We had a chance to interview T. Paul Miller, Senior Vice President, International for Sony Pictures Home Entertainment (SPHE), regarding the recent news that SPHE was experiencing substantial growth in Blu-ray sales in international countries. As the format war rages on, SPHE's concentration on the world-wide adoption of Blu-ray is essential to ensure that only the best format remains in the end.
Blu-ray.com: Why has Sony Pictures Home Entertainment decided to begin releasing Blu-ray movies in relatively small markets like South Africa, especially when many of these markets are prone to rampant piracy?
Miller: As I travel and work in these places I am always struck by the extraordinary level of interest in home entertainment product. While it's true much of the product sold in these developing markets is in fact pirated, there is a small but fiercely loyal base of movie fans who are willing to seek out and buy the real thing. They're looking for the quality, the value added features and the cache associated with legitimate offerings. Blu-ray plays right to that target group. And consumers looking for the best home entertainment experience are coming to us regardless of the price or availability of pirated DVD or VCD offerings.
Blu-ray.com: With the success Sony Pictures Home Entertainment has shown in these growing markets, do you believe other studios will begin supporting Blu-ray in these regions as well?
Miller: Absolutely. We encourage it and look forward to seeing their product along side ours in the very near future.
Blu-ray.com: As the format war continues, many Blu-ray owners are importing movies which are only available on HD DVD in the US. For example, SPHE owns distribution rights to "Children of Men" in Korea. Will SPHE be releasing this film, or other Universal properties on Blu-ray in
countries where you own distribution rights?
Miller: Unfortunately no - it's not our decision - it's up to Universal.
Blu-ray.com: Many Sony Pictures movies are available on Blu-ray in the US, but not internationally, forcing international customers to import from the US. Will SPHE eventually catch-up and have all Sony Pictures Blu-ray movies in every country?
Miller: The world is a big place and we'd love to serve every country but the reality is that we have to be pragmatic in terms of demand. In terms of the 60+ countries where we currently have partnerships with local distributors you can bet that they'll be coming to us when the demand is there.
Blu-ray.com: The capacity of Blu-ray discs allow for many different audio tracks to be put on the same disc, allowing one disc to be pressed for many different countries. How has SPHE taken advantage of this?
Miller: The format has given us tremendous flexibility in terms of both audio dub configurations as well as value added features. To have the kind of space that Blu-ray offers is one of the key reasons we're able to offer our product in so many markets simultaneously. The unique cost and time saving benefits of authoring one disk dubbed in English, Korean, Brazilian Portuguese, Cantonese, Mandarin and Thai translates to a tremendous advantage in the emerging markets. The sales required to justify that authoring cost can now be spread across many different markets.
Blu-ray.com: Recent sales data indicates that international adoption of high definition content and players is much slower than in the US. Why do you believe that Blu-ray is being adopted slower internationally, and do you see a point where the rest of the world will catch up with the US?
Miller: In the more developed countries I absolutely see a point where we're on parity with the US. In the emerging markets however, we are always at the mercy of macro-economic factors which preclude mass adoption of any consumer electronic device on the scale of the US.
Blu-ray.com: Many of the countries mentioned in the press release have also recently begun receiving shipments of the
Sony PlayStation 3. Is Sony Pictures Home Entertainment working closely with Sony Computer Entertainment to ensure that new PS3 owners also have Blu-ray movie content available to them at launch?
Miller: In fact our initial forays into Blu-ray distribution in the emerging markets grew out of a desire by SPHE senior management to present a Sony United front and support our partners at Sony Computer Entertainment. As an example we shipped our first units into Hong Kong primarily to place product in the Sony shops and to provide a Sony United experience for their customers. To my surprise I received a call from Hong Kong two weeks later explaining that we'd nearly sold out stock in the Sony stores and they wished to reorder. At the same time our local distribution partner was receiving strong interest from other retailers who subsequently ordered Blu-ray stock. Six weeks later we'd received orders for more than 5,000 units and it appeared Hong Kong was definitely ready for Blu-ray.
Blu-ray.com: Why do you feel that Blu-ray is more appealing than HD DVD on the international market?
Miller: HD DVD did not enjoy the head start internationally that it did in the US. Without that early start consumers naturally gravitated to the better format.
Blu-ray.com: The press release noted that Sony Pictures Home Entertainment experience a 21% increase in orders during the month of June. Do see this trend continuing throughout the remainder of the year?
Miller: I'm really excited by what I'm seeing in the emerging markets. With new territories coming online and the tremendous month over month growth of BD in places where we're already trading like Russia, Poland, Hungary, the Czech Republic, the Middle East and of course Hong Kong and Taiwan, I'm convinced we'll see double digit monthly growth for the near to medium term.
We'd like to thank T. Paul Miller for answer our questions, and Sony Pictures Home Entertainment for their continuing dedication to the development and promotion of Blu-ray.