Site created 12/15/97.	page created: 1/17/06 Pioneer's Andy Parsons Talks Blu-ray Disc CES 2006 - Main Menu While covering the latest Blu-ray Disc and HD-DVD developments at CES, I was fortunate to have the opportunity to chat with Andy Parsons, senior vice president of Pioneer Electronics (USA) Inc., about his company's Blu-ray Disc plans in the year ahead. Pioneer unveiled a number of new pieces of home theater hardware at CES that will be available in 2006, including the BDP-HD1 Elite Blu-ray Disc player, which earned high marks from attendees and is eagerly anticipated by high-end videophiles, despite an expected $1800 price. I think you'll find it our discussion interesting, so what follows is the complete transcript. Enjoy! --- Bill Hunt (The Digital Bits): What was it in particular that attracted Pioneer to the Blu-ray Disc format, as opposed to HD-DVD? Andy Parsons (Pioneer): Well... we certainly had both technologies to consider, but what we had to ask was: What was the long-term staying power of the format? Connected to that is capacity. We're talking about, I think a pretty dramatic advantage in terms of storage capacity per disc 25GB versus 15GB, just for a single-layer disc. And to our way of thinking, if we're going to make a high-definition format, it really has to be a reference standard as far as the quality is concerned. If you think about optical disc history, starting with laserdisc back in 1980-81, for years that was the very best quality you could get on any format as far as standard definition video was concerned. And that really helped pave the way for home theater. The compact disc came out in 1982, and that was for many, many years the reference standard for audio. And DVD, when that came out, essentially replaced laserdisc in terms of the kind of picture quality you could get on an optical disc... BH: It replaced VHS as well, much to the surprise of some in the industry. AP: Absolutely. But I think that the idea here is that we always assumed that the optical disc should be able to provide the reference quality - better than broadcast, the very best you can get anywhere - of a particular title. And that means you're going to need the most storage density and the highest transfer rate you can get. So when we analyzed Blu-ray Disc and HD-DVD, we looked at them and felt there's really no contest. Blu-ray was the format that made the most sense to us. BH: How does the transfer rate for Blu-ray Disc compare to HD-DVD? AP: Well... on Blu-ray Disc, when you're playing a Blu-ray movie, the player is actually spinning at one and a half times normal speed. So you always have a guarantee of 54 megabits per second [Mbps]. And I believe the HD-DVD format runs at about 36Mbps. For a Blu-ray movie application, you've got 54Mbps. So that allocates for us 40Mbps just for the video alone. Right? Which is an awful lot of data. Now think about that. ATSC Standard high-def broadcasts are about 20Mbps, so we've doubled the available bitrate. BH: Which should give Blu-ray Disc a significantly better image quality that the best broadcast high-definition signal. AP: It should be absolutely crystal clear. We also have room for much better audio. We have six different audio codecs available: uncompressed PCM, standard Dolby Digital 5.1, DTS 5.1, DTS HD, Dolby Lossless... multiple different options are available to content providers. So it's all about quality. It's all about providing an experience that greatly maximizes the best we can get out of our high-definition TV equipment. And Blu-ray Disc, to us, is really about providing the very best home theater experience we can provide. BH: Obviously at some point, looking long term, there's going to be a lot more Video On Demand to compete with. Did the higher spec points of Blu-ray give a greater comfort zone going down the line against VOD? AP: It's an interesting phenomenon. I think a lot of people are assuming that Video On Demand is a relatively new thing. In fact, if you look at it, near Video On Demand has been around for quite a long time. If you think that most people are interested in recent releases, and that's what gets most play on their systems - their cable and satellite systems - it's really been available for years. And yet, that's not stopped anyone from going down and buying arm-loads of DVDs. The other thing is... the notion that it's one or the other has always surprised me, because I think they can coexist quite nicely. I think for the people who want a spur of the moment, "Hey, let's watch a movie tonight - I don't feel like going to a rental store or out to actually buy a movie...," then Video On Demand is nice to have. But I don't see that necessarily replacing packaged media. I think there's always the need for packaged media, because people like owning a physical manifestation of the content. BH: Well... certainly our readers tend overwhelmingly to be collectors and enthusiasts, who like building that video library. They like the packaging, the liner notes, they like to have a physical product that they own on their video shelf... AP: I think it's part of human nature - there's a sense of territorialism perhaps. You always want to have a sense of ownership. You buy it, you own it, you have it on your shelf. You know it's there, it feels good to know it's there. When it's in your hand, you feel like you're holding something real. BH: And you control the content. You can decide when you want to access it, and where you want to access it. AP: Plus, you don't have to worry about bandwidth limitations. Because Video On Demand is very bandwidth intensive. It's not going to be able to deliver that same pristine quality and experience as Blu-ray for a long time. So I think that Video On Demand is just a slice of the pie. Same with watching a movie on a video iPod. That's a different viewing environment than home theater, and a legitimate one. But it's just another slice of the pie. Which one you choose depends on the situation and the environment you're in. BH: Now... do you foresee a situation where Blu-ray Disc will coexist with standard DVD? Because obviously, VHS was around for a long time. DVD seems likely to be around for a long time, given that most consumers have really only gotten fully on-board in the last three to five years or so. It seems to me that it will ultimately be a relationship much like the one that existed between VHS and laserdisc, where DVD will continue to be the mass market product, and Blu-ray Disc will - at least initially - appeal primarily to the high-end videophiles. AP: Yes, I think that's right. I would never try to suggest that DVD is going to be obsolete any time soon. I think DVD is a wonderful format. It's got a huge following that many people - well, think about it. Most people's experience with DVD is only a few years old, as you said. It's still a relatively new technology to them. So what Blu-ray is all about is... we're changing our television standard in the United States from a standard definition, analog broadcast system to a high-definition, digital broadcast system. BH: Which I think... 2009 is now the timeframe the FCC is planning for switching off analog broadcasting in this country. AP: Right, that's when they'd like to switch off the analog. Now, standard definition is in everyone's home. So there will continue to be the need for standard definition for the foreseeable future. Blu-ray is not intended to be a replacement for that per se, as much as something you can add on to it - an additional layer of quality, if you will. If you really want to watch these films in high-definition, and I think most people are going to be curious about that, that's when you see the value of Blu-ray. But Blu-ray hardware, as far as I can tell... of all the hardware announcements I've heard... will always be able to play standard DVDs. So your existing DVD library isn't just going to become obsolete. People have invested hundreds and in some cases thousands of dollars in their DVD movies. That's not wasted money. You'll still be able to watch those movies on a Blu-ray player. BH: And that's determined by the manufacturer? The backwards compatibility? AP: Yes. But as I said, I have yet to see single Blu-ray player that couldn't play back existing DVDs. That's clearly something that's important for them to be able to do. DVD is a very powerful format, and will remain so. BH: What about high-resolution audio? Pioneer was progressive in supporting both DVD-Audio and Super Audio CD in multi-format players. Do you foresee future Blu-ray Disc players offering support for those formats? AP: Sure. That's always up to the individual manufacturer. If they want to add that kind of functionality to differentiate themselves from other manufacturers, then that's something you can anticipate. That really depends on what the market demand is for that, but there's certainly nothing to stop us from doing that. BH: I think that's one of the fears my readers have. They look at Blu-ray versus HD-DVD, and wonder if they buy these things, are they going to be gone in two years? Personally, having watched these developments from the beginning, I don't think that's going to be the case. At least not on the Blu-ray side. Format support is just too strong. Frankly, I'm not even sure there's really a format war anymore... AP: You know... I think it always comes down to content. When you're looking at it from the consumer point-of-view, buying the player is a one time event. But the content is an on-going cycle, where you're always looking for new releases... new content, whether its movies, or music, or games. It's about the content. That's what it really boils down to, more than the hardware side. Believe me, coming from a hardware company point-of-view, we understand that very clearly. And when you consider that we have seven out of eight major Hollywood studios now supporting Blu-ray Disc... and the other format has three... it's really hard to imagine how a consumer could look at that and say, "You know, I think I want to go with the format with less support." BH: Well, that's certainly my feeling. It's about the software. And as someone who deals with the studios almost daily, I have a feeling that that eighth studio's support won't take long to materialize if there's any kind of strength to the Blu-ray launch... AP: It seems logical. I don't like to count chickens before they hatch, but if you look at the way things have been going, with five studios making major Blu-ray release announcements last night, it's pretty clear that momentum is very solid for the format. And the other camp had no one making announcements, and not much in the last year. They were talking the same three studios this time last year. BH: As far as Pioneer, you're currently looking at a Summer format launch? AP: May is what we're targeting. It's always possible that there might be a slight delay for one reason or another, but we're targeting May. BH: And you'll have one model of player to start with? AP: That's right. An Elite model - the BDP-HD1. A very high-end product. Featuring 1080p output and compatible with DTS HD and the latest audio standards. So it's really designed to appeal to the performance people - the folks that are really into the very best home theater experience you can get. BH: I understand that it will offer some interesting networking features as well. AP: That's right. It will have DLNA [Digital Living Network Alliance] compliance. So if you have a compliant server on your home network that has music or video or digital photographs on it, you'll be able to access that through the player's interface on your high-definition monitor. BH: Now I understand that Blu-ray Disc's managed copy system will allow the content on select titles to be copied to a home media PC or to a portable device for viewing away from home? AP: Well actually, the managed copy function is mandatory on software titles, but the hardware does not necessarily have to support it. The other thing about managed copy is that no one has really gotten down to the details yet on how it's gonna work from a cost point of view. It's probably not reasonable to expect that you'll be able to make a copy of something and access it forever for free. Otherwise you could just go rent a movie and copy it to your harddrive - that's not something that's really fair or intended. So there's a transactional side to it that has to be worked out. Our first player doesn't support managed copy, simply because that whole structure's not in place yet. That'll take time. BH: Plus there's also a degree to which I think the hardware and software companies have to see what consumers are willing to tolerate. Obviously we've just seen what happened when Sony Music tried to reach too far in terms of copy protection, and consumers said basically, "Enough is enough." AP: That's right. The good thing about managed copy is that it provides a new method for people to have more flexible use of the content - on a portable device, or whatever it may be. DVD content protection is pretty much black and white. But at least managed copy offers new ways for people to access the content. If there's a reasonable fee, people may be willing to make use of the content in a different way than just in their home theater. That particular model is still being developed, so that'll come down the road, in the future. But for now, our first product is really geared toward the more traditional model, where you have the player and you put the disc in, and you watch the content in your home theater. The DLNA is primarily a way to make the Blu-ray player the control center for your home network - so you can access all the media content on your home network through your home theater system. BH: Speaking of content, do you know how many titles will be available on Blu-ray Disc format at launch? AP: Well, yeah. I think we've had nearly all of the studios now in the Blu-ray Group announce titles. I believe there will be over 100 titles available for the launch or shortly thereafter, including 20 music titles from Sony BMG. And I expect it to go up from there pretty quickly. BH: In talking with reps from several of the Blu-ray supporting studios, I'm told that they're virtually ready to begin work on dozens of titles. They've basically just been waiting for the Blu-ray spec to be finalized so they can go ahead and start authoring, and then have actual production model players to test the software on. AP: Yes, that's right. So far, Warner announced 15 titles last night. Disney I think announced about 10 titles. Sony announced 20 titles, I believe. Fox has its first 20 titles in development. Paramount and Lionsgate have each announced several. So I think software support will be very robust. It's funny, because I remember last year at CES, I was taking a lot of heat from people who were saying, "Why aren't you guys announcing titles yet like HD-DVD? They're way ahead of you! They've got all these titles coming." And the reality was that the formats weren't even final yet! It was way premature for HD-DVD to be taking titles. Now I feel somewhat vindicated, because the HD-DVD group used that story last year, and they can't really do it again this year. I feel like we've always tried to tell the truth. We're not going to set unrealistic expectations. We said we were going to get the Blu-ray spec done by the end of 2005, and we've done that. BH: That was as of last night? AP: Yes, we announced that last night. BH: Which means that the software people at the studios can really finally go to work now... AP: Exactly. We just have a few loose ends left to tie up on the AACS [Advanced Access Content System] side of it - that's not part of the Blu-ray spec per se, that's more on the licensing side. But we're right at the end of this process. Otherwise, I wouldn't be here saying that we'll have a BD-ROM computer drive out by the end of Q1. BH: And the BD-Java layer stuff is done too? AP: It's all done. BH: So now it's just a matter of being able to test hardware and software compatibility then. AP: Right. Getting the authoring tools finished, making sure things work correctly. The studios absolutely needed to know when players would be available, and now they do. And frankly, even if players ship a little bit before titles do, you'll still be able to use the Blu-ray players as DVD players. I remember when we first shipped - I think Pioneer was actually the first company to ship a DVD player in the United States, because they were part of our combo player, which a laserdisc and DVD combination player... BH: I remember it well. The DVL-700. AP: Exactly. And most people bought that with the expectation that DVD was coming, but most of what they were watching on that unit early on was laserdiscs. So I think maybe we'll have the same kind of scenario this time. The hardware may actually precede some of the titles for a very brief period of time. Or maybe not. You never know. It depends how fast the studios can get everything up and running, and get replication going. BH: Is this going to be a nationwide launch for Blu-ray all at once, or will it just be available in select test markets initially, like DVD was? AP: That's a good question. I think... we certainly have no intention of restricting our players to just a few markets. We'll be selling it through all our Elite channels all over the country. Software will probably be available in all the major metro areas to begin with, and then smaller markets will pick it up gradually, as tends to happen. It will migrate quickly from there, I think. The industry would like to see this propagate rapidly, so they're not going to try to restrict growth in any way. BH: What's interesting is that the gamers out there... there weren't many of them who were thinking about watching movies on their PS2s. But since the PS3 is going to be high-definition and Blu-ray capable right out of the box, it's going to be a real wildcard for the growth of this format. AP: You're right. The PS3 is going to represent an almost overnight population explosion of Blu-ray capable players. That's not something that's really happened before. The PlayStation 2 helped, because that came well down the road after DVD launched, but it did help to get a lot of players out there. But this is something new. The PS3 is launching right at the forefront of Blu-ray Disc. If Sony ships the kind of numbers we expect them to this year, that will provide a very rapid growth of players out there hungry for titles. We've been hearing between 4 and 7 million units could ship. And if you look at PlayStation Portable, with UMD discs, everyone is shocked at how many titles have shipped for that platform. And they're selling as well or better than the game software. So I think Sony has proven that they can drive a new video format like this with their gaming platforms. BH: It's certainly been a surprise to me. Given that the PSP probably has a fairly limited format life, people still seem willing to buy those same movie titles again in a new format. AP: Especially if there's a perceived value to them. You know, certain titles seem to have that attached value. If and when Star Wars ever comes out in high-definition... (laughs) I don't think I even need to finish that sentence. BH: Well, I've heard it straight from Lucasfilm reps that it IS coming eventually. And given that Fox is exclusively backing Blu-ray Disc... AP: Right. We'll see. (smiles) BH: Something else I wanted to ask you about is recordable Blu-ray. Obviously BD-R computer drives will offer that feature, but what are the plans for set-top recorders? Will Pioneer offer recording units a year or two from now? The Blu-ray equivalent of a VCR? AP: I suspect so. I think that's a more complicated model now with the advent of the harddisk recorder. But I do believe that DVRs will go along nicely with optical disc recorders, because harddisks always fill up eventually. And being able to off-load stuff that you really want to save and keep is a very natural thing to want to do. For people who are inclined to want to record programming, there's definitely a place for that. I think it's something, from a hardware manufacturer standpoint, that makes the most sense in combination with a DVR. BH: Do you foresee a Pioneer unit that's a combination DVR and Blu-ray recorder down the line? AP: I think that's a natural progression. In fact, the sample we were showing last year had a harddisk in it. It was a Blu-ray prototype that we were showing just to gauge reaction. BH: Another question about the BDP-HD1... the price point is around $1800. How quickly do you anticipate that that will drop? And will you have other, lower priced models available later in the year or next year? AP: We'll certainly be looking to introduce lower priced models as quickly as is warranted by market demand. As we were saying before, I think it really comes down to getting the early adopter market satisfied on the performance side, and then as the market matures, people who are a bit further down on the consumer pyramid will be addressed. As you go deeper and deeper into the market, that's when price becomes more important. When that time comes, we'll definitely be ready with product that's priced accordingly. But I think right now, with the format launch, we're really targeting this to the the early adopters - the videophiles - with the right price to performance ratio for that market. The idea - as it seems HD-DVD is trying to do - of trying to accelerate demand by lowering price right from Day One seems a little bit out of sync. I don't think the early adopters are most focused on price. They're focused on performance. BH: Certainly, what we saw during the early days of DVD, were players targeted to early adopters at a premium price - $1000 and over. And from there - from the early adopters - a buzz began to develop in favor of the format that spread out to the mainstream media. AP: Yeah, we had no trouble selling our laserdisc/DVD combination players when they were $1295. When they first came out, the DVL-700 and the DVL-90, we had trouble keeping those in stock, even though there were cheaper DVD players on the market. I think Sony said that their $1000 player outsold their $500 players by a healthy margin, simply because the $1000 player had the quality and performance features and cache that the early adopters wanted. So I think if you look at how this whole market takes off, and the way that early adopters behave - and we've had a lot of experience in this at Pioneer - that's the reason that we thought that our first Blu-ray player would be a good product to put in our Elite category. And we're coinciding that with our first 1080p plasma display, which is true 1920 by 1080. If you have a chance to see that in our booth... (smiles) you really should see it... BH: I have. And it's... well, stunning. There aren't many other words to describe it. AP: When you see that Chicken Little trailer in full 1080p, it's really an eye-opener. BH: Yeah, you'll get no argument from me on that score. I've been over there twice now, and there was a big crowd in front of it each time. A lot of people are going to have a tough time waiting until May, based on the comments I was hearing. AP: And that's really the kind of buyer we're looking at right now. The serious enthusiast, who's really looking for that ultimate experience. The people who know and understand and appreciate that kind of quality when they see it. BH: (laughs) Well... you and I would certainly be in that category. A lot of our readers at The Bits are in that category as well. It's interesting. I was just talking to a fellow DVD site editor last night about this. There's starting to be a real excitement for Blu-ray Disc among the people who do what I do - the folks that have been reporting on home theater issues for a while now. I know I'm excited about it, and my fellow editor last night was excited about it as well. The buzz, it seems, has already begun. AP: Believe me, we're excited too. As enthusiasts ourselves, all of us in my group at Pioneer, to have that kind of quality in the home on a big projection screen... because that's where it will really shine. The bigger the screen you have, the more exciting it will be. I'm not sure I understand the laptop viewing. I know there's a market for that, but when you're talking about a really big screen... that's really what it's about for me. BH: Me too. I'm certainly looking forward to it. Thanks for talking with us today, Andy. AP: Certainly. It's my pleasure. ---END--- The Bits would like to extend a special thanks to Andy Parsons, and to everyone at Corporate Advocates and the Blu-ray Disc Association for arranging the interview. Bill Hunt billhunt@thedigitalbits.com CES 2006 - Main Menu
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