mbps

100,000 200,000 300,000 400,000 2010 2011 2012 2013 2014 2015 Flat Panel TV Shipments 5,000 10,000 15,000 20,000 Q1- 09 Q2- 09 Q3- 09 Q4- 09 Q1- 10 Q2- 10 Q3- 10 Q4- 10 Net New BB Subscribers (thousands)

Blu-ray players – a natural for streaming media

• Core function of system is

processing multimedia data

• Optical drive is necessary, but not

sufficient, for Blu-ray players in the CE 3.0 era

• Profile 1.1 had optional Internet

connectivity

• BD-live profile (successor to 1.1)

mandates Internet connectivity

• Initial focus was on value added

content for Blu-ray discs – games, downloadable trailers, etc. – related to the movie; same functionality allows for support of streaming media

• New Blu-ray players support Netflix,

Amazon video, Vudu, etc. for streaming video

10000 20000 30000 40000 50000 60000 70000 80000 2009 2010 2011 2012 2013 2014 Internet-enabled Blu-ray Players (thousands)

28% 72% 68% 32%

Other Internet-Enabled CE Devices Entering the Picture – and Delivering Broadband Media

• iSuppli is forecasting 5-year

CAGR for Internet enabled CE at 33.5%

IE-CE Non-IE Non-IE

2014

IE-CE

20000 40000 60000 80000 100000 120000 140000 160000 2009 2010 2011 2012 2013 2014 Blue ray players Televisions Game consoles Set-top boxes

28% 72%

IE-CE Non-IE Non-IE

2009 2014

IE-CE

Game Consoles – come for the games, stay for the connectivity

• Current generation game

consoles have been connected since the beginning

• First firmware updates, then
• nline gaming
• Hardware has more than enough

power and connectivity (wireless is standard) to handle both today’s and tomorrow’s multimedia requirements

• Video games are closed systems

as are the system-specific communities, but vendors also

• ffer access to other sources (ex:

each platform has Netflix access)

• Optical drive capability is a bonus

2,000 4,000 6,000 8,000 10,000 12,000 14,000 2009 2010 2011 2012 2013 2014 Video Game Console Shipments (thousands)

Internet enabled television – going right to the source

• CE 3.0 televisions add broadband

capability to broadcast

• Almost “Back to the Future”, like

the CE 1.0 days where the TV connected directly to the source

• Not a full replacement for a

traditional service provider

• Content is limited, though could be an

adequate supplement to OTA broadcasts for some consumers

• Not well supported by retailers

yet, but pushed by TV manufacturers as a way to distinguish their products

• Software and UI becoming a key

differentiator

20 40 60 80 100 120 140 160 2009 2010 2011 2012 2013 2014 Internet Enabled TVs (millions)

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!