Warner Bros. Home Entertainment Group (WBHEG), today announced the debut of the “Warner Archive Collection” (www.WarnerArchive.com), a selection of movies spanning more than 60 years of filmmaking never before available on DVD. The world’s largest film and television vault is finally open to consumers who can now purchase authentic DVD and digital downloads of more than 150 classic titles for the first time drawn from Warner Bros. Entertainment’s unparalleled film library consisting of pre-1986 MGM, RKO Radio Pictures and Warner Bros. Pictures films. They include Academy Award® nominee “Sunrise at Campobello,” “The Citadel,” “Mr. Lucky,” and many others from the Golden Age of Hollywood and beyond.

To order their movies, fans visit WarnerArchive.com, select their titles, and upon purchase, a state-of-the-art manufacturing on demand (MOD) system creates a made-to-order DVD indistinguishable in quality from a standard pressed DVD. The system places the DVD into a hard plastic Amaray case featuring custom artwork; shrink wraps it and ships the finished package to the customer which arrives in approximately five days. The cost per title is $19.95, plus shipping. Alternatively, movie fans can purchase digital downloads of these classic films to enjoy immediately on their PC. The cost for a digital download is $14.95 per title.

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dolby logo.jpgDolby Laboratories, Inc. (NYSE: DLB), announced today that it is enabling and supporting consumer electronics makers in China to develop Blu-ray Disc™ products. Three digital entertainment companies in China—TCL Technoly Electronics (Huizhou) Co., Limited (TCL), MIT Technology Co., Limited (MIT Technology), and Lite-On IT Corporation (Lite-On IT)—have agreed to license Dolby® TrueHD, a lossless compression technology, and Dolby Digital Plus, which delivers up to 7.1 channels of surround sound for future Blu-ray Disc products.

The world’s leading studios and content creators have embraced Dolby TrueHD and Dolby Digital Plus to enhance the experience delivered from Blu-ray Discs. Nearly 70 home audio systems and 50 Blu-ray Disc players from 30 companies around the world use Dolby TrueHD, Dolby Digital Plus, or both. Today’s announcement demonstrates Dolby’s continuing commitment to help expand the market for high-definition entertainment and support the efforts of digital entertainment companies in China.

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The NPD Group released its annual Digital Music Study this week. According to their research, the number of people purchasing music online climbed from 28 million in 2007 to 36 million in 2008. As a result, purchases of digital downloads increased by 29% and now account for 33% of all music sales. Their research also found that there were 17 million fewer CD buyers in 2008 which led to a 19% decline in CD sales.

According to The NPD Group, the leader in market research for the entertainment industry, the number of Internet users paying for digital music increased by just over 8 million in 2008 to 36 million Internet users. Purchases of online digital music downloads increased by 29 percent since last year; they now account for 33 percent of all music tracks purchased in the U.S. NPD’s Digital Music Study, an annual tracking study covering the music industry, also revealed that there were nearly 17 million fewer CD buyers in 2008 compared to the prior year.

The decline in CD buyers cuts across all demographic groups, but was particularly focused on teens and consumers age 50 and older. “Rising incidence of paid downloads is a positive development for the industry, but not all lost CD buyers are turning to digital music,” said Russ Crupnick, entertainment industry analyst for The NPD Group.

NPD also reported that there were 13 million fewer music buyers in the U.S. last year, compared to the prior year. The decline in music purchasing was led by a 19 percent drop in CD sales. Only 58 percent of Internet users reported purchasing CDs or digital music downloads last year, versus 65 percent in 2007.

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Sony announced this week that it has added four new Blu-ray devices to its product lineup. Along with two home theater systems, Sony unveiled two new stand-alone players. The BD-Live capable BDP-S360 and BDP-S560 deliver full HD 1080/60p and 24p True Cinema output and can decode the latest advanced audio codecs. The BDP-S560 also features built-in Wi-Fi capabilities and is DLNA ready.

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Sony is adding four new Blu-ray Disc(TM) devices to its line-up today, including a stand-alone player with Wi-Fi® capability for easy BD-Live(TM) access and Blu-ray Disc home theater systems with S-AIR(TM) wireless audio.

The BDP-S360 and BDP-S560 stand-alone players and BDV-E300 and BDV-E500W BD home theater systems deliver full HD 1080/60p and 24p True Cinema(TM) output, decode the latest advanced audio codecs and are BD-Live capable with your broadband internet connection and purchase of external memory.

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VUDU announced this week that it is the first on-demand service to sell movies in high definition. The company currently has more than 50 HD movies available on its 1080p Internet Movie Player, including the 2009 Academy Award winning documentary, Man on Wire. Movies are priced between $13.99 and $23.99 and can be stored on a consumer's VUDU box or in the VUDU Vault.

VUDU, Inc., a leading provider of digital on-demand entertainment products and services, today announced it has achieved another industry milestone by becoming the first on-demand service to offer high definition movies for download to own on its popular 1080p Internet Movie Player. HD movies are available for purchase today to all VUDU owners.

Until now consumers have been restricted to renting HD movies from on- demand services, including VUDU's library of over 1,400 HD movies, the largest HD library in the world. Today VUDU unveiled a collection of over 50 HD movies from top independent studios that are available for both rental and download to own. Movies offered in this collection will be available for purchase in both instant HD and VUDU's industry-leading HDX format at the same price. HDX is the highest quality on-demand format available anywhere on cable, satellite, broadcast, or the Internet.

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Panasonic, Philips and Sony are currently working with other Blu-ray Disc™ patent holders to establish a one-stop-shop license for Blu-ray Disc™ products. This license, which covers essential patents for Blu-ray Disc™, DVD and CD, will be introduced in the middle of this year. The license program will be offered by a new independent licensing company that will be based in the United States with branch offices in Asia, Europe and Latin America. The CEO of the new license company will be Mr. Gerald Rosenthal, former head of IP at IBM and more recently CEO of Open Invention Network. 
"By establishing a new licensing entity that offers a single license for Blu-ray Disc™ products at attractive rates, I am confident that it will foster the growth of the Blu-ray Disc™ market and serve the interest of all companies participating in this market, be it as licensee or licensor." said Mr. Rosenthal.
The three founding companies believe that the introduction of this simplified one-stop shop product license will stimulate the growth of the market for Blu-ray Disc™ products. Any holder of essential patents for Blu-ray Disc™, DVD and CD patents is invited to join this licensing entity as a licensor and also as shareholder. 

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The Chinese-language newspaper Economic Daily News  recently reported (via DigiTimes) that Lite-On has been developing Blu-ray Disc players and plans to begin production in the third quarter of 2009. Instead of selling them under their own brand, Lite-On will initially focus on production for ODM clients and may supply BD player loaders instead of finished products.

Lite-On IT, the largest Taiwan-based maker of half-height optical disc drives (ODDs), has been developing Blu-ray Disc (BD) players and plans to kick off volume production in the third quarter of 2009, according to the Chinese-language newspaper Economic Daily News (EDN).

Lite-On adopts BD pick-up heads supplied by Hitachi and chipsets by MediaTek, aiming to minimize the production cost of BD players to reach a retail price of US$150, EDN pointed out.

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SNL Kagan released a new study this week, forecasting the revenue growth in the retail home video business over the next decade. According to their study, Blu-ray player sales are expected to grow from  $255.4 million in 2008 to $1.3 billion in 2010. SNL Kagan also projects that high-definition DVD will attain 73.8% market share by 2017. However, it will face some stiff competition from video-on-demand (VOD) services, which will improve in both technology and content over the next decade.

While the current impact of Blu-ray has been relatively minor (standard DVD still comprises 97.1% of the market), SNL Kagan projects that high-definition DVD will attain 59.7% market share in 2014, with $13.1 billion in revenue. By 2017, this figure is expected to soar to 73.8%, or $15.6 billion.

The SNL Kagan study points to 2010 as the start of the resurgence in retail revenue. Sales of Blu-ray players are expected to grow from $255.4 million in 2008 to $1.3 billion in 2010, reaching mass-market penetration and spiking to nearly $6.9 billion in 2013.

However, Blu-ray's unrivaled dominance may be short-lived, with video-on-demand (VOD) poised to become a major force in home entertainment after 2017. SNL Kagan estimates that there will be 98.8 million high-speed Internet homes capable of delivering VOD in 2017 compared to 115.2 million high-definition DVD homes.

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Sony Pictures Home Entertainment opened its new Blu-ray Disc manufacturing facility outside of Shanghai, China this week. According to the Nikkei Business Daily, this is is the first facility in China, capable of producing dual-layer Blu-ray Discs. Once up to speed, it will produce 500,000 discs per month, most of which will be sold in the Chinese market.

To help spur sales of Blu-ray Disc players, Sony Corp. (TSE:6758) has begun locally producing package software compatible with the format.

Shanghai Epic Music Entertainment Co., a joint venture between Sony and the Shanghai Media Group, invested about 920 million yen to install a software production line at its plant. Ceremonies to mark the beginning of production were held on Tuesday.

This is the first two-layer Blu-ray software production line in China. The facility can turn out 500,000 units per month. Most will be sold in the Chinese market, with exports a possibility as production capacity permits. 

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Blockbuster Inc., a global leader in entertainment, and Sonic Solutions, the leading technology and service provider for premium movie content, today announced an alliance to give consumers access to a vast library of premium digital entertainment across a wide assortment of home and mobile electronic devices. Under the multi-year, preferred-provider agreement, Blockbuster will supply the branded consumer interfaces and Sonic will power content delivery across PC and consumer electronic devices.

The two companies are collaborating with a host of consumer electronic (CE) manufacturers, including Sonic's existing CinemaNow providers, to expand the ecosystem of interoperable devices offering the Blockbuster service. These devices include PCs, portable media players, Blu-ray Disc players, personal video recorders (PVRs), set-top boxes, mobile phones and Web-connected television sets. Additionally, the two companies will make their digital libraries of mainstream content available under the Blockbuster brand resulting in one of the most expansive VOD (video on demand) and EST (electronic sell-through) offerings in the marketplace.

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