Half of the year is gone already, which means it’s a good time for a progress report on the replication industry in 2008. My assumption, when I started talking to replicators over the last few weeks, was that they’d tell me business was bad despite all of the hoopla surrounding Blu-ray Disc (BD). I thought most consumers were spending those winter months thinking about filling up home fuel oil and car tanks and saving the pennies they might otherwise use toward CD, DVD, and BD purchases.

The reality is that business has been somewhat of a mixed bag. Entertainment DVDs seem to be holding their own. CD losses are no worse than expected. And some replicators are slowly starting to invest in BD in the expectation of a decent long-term return. The Blu-ray Disc Association sent out a newsletter this week indicating that BD software sales had hit 11 million. Not bad, when you think about the low hardware penetration. All of which leaves me with a question: Up until now, the entertainment industry has been recession-proof; is that still true, and does it hold for the launch of a new format?

“History has shown that the entertainment business is recession-proof, but the difference is today it is much more fragmented than it’s ever been,” says Connie Comeau, vice president of business development at The ADS Group. “Sure, we as consumers will pay for a movie theater ticket, but I would be hard-pressed to say that based on the economy today, we are going to run out and purchase high-definition televisions and players.”

The non-entertainment segment of the disc industry has been affected by the pains of the economy, Comeau says. “Our markets—publishing, corporate, training, marketing, and promotions—have all have been affected by the doom and gloom of the economic situation. The ADS Group has positioned itself so we aren’t 100% reliant on any particular business segment and no single customer represents greater than 6% of our total revenue. If these factors were not our company’s strategy, I can guarantee you that the current economic situation would have a greater impact on our company’s sales performance.”

In the first six months of 2008, CD units have been down slightly and DVD units up, she said. A big drop in unit volume has not been experienced, but she has seen a drop in the price per unit for both CD and DVD.

Jim Twiggs, vice president, Blu-ray Research and Development at Sony DADC, says DVD is strong, maybe even slightly up so far this year. CD declines are pretty much as expected. Blu-ray demand, he says, is extremely strong, with capacities coming on line slightly ahead of schedule. (He wouldn’t be specific about what capacities are at this point).

There’s a lot of talk in the marketplace about possible Blu-ray shortages this Christmas. Most of the replicators who are adding equipment are doing it slowly rather than adding many lines at once. Although Twiggs says it’s too early to tell about possible shortages during Christmas, he doesn’t think there are going to be any problems based on forecasts and projections. “We are in constant contact with all of the major BD clients, and have a good idea where the market is and what their forecasts are,” he says. A lot depends on what is the “gotta have” item this Christmas. Could it be Blu-ray?

If any capacity issues come up, they are likely to be to a small extent in early summer. Twiggs says that’s because the format war ended abruptly. At that point, people were still deciding where to invest. When HD DVD was phased out, everyone had to think about switching, and the reaction time for purchasing equipment takes a while. Twiggs says that DADC is not only planning for what Sony clients are doing, but are planning and watching and helping the entire market from a capacity perspective, from a supply perspective and an offload perspective. “We’re taking an industry steward approach to BD,” he says. “We’re having open forums where multiple replicators come together to talk about how to improve our yields and process.” According to Twiggs, a lot of collaboration is going on amongst the players in the market.

SF Video, which has been offering HD mastering for some time, and even did some HD DVD replication, has just added a Blu-ray line at its plant in L.A. “Even without a recession, it’s always a weird time to introduce a new format,” says SF Video president and founder Steven Feinberg. “I don’t think that Blu-ray titles sales will be massive here this year because hardware penetration isn’t there yet for clients beyond studios. I think Blu-ray needs to get past the early adopters.” Maybe over the holidays people will buy machines, he says. Next year and in 2010, he believes it will be a lot more interesting for Blu-ray replication. In terms of SF Video’s CD and DVD business, he says he can’t complain, with business ahead of last year.

As someone who writes about these formats all of the time, I’m very excited about what I see. In a couple of weeks, I’ll have the chance to meet with Disney and be given a first look at its first BD-Live title, Sleeping Beauty. Neil Young’s Archives BD-Live title is really exciting to me too—it’s a great chance to hear good high-definition sound. I thought my chances were gone with the demise of DVD-Audio and SACD. And then there’s the interactivity—a nice bonus.

What about 3D Blu-ray? From what I understand, authoring those discs is not that much different from authoring similar content for DVD. Studios are really ramping up for more of those titles.

These are all aspects of Blu-ray that can keep physical discs alive longer than the naysayers expect. However, as a consumer, despite my excitement about the new format, my upgrade to Blu-ray is unfortunately going to be slower than it was for DVD. Paying off the HDTV comes first.

Of course, content is king when launching a new format, but retailers also need to come up with some incentives to make fourth quarter a success. As Comeau says, offering a cheap Blu-ray player with the purchase of several Blu-ray titles might be key to success. Debbie Galante Block (debgalante at aol.com) is a freelance writer based in Mahopac, N.Y.

The Authoritative Blu-ray Disc (BD) FAQ Has Moved!

Hugh Bennett’s The Authoritative Blu-ray Disc (BD) FAQ has moved to its new home at Hugh’s News (www.hughsnews.ca).

It can now be found at: www.hughsnews.ca/faqs/authoritative-blu-ray-disc-bd-faq

Pioneer Electronics (USA) Inc. today announced two new internal computer drives that will write up to 20x on DVD-R/+R media and deliver unprecedented write quality that exceeds the performance of similarly priced competitive devices. The Pioneer® DVR-116D and DVR-216D DVD/CD writers features a new Optimal Write Speed setting that recognizes the disc media and automatically adjusts the drive’s write speed to ensure the highest quality digital preservation of vital files. The DVR-116D and DVR-216D will ship in July 2008.

In addition to enhanced speed capabilities, Pioneer has also minimized the total noise output from the drive for a quieter user experience. An “Anti Dust” internal mechanism design is incorporated, which gives the drives superior protection from harmful dust particles. While many current PCs come packaged with a disc drive already, the DVR-116D and DVR-216D give users the cutting-edge reading and quality writing features that have become synonymous with Pioneer’s renowned optical disc technology drives.

“Despite the vital nature of this sometimes irreplaceable content, there may be consumers out there who aren’t backing up their digital images, music and personal files because they may believe the process is too time consuming,” said Steve Cohn, director of sales for Pioneer Electronics (USA) Inc. “We bring to market two of our most performance-rich computer drives that combine rapid burning and enhanced operation to give users a reliable means to maintaining content currently stored on their hard drives.”

Optimum Write Support
While offering the ability to write to multiple DVD and CD media formats, Pioneer recognizes the many PC users who will use the drive for multimedia file backup. In addition to the traditional images and file preservation, the DVR-116D and DVR-216D bring a new level of write functionality for users. Pioneer’s Optimal Write Speed function allows the drives to instinctively prioritize performance to best suit the disc media onto which it is burning content resulting in a higher quality finalized disc.

Keep It Quiet
While increased write speed is a necessary advancement, Pioneer sought to improve the overall user experience by redesigning the drives’ internal mechanisms to better insulate the distracting noise often generated by a disc spinning at extremely fast rotations per minute (RPM). The unique interlocking design ensures a low acoustic noise by “trapping” the airflow noise generated by the spinning disc while simultaneously dampening the sounds created by normal drive usage. This feature is extremely valuable for those who are using the computer drives in a media center PC or any other application where the sound needs to be kept to a minimum.

Improved Durability
Pioneer lives up to its reputation as the drive manufacturer for those who seek quality and reliability. The DVR-116D and DVR-216D DVD/CD writers fulfill these expectations with a new Anti-Dust design. An improved chassis insulation aids in the protection of the drives’ internal components from dust and small particles that can hinder the product’s operability and lifespan. Consumers can enjoy a best-in-class device with confidence.

For users who happen to play back or burn content to a warped disc, Pioneer incorporates its Liquid Crystal Tilt/Blur Compensator technology. This unique feature compensates for a variety of media irregularities to provide more reliable disc playback and burning capabilities.

Pioneer has been an innovator of optical disc technology since it brought LaserDisc, the precursor to DVD, to market in 1980. Pioneer went on to introduce the first DVD writer for computer use in 1997, the first DVD recorder as a VCR replacement in 1999, the first DVD/CD writer for home computer users in 2001 and the first Blu-ray Disc writer in 2006. Pioneer Corporation is one of the Blu-ray Disc Founders.

Pioneer’s Home Entertainment and Business Solutions Group develops high definition home theater equipment for discerning entertainment junkies. Its flat panel televisions, Blu-ray Disc players, A/V receivers and speakers bring a new level of emotion to the HD experience. The company brands include Pioneer and Elite®. When purchased from an authorized retailer, consumers receive a limited warranty for one year with Pioneer products and two years with Pioneer Elite products. More details can be located at www.pioneerelectronics.com.

Because the current needs of movie industry to develop cutting-edge content that customers are demanding (like slick BD-J menus and in-movie applications), sofatronic and Javelin are delivering a seminar the 19th and 20th June in Hamburg, Germany. Major movie studios and C&A facilities have already successfully launched several BD-J titles with different interactive features. This growing awareness increases with every new release and a trend is developing to enhance these titles with more and more unique interactivity.

This workshop will not only give a firsthand look at the variety of features and modules available in sofatronic Kaleidoscope, but also examine recent developments within the Blu-ray industry as well as the current practices in Quality Control for BDs and standards that will have to be met. The aim for this joint venture is to provide the European industry with same benefits and perks that Hollywood is receiving. Javelin Training Seminars have been well attended on the continent and this one plans to be no different.

This event is a must-attend event for every BD-J developer and Blu-ray author. To find out more info and to register logon here.

sofatronic is a leading developer and technology provider for DVD's follow up format Blu-ray. In addition to the kaleidoscope platform, sofatronic focuses on custom application development for the Blu-ray format.

Kaleidoscope offers the film industry increased value and services to enhance revenues on its franchises, while simultaneously providing an exciting new HD home cinema experience for consumers. The sofatronic group is a 20 strong team divided between Hamburg and Los Angeles. Its founders - René Baisch, Nils Hammerich and Rouven Malecki - gained international standing with their first company, mobile games developer and publisher elkware. More information can be found online at www.sofatronic.com or by contacting Marchsreiter Communications.

Javelin Ventures delivers forward-thinking education, services and products for professional DVD, Blu-ray and HD DVD production. Javelin's mission is to help production facilities and motion picture studios make the transition to next generation home entertainment formats. Starting with education and training classes for facilities with little to no HD and BD production expertise, and moving through services and products for facilities looking to optimize their production workflow, Javelin's approach offers support to production facilities of all capacities. More information can be found online at www.javelindvd.com.

Primera Technology, Inc., the world's leading developer and manufacturer of CD, DVD, and Blu-ray disc duplication and printing equipment, has unveiled its new Rent & Rip Program for Personal CD Collections. Under the terms of the program, customers can rent a Primera Bravo SE Disc Publisher along with the company's PTRip software for just $299 per week. The Bravo SE's built-in robotics will load personal music CDs into the unit and rip tracks into Apple iTunes or Windows Media Player – automatically and "hands-free.” Round-trip transportation is included in the rental fee.

"By loading up their CDs and walking away, users will discover a way to bring new life to any CD collection, whether it is at home, work, or at a house of worship,” said Mark D. Strobel, Primera's Vice President of Sales and Marketing. "Sending 1,000 CDs to a service could easily cost $1,000 before shipping costs. For just $299, our Rent & Rip Program lets you do the same thing yourself – without the risk of sending away your valuable CD collection.”

The program is simple to use and requires just three steps:
1. Place CDs into a Bravo SE Disc Publisher's input bin,
2. Launch PTRip,
3. Click "Load to iTunes” or "Load to Windows Media Player.”

The process repeats until all CDs in the input bin are processed. Simply remove the ripped discs from the output bin, reload the input bin and click the Import button again to continue.

Primera's Rent and Rip Program is available now at the company's main website.

Indiana Secretary of Commerce Nate Feltman met with senior Sony Corporation executives in Tokyo Thursday to ink a deal with the technology giant to expand its Blu-ray Disc manufacturing operations in Indiana. The announcement, made during the state's five-day Japanese trade mission, is expected to create up to 85 new jobs in the western Indiana city of Terre Haute as the company invests more than $113 million to expand its one million plus square-foot manufacturing operations. "Sony's decision to expand its operations in Indiana is more hard evidence that our international roadwork is a good investment and is a solid step toward creating more jobs for Hoosiers," said Feltman.

Sony DADC, which currently employs approximately 1,180 associates at its U.S. manufacturing and distribution center in Terre Haute, will hire professional staff, engineers, technicians and operators in connection with the expansion plans. The facility is Sony DADC's only Blu-ray Disc manufacturing facility in the United States and currently produces 425,000 Blu-ray Discs per day in addition to compact discs, DVDs and UMDs. Blu-ray Discs are high-definition, high-capacity optical media discs.

"The rapid adoption of the new Blu-ray Disc format by consumers allows us to quickly expand Blu-ray Disc capacity in the United States. Based on the past experience with manufacturing in Terre Haute, the selection of this facility for the expansion was logical. We are thrilled with the support of the State of Indiana," said Dieter Daum, Executive Chairman of Sony DADC Global.

As part of the multi-million dollar project, the company will expand its Blu-ray Disc mastering and replication operations at the Terre Haute, Indiana facility and expand its packaging and distribution center to handle the increased production volume, Daum said.

Since Blu-ray Disc manufacturing began in Terre Haute in May 2006, the company has produced more than 100 million Blu-ray Discs in its manufacturing facilities in Indiana, Austria and Japan. By October, the three facilities combined will have more than doubled its Blu-ray Disc manufacturing capacity of 21 million discs per month to 47 million discs per month.

The Indiana Economic Development Corporation offered Sony DADC up to $975,000 in performance-based tax credits and up to $655,000 in training grants based on the company's investment and job creation.

Sony is one of more than 20 companies Feltman and the six-member Indiana delegation will meet with on the six-day trade mission to Japan that began Monday. The group will return to the United States Saturday. Indiana Governor Mitch Daniels planned to lead the delegation on the job attraction trip. However, heavy rains, tornados and flooding prompted the Governor to remain in the state to lead the recovery efforts.

Since 2005, Indiana officials have made trade missions to Japan four times. During that period, Japanese companies have invested nearly $1.5 billion in Indiana and created nearly 5,500 new jobs. In total, more than 220 Japanese companies operate in Indiana and employ more than 40,000 Hoosiers.

Following the state's 2007 trip to Japan, Toyota Boshoku Corporation made the decision to locate a new seat frame production and assembly facility in Princeton, creating more than 300 jobs. After trips to Japan and Taiwan in 2005 and 2006, Indiana became home to a new Toyota plant in Lafayette, a new Honda plant in Greensburg that will open this fall and employ about 2,000 people and suppliers to those companies, such as TS Tech and Tomasco. Indiana ranks first in North America in foreign investment for manufacturing jobs, according to a 2007 study from IBM Global Services.

www.sonydadc.com
www.iedc.in.gov

Cinram International Income Fund (the "Fund") (TSX: CRW.UN) today announced that it has signed a long-term agreement with Universal Pictures International BV (“Universal”) for manufacturing and distribution of DVDs throughout the majority of Western Europe.

“We are delighted that Universal has selected Cinram for the majority of their European business,” said Cinram chief executive officer Dave Rubenstein. “This is a great opportunity for us to leverage our existing European footprint to grow our core business and effect consolidation in the industry.

Under the terms of the agreement Cinram will be increasing its manufacturing and distribution capacity to provide the additional capacity necessary to service Universal and to continue to provide best-in-class service to Cinram’s other blue-chip customers throughout Europe.

“Cinram’s proven manufacturing and distribution capabilities along with their recognized customer-centric approach made them the best choice to handle our business in Europe,” said Eddie Cunningham, President Universal Pictures International Entertainment.

Financial terms of the agreement were not disclosed.

www.cinram.com

Toshiba Storage Device Division (SDD), the pioneer in small form factor hard disk drives (HDDs), continues to deliver innovative storage solutions with today’s announcement of the industry's highest-capacity series of SATA 1.8-inch HDDs. The new 5,400 RPM HDDs come in single-platter 80GB and dual-platter 160GB models, delivering market-leading capacity, high-performance and durability in compact packages for space-efficient mobile PC systems.

The storage capacities offered by the 160GB MK1617GSG and 80GB MK8017GSG mirror those of larger form factor HDDs, while reducing the storage footprint by nearly 40 percent compared with the 2.5-inch form factor. Combined with the new micro-SATA connector, Serial-ATA 1.5Gb/s interface and 5,400 RPM spin speed, the MKxx17GSG series offers small and light-weight solutions at increased data transfer rates for enhanced performance in sub-notebook PCs.

To develop these products, Toshiba applied an extensible platform approach that features a shared architecture base with the company’s landmark 2.5-inch HDD product line, ensuring cross-platform compatibility. This approach allows the new 1.8-inch HDDs to leverage proven technologies, as well as certified compliance to the Serial-ATA 2.6 specification.

Tremendous growth in the sub-notebook, thin-and-light mobile PC category has brought 1.8-inch HDDs to the forefront of small form factor computing, accompanied by consumer expectations for a computing experience equal to larger-sized mobile PCs and storage capacities that rival desktop PC systems.

According to IDC, the thin-and-light mobile PC category is forecasted to experience a 54 percent CAGR worldwide from 2006 to 20112, driven by interest from the consumer market segment and fueled by advancements in mobile processors and wireless connectivity. As a result, IDC projects 1.8-inch HDD shipments will grow to more than 26 million units by 2012, with a 58 percent CAGR attributed to portable PC integration.

"Toshiba's eight years in perfecting 1.8-inch HDD technology puts us in a unique position to address explosive growth in the mobility segment with proven products that deliver the performance and capacity that system manufacturers need," said Maciek Brzeski, vice president of marketing at Toshiba Storage Device Division. "At these capacities, our 1.8-inch HDDs are enabling the miniaturization of mobile PCs by providing better power consumption efficiency and improved ruggedness over larger form factors. We continue to see healthy opportunity for 1.8-inch HDD growth and adoption in the mobile PC arena, particularly in thin-and-light, sub-notebook, tablet PC and extreme mobility devices."

With more than 60 million 1.8-inch HDDs shipped worldwide since 2000, Toshiba has consistently held the number one position in the 1.8-inch HDD segment since entering the market in 2000. The company is now shipping its 17th generation of 1.8-inch HDDs and has brought to market more than 25 different models.

Toshiba's new 80GB and 160GB HDDs will ship to PC manufacturers and distribution partners in August 2008. Interested developers and design engineers can visit www.toshibastorage.com for more information on Toshiba's line of industry-leading 1.8-inch HDDs.

On the past Friday, the Annual General Meeting of the SINGULUS TECHNOLOGIES AG (SINGULUS) was successfully held in Frankfurt am Main. In particular, the shareholders were informed about the past trends of business, the acquisition in the segment Solar and the new technology Blu-ray. For the latter, it was reported that already orders for 21 Blu-ray dual layer machines were received in the 1st quarter 2008 and that additional orders followed in the 2nd quarter.

Stefan A. Baustert, Chief Executive Officer of the SINGULUS TECHNOLOGIES AG, comments: “This means that the orders for Blu-ray in the first year of the dual layer technology already by far exceeded the volume at the start of the DVD eleven years ago with 17 machines. It is also very promising that recently the first Dual Layer Blu-ray disc machine was accepted by one of our key customers in the US.”

Overall, the acceptance of Blu-ray is increasing since the decision of the biggest Hollywood studio Warner Bros. in January 2008 to exclusively support this high-definition format. Moreover, the acquisition of the Blu-ray disc activities of Oerlikon Balzers, Switzerland, in the current year strengthens the position of SINGULUS considerably. In the segment Blu-ray disc SINGULUS took over the only European competitor with this acquisition. With respect to the business prospects of the future Blu-ray market the Blu-ray Association already forecasts a significant increase in volumes sold during the 2nd half of 2008.

In addition, the selling prices for the Blu-ray hardware are expected to be reduced substantially compared with the beginning of 2008. The Hollywood studios have already announced many new titles on Blu-ray discs. These partly also include the BD-Live function. The BD-Live function of “Men in Black” provides brand new, interactive features including a BD-Live game with questions about the movie.

www.singulus.nl

Rimage Corporation (Nasdaq:RIMG) today announced that due to the impact of the sluggish economy, it is reducing its financial guidance for the second quarter of 2008 ending June 30 to earnings of $0.09 to $0.12 per diluted share on revenues of $20.0 to $22.0 million. Rimage’s previously issued guidance for this period called for earnings of $0.22 to $0.27 per diluted share on revenues of $24 to $26 million.

Sales of disc publishing hardware are currently running below previously forecasted levels as its distribution partners have adopted a more cautious approach toward their purchasing decisions in light of the uncertain economic environment. This has translated into longer selling cycles over the past few months. As a result, Rimage’s sales mix has shifted toward lower-margin consumable supplies, which has magnified the impact of below-plan sales on Rimage’s second quarter profitability.

Rimage also announced that it has instituted expense reductions totaling approximately $2.0 million on an annualized basis. The full impact of the Company’s streamlined cost structure will begin to be realized in this year’s third quarter.

Bernard P. Aldrich, president and chief executive officer, commented: “Like other capital goods suppliers, Rimage is encountering a difficult economic environment at this time. In our first quarter earnings release, we indicated that uncertain economic conditions had adversely affected our operating results for that period. Caution on the part of our customers has increased since that time. However, as evidenced by the cost reductions announced today, we are acting decisively to minimize the impact of the economy on our operations. At the same time, we believe that our longer-term prospects remain positive. We are aggressively pursuing numerous opportunities in our targeted retail, medical and business services markets. Moreover, we are moving forward with various product development initiatives that will equip us to capitalize more fully upon these promising opportunities.”

Rimage will release its second quarter results during the third full week of July.

www.rimage.com

Imation Corp. (NYSE: IMN), a worldwide leader in removable data storage media, today introduces a new line of external hard disk drives (EHDD) in the Americas. Building on Imation's expertise in data storage, the family includes portable hard drives designed for both discerning mobile and desktop users featuring sleek designs combined with the industry's latest technology and highest capacities. The line kicks off with the ultra-slim Imation Apollo(TM) Portable Hard Drive, a 2.5-inch hard drive for mobile users. A 3.5-inch portable hard drive for desktop users, the Imation Apollo(TM) Pro, will be available later this year.

The sleek, compact and USB-powered Apollo Portable Hard Drive is lightweight, stylish and extremely durable featuring a midnight black-brushed surface with chrome detailing. At just over half an inch wide, and weighing only 0.35 pounds, the ultra-slim yet durable design easily fits in the palm of your hand for convenience on the go. It offers up to 320GB of capacity for storage and back up of data, presentations, photos, and videos. A 500GB capacity version will be available later this summer.

"Hard drives continue to be a market area of significant growth, fueled by the demand for mobile products," said Keith Schwartz, director, North America Commercial Division of Imation Corp. "The Apollo Portable Hard Drive is ideal for the tech-savvy mobile professional, delivering the highest leading capacity and technology for on-the-go storage of important files."

The Apollo Portable Hard Drive comes with the easy-to-install and easy-to-use Total Media Backup(TM) software. Designed for use with both PC and Mac systems, desktops and laptops, the drive offers backup, schedule, synchronize and restore functions with just a quick click of the mouse and is preconfigured to backup all types of digital files.

For added convenience when traveling, the drive is USB 2.0 powered; neither batteries nor an external power supply are required. A blue LED light indicates when data transfer is in process to indicate when backups are complete.

The Imation Apollo Portable Hard Drive is now available with up to 320GB of capacity through authorized Imation resellers for a manufacturer's suggested retail price (MSRP) ranging from $149.99 to $222.99, based on capacity.

For additional information about the Imation Apollo Portable Hard Drive, click here.