Customer News 2009.2 www.sonydadc.com Engineering a greener future The Sony Corporation commits strongly to environmentally sustainable manufacturing and business operations Blu-ray Disc 242% sales increase in 2009 International Asset Sharing Simplifying Blu-ray distribution for both movie studios and regional distributors ARccOS 360° content security for your video assets Sony DADC ©Sony Computer Entertainment Europe. “‰”, “PlayStation”, “PLAYSTATION”, “ ”, are trademarks or registered trademarks of Sony Computer Entertainment Inc. Trade marks are the property of their respective owners. All rights reserved. Vidzone is provided by Rants Limited. Broadband internet service required. Users are responsible for broadband access fees. Charges apply for some content. Users under 18 require parental consent. PlayStation®Network and PlayStation®Store subject to terms of use and not available in all countries and languages. Welcome Table of contents 04 Blu-ray Disc in Europe "the insider" talks to Ulrik Rasch and Tore Skarelid 05 Blu-ray Authoring BD authoring at Sony DADC – capacity. creativity. capability. 05 Blu-ray Authoring Interview with Sigi Obermayr, Vice President Sales at Sony DADC UK 06 Blu-ray Sales Blu-ray market report: 242% sales increase in 2009 Welcome to the new issue of “the insider”, which is packed full of news from Sony DADC and our customers throughout Europe. We hope that you enjoy reading about our success stories so far this year. Some Blu-ray new release movie titles have broken through the 30% share level and this is another strong indicator that the format is close to entering the consumer mainstream. Without doubt, we live in challenging times. The worldwide economic downturn is posing challenges to all organisations, in every regional market. We have the production capacity and the creative capabilities to enable our customers to exploit this exciting new home entertainment platform. Furthermore, our investment in supply chain services means that we offer a true one-stop-shop solution to any content publisher or distributor looking to establish a strong market presence in Blu-ray. Our customers need strong partners: not just in terms of technical knowledge and infrastructure capabilities, but also with sound financial security which will enable them to operate throughout the current difficult conditions. Above all else, this is what Sony DADC is – a strong partner, focused on helping to support your business. We are here today, we are succeeding and we are seeking to expand and refine our customer services from authoring to every stage of the supply chain. In physical media – and in online services, on a national, pan-European or global level. We are approaching the busiest time of the year in terms of the peak autumn sales period. Market research indicates that consumer demand remains strong in the home entertainment market, and especially in the home video sector. In particular, Bluray’s development as the next generation High Definition successor to DVD continues at pace. As you will read later in this newsletter, BD movie sales continue to grow rapidly in Europe, fuelled by a broad and fast growing catalogue of movie titles, combined with significant decreases in player prices. 06 Blu-ray Distribution Sony DADC rationalises Blu-ray distribution for both movie studios and regional distributors 07 Digital Copy New report identifies 42M Euro market in UK 07 eBridge Sony DADC creates eBridge to green energy 08 Distribution Services European news When market conditions are difficult it is entirely understandable when companies become more conservative in their outlook and more averse to risk. However, we live in an evolving technological landscape and people’s media consumption patterns are changing quite rapidly. 10 Packaging Solutions We see it as a priority to keep abreast of these new developments. 12 Software + Games In particular, consumers are looking for increased mobility. Digital Copy is one example of how new technology can enhance our ability to watch our favourite movies and TV programmes on the move. 13 Digital Content Services At Sony DADC, we continue to invest in the future of the home entertainment industry. Investing to make sure that we continue to provide best in class service and support to our customers. Dieter Daum President Sony Disc and Digital Solutions Special Packaging Sourcing from China 11 Video ARccOS – 360° content security for your video assets Boost software and games sales with SecuROM Digital deliveries to Sony Ericsson’s PlayNow Arena: millions of tracks 13 eBridge Audio Pearl Jam create an eBridge to their fan base 14 Green Manufacturing Engineering a greener future Editorial & Layout/Graphics: Arkin Kol – Director Sales & Marketing Communication Marcel Penning – Marketing Communication Christina Schobesberger – Public Relations Britta Meissner – Graphic Artist Owner & Publisher: Sony DADC · Sonystrasse 20 · 5081 Anif/Salzburg · Austria Phone: +43 6246 880 237 · marketing@sonydadc.com © Sony DADC Austria AG 2009 Sony DADC disclaims all responsibility for errors in quotes & facts. We thank all of those who have contributed to this edition of “the insider”. the insider 3 w a vie e d insi Blu-ray Disc in Europe #1 Nordics "the insider" talks to Ulrik Rasch, General Manager of Nordisk Film A/S – Operations and Tore Skarelid, Senior VP Home Entertainment at Svensk Filmindustri. Tore Skarelid Ulrik Rasch How is Blu-ray doing in the Nordics? Ulrik: BD has got a tough start as most new formats are getting. But overall, BD is doing fine, it is steadily increasing. People from the Nordics are quite equipped to new technologies, so there is naturally a very good acceptance for new things. Tore: Blu-ray is growing fairly quickly, but this varies between the Nordic countries. In Sweden, the value growth for distributors is year to date 53%, while it is 200-300% in Denmark, Norway or Finland. There is still quite a lack of consumer information, awareness of the advantages of BD and awareness that players are backwards compatible with DVD. The home video industry has to work closer with retail to secure space and information campaigns. Ulrik: Yes, retail has to be attracted as well. A way to bring that forward is to generate attractive packages for retail. And reach attractive price points of course. It’s important to get the key shop personnel understand the difference between BD and DVD – with a few key messages, explained in a very sustainable way, so that the shop personal can bring the right messages across, both in general retail and electronics shops. What is your company's Blu-ray strategy? Tore: We try to release all relevant titles, of which we know that they work well on Blu-ray. These are usually new releases, bigger titles. Ulrik: We support BD and will continue to do so. We are an opportunity-driven company with a huge backcatalogue, which provides some very interesting oppor- Blu-ray Sales Contact Nordics jesper.schertiger@sonydadc.com | Phone: +45 7070 27 25 4 the insider tunities. Not just for us, but also for end-users. Sony DADC has designed a backcatalogue model for us, helping us to accelerate BD growth and fully exploit our backcatalogue’s BD potential. At the beginning, our typical BD customer was the 17-40 year old male who was interested in action and adventure genres. Now also other genres are getting momentum, as releases like Twilight and High School Musical show. In Norway, the average distributor value of Blu-ray is already close to 10%. We definitely want to get into the mass market as well, by focussing more on general retail, not just electronic stores – and our backcatalogue of course. As a fully integrated entertainment company, who also does music, games, tv/film productions and runs cinemas, we are especially focused on our local content. Among the recent release top ten for Norway, 4 out of these 10 are local productions from Nordisk Film. For the recently released Stieg Larsson movie “Man who hates Women” we already sold 2.7M cinema tickets. The home video versions have just been released and we anticipate a BD share of 10% in terms of value. How do retail and consumers respond to your BD titles? Tore: There is interest in the format. Even in Sweden, Triple-A titles are currently around 10% of the volume. Documentaries like Planet Earth are doing really well, so we will continue releasing such high end documentary titles. How could retail help to make BD more successful? Tore: By educating the consumers. The best way is probably to enable the Blu-ray experience in-store, provide brochures and pamphlets. Where do you see Blu-ray in the Nordics in 3 years? Ulrik: I am pretty convinced that BD will be successful. There will be a natural shift from DVD to BD, but that won’t happen from one day to the other. Tore: Hopefully at 30% plus, in terms of distributor revenue, maybe even more. What services are required by the replication and distribution industry? Tore: From an independent point of view there has to be an attractive cost structure for all steps of the value chain, so we can compete with the price offerings of the majors. Supply chain service providers need a holistic view on the market. The retail displays Sony DADC offer us are instrumental in putting Blu-ray into the mass market. We all hope and trust in the BD format, it is extremely important for our industry in long terms. We are optimistic, but there are still some challenges. Long term it will be fantastic. Ulrik: One of the core things is side dialogue concerning opportunities and business models. That’s exactly what you do now, especially since you have established your local service offices in the Nordics. It’s no use if replicators and distributors develop different services which are not very much in line with in what we as a entertainment company are looking for. Continuous dialogue with the key accounts is extremely important. By the end of the day, we are all living by consumer demand and we have to team up to bring attractive content to end-users in an attractive way. Our aim is to always completely deliver what our customers want. Sony DADC is a good partner as you are pretty much ahead at looking at digital solutions. How are PlayStation 3 sales doing in the Nordics? Ulrik: So far, PS3 hardware penetration is more than half a million. The recent announcement of a very attractive, new PS3, which is slimmer and offers a 120GB hard drive, makes us extremely optimistic as we are entering peak season. In terms of PS3, peak season will start earlier this year due to the new console. PlayStation fans will get more for less. Also, there is a fantastic lineup for the coming months, both from the movie side and from Sony Computer Entertainment. ew "We will not jeopardise a vsi ide n the quality of our work" i BD authoring at Sony DADC capacity. creativity. capability. Sony DADC is a pioneer of Blu-ray and has been instrumental in the format’s evolution over a number of years. The company has followed a pan-European strategic investment programme, which today sees it offering a one-stop-shop solution for content publishers and distributors looking to exploit this rapidly developing market. "Valkyrie, this great project, enabled TF1 Vidéo and Sony DADC to develop an exciting partnership and to achieve very high standards in BD authoring technology." Sébastien Aussal, Marketing Product Manager at TF1 Vidéo This one-stop-shop solution starts at a project’s planning stages, continues through the authoring & mastering studio, through replication to final supply chain management right the way up to the retail shelves. Blu-ray authoring requires technical knowledge blended with creativity – in these two areas Sony DADC’s European authoring network stands apart from any other facility. Sony DADC has established three Blu-ray authoring centres of excellence – in Salzburg, London and Paris – from where it can now support up to 60 titles each month. BD-Live focus BD-Live is a key feature of the Blu-ray format: it transforms a passive viewing experience into immersive interactivity. There is a wealth of creative potential in BD-Live, so long as the author has the technical and creative power to harness it. This is exactly where Sony DADC offers clear market leadership. Working with Sony Pictures Home Entertainment (SPHE), the company has developed a new facility called movieIQ, which utilises the Blu-ray player’s internet connectivity and BD-Live to provide unparalleled information about the movie being played. By connecting with a movie database, the viewer can instantly access information about the movie, cast, setting and even the soundtrack of the movie scene at the push of a button. movieIQ has been created jointly by SPHE and Sony DADC and will become broadly available for Sony DADC customers in 2010. In September 2009, movieIQ will feature on major Sony Pictures releases, including Angels and Demons and Terminator Salvation. Another showcase title that is a product of Sony DADC’s BD authoring network is the French regional version of Valkyrie. “Working with TF1 Vidéo, we have created an interactive menu based on BD-Java that just oozes creativity and passion,” remarked Simon Holpert, Sony DADC Authoring France. “The menu can be accessed at any time without interrupting the movie. It provides loads of bonus features, such as interactive maps, playlists of actors, biographies of the main characters and much more.” Interview with Sigi Obermayr, Vice President Sales at Sony DADC UK on BD authoring situation in the UK. A number of authoring houses in the UK are struggling or have pulled out of Blu-ray authoring. There are concerns that the drop in capacity may mean that content owners find it hard to get titles made in Q4, which could impact title sales over the holiday season. What are your thoughts on that situation? Well in the U.S., video publishers are investing significant amounts in publishing their content in both DVD and Blu-ray formats. Their investments are long-term – making sure their authoring and replication partners have the right procedures in place to ensure quality and present their content in the best ways possible. In Europe, we experience pressure from publishers to minimise authoring costs. Inevitably, this has a knock on effect in terms of the amount of time, and therefore creativity, that can be invested in the critical authoring process. Also, less time and resource means fewer quality checks and a greater chance of faults slipping through the net. How do you respond to this cost pressure? At Sony DADC we refuse to take on projects below a certain price level since we will not jeopardise the quality of our work. Sadly, the hourly rate of a tradesman in London is approximately double the current rate for C&A services, so I'm not surprised that some studios are struggling as they have invested massively in equipment and training. Will this lead to a capacity problem? Currently, in the UK market, authoring prices have fallen below a sustainable level, so I can see a situation where other studios might experience real difficulties and some may even go out of business. However, I do not foresee a C&A capacity problem as there are still enough studios in London – I just wish that UK publishers would invest a bit more in creativity and quality, which will help their C&A partners remain solvent. At Sony DADC, we remain focused on this key market. If anyone has problems authoring titles for Q4 release, or anyone would like an update on the latest evolutionary developments in BD-Live or BD-Java – please contact us. Sony DADC Authoring Sony DADC Authoring France Sony DADC Authoring UK alexander.desch@sonydadc.com | Phone: +49 607 44 98 168 simon.holpert@sonydadc.com | Phone: +33 1 64 13 82 43 jo.houghton@sonydadc.com | Phone: +44 20 7307 9789 the insider 5 Blu-ray market report: 242% sales increase in 2009 Over one in five homes across Europe is now Blu-ray Disc enabled! * * *Futuresource Consulting Ltd., 2009 At this year’s Consumer Electronics Show (CES) in Las Vegas, the Blu-ray Disc Association announced that Blu-ray had become the fastest establishing format ever – faster than DVD, CD and even colour television itself. Now, mid way through 2009, this outstanding performance continues. The latest Futuresource forecasts predict that by 2013, Blu-ray will account for over 60% of home video revenues in Europe and U.S. In Europe, Blu-ray video sales are set to increase by 242% (288% in volume over the last 52 weeks compared to last period) in 2009 when compared with the same period last year. In addition, based on the strong release slate in fall this year, it is predicted that volume growth will exceed 300% by the end of the year. This growth will be fuelled by a rapid increase in player sales, stimulated by falling price tickets, which currently start at Euro 110 and could fall below the magical Euro 100 mark this autumn. As a result the European installed player population is set to increase by over 80% this year, topping 10.3M by year’s end. “In the UK, six movie titles have exceeded 10% sales share,” commented Chris Reiser, Executive Vice President at Sony DADC. “Average sell-through-share in terms of units is 6% but in terms of value it is almost 9% indicating that this is a premium product that consumers are prepared to pay for.” “Blu-ray represents the future for packaged home entertainment. At Sony DADC, we have invested strategically in this exciting technology in order to help our customers fast track their Blu-ray businesses, thereby maximising current and future revenues,” he continued. International Asset Sharing: Sony DADC rationalises Blu-ray distribution for both movie studios and regional distributors Traditionally, the distribution of regional versions of movie titles can a be complex task. For distributors looking to market a title within a regional market, Blu-ray creation can be an expensive process. Each time a regional variant is created there are a number of essential components that are required – from HD video & audio masters to bonus tapes and subtitle sources. Also, menus must be created and audio/video elements encoded in order to create a CMF Blu-ray master. Not to mention the added complexity of creating sleeve artwork and any booklets that are required. “Since each regional variant starts with the same basic elements and results in a very similar Blu-ray product, there are great opportunities for synergies if their creation is co-ordinated centrally” explained Fritz Deininger, Vice President International Sales at Sony DADC. “Now, Sony DADC has introduced a range of central Blu-ray and DVD authoring services to all international distributors for independent movie studios. Called the ‘Blu-ray Asset Sharing System,’ this centrally co-ordinated business model brings advantages to both the content owner and the regional distributor” he continued. For the content owner as they have a single point of storage for their assets, sure in the knowledge that it is being safeguarded by the industry leader in asset management. Having a central location at Sony DADC, going forward, digital distribution services can be easily provided. Sony DADC is also providing any world wide digital distribution needs. Furthermore, a single point of contact reduces their administrative burden and makes life simpler and more rewarding. 6 The content owner retains complete control of their assets and can make certain that their title has the same look and feel, irrespective of which territory it is being distributed in. Distributors identify real cost savings There are significant advantages for the distributor: for instance, major cost savings provided by this new asset sharing model – both in terms of input costs, such as film and authoring, as central authoring creates a template that can be easily localised. Additionally, there is simplicity in this model: Sony DADC provides a true one-stop-shop for Blu-ray and DVD regionalisation, making the whole process easier to oversee. Furthermore, with as Europe’s premier Blu-ray production network and easier access to content, Sony DADC offers valuable time saving, meaning that distributors can have their titles on the street earning revenue in the shortest possible time. Blu-ray Sales Contact International Sales marcel.hasenrader@sonydadc.com | Phone: +43 6246 880 554 friedrich.deininger@sonydadc.com | Phone: +43 6246 880 504 the insider Last, but by no means least, distributors will be freed of the need to arrange AACS and BDA agreements since within this business model, this requirement is fulfilled by the content owner. Newline is one independent movie studio that has been swift to recognise the potential this system offers and so have its key territorial distributors, such as Eagle Pictures, one of its distributors in Italy. “Through the Asset Sharing System, it has become easy and cost effective to order our local versions of major independent Blu-ray releases,” commented Luisa Bonalumi, Marketing Manager, Eagle Pictures. “Sony DADC looks after the authoring, approvals and replication. We just send our language track – everything else is taken care of.” Download report Digital Copy: New report identifies 42M Euro market in UK * Digital Copy – an intelligent digital rights mechanism that enables users to legally copy a digital file of movie content from a disc to a range of portable players – is tailor-made for today’s mobile lifestyle. With Digital Copy, you can choose exactly how, where and when you will watch your favourite movies. It has been available in the U.S. since last year and it has taken that market by storm. So much, that today the main Hollywood studios incorporate it as a mainstream feature on many new releases in both Blu-ray and DVD. But will this technology have the same appeal in Europe? The finding of a market research report commissioned by Sony DADC in the UK and carried out by TNS World Panel is a resounding ‘yes’. After polling more than 3,000 UK consumers this spring, TNS discovered a potential market of over 1.6M consumers willing to buy into this technology over the coming 12 months. This, TNS predicts, could create new revenue streams in excess of 42M Euro in the UK alone, indicating that on a pan-European scale this could be a very significant new market for the home video industry. Initially, the report identifies two prime markets in technically savvy families and the traditional technology early adopter market segment. These consumers tend to be online shoppers and TV is a big growth opportunity for this market. Despite their relatively high ownership of video iPods, video enabled phones and PSPs, PCs and notebooks remain the number one destination for downloads. The importance of one-click-ability However, the report has revealed one weak point in the traditional form of Digital Copy: it requires the user to key-in a 25 digital alphanumeric code to access the digital file on the disc. This, so TNS World Panel reports, can be a major stumbling block to the system’s mainstream acceptance. Now, Sony DADC has developed a refined version of Digital Copy which integrates it alongside the company’s PID system. The beauty of Sony DADC’s Digital Copy with PID lies in its simplicity. PID is Postscribed ID technology, which is applied to each disc during the manufacture process. The PID is automatically read by the player and does away with the need for cumbersome serial codes. Digital Copy with PID is applicable to a range of disc formats, including DVD and Blu-ray Disc. The instructions stored within the PID are defined by the publisher: the end-user is free to make as many copies of the content as the publisher prescribes. So, at the click of a mouse, the consumer can copy the movie over to a laptop hard drive or many other media storage devices. Intelligent feedback of media consumption patterns to the publisher Digital Copy with PID comes with eBridge Analytics, a Sony DADC online platform that shows detailed statistics about the usage of Digital Copy. This means that once the consumer has opted into this system, each disc can be identified and the user’s media usage can be tracked and interpreted accurately via an internet connection. “Digital Copy with PID combined with eBridge Analytics, fulfils two major needs of today’s home entertainment marketers: to get valuable feedback about their consumers’ preferences as well an opportunity to differentiate their product in a retail environment,” commented Sonja Hauck, Product Manager Video at Sony DADC. “Digital Copy with PID provides a ‘best in class’ Digital Copy experience for both consumers and publishers.” Download report www.sonydadc.com/digitalcopy *This forecast is explained by three factors. Firstly, Digital Copy adds value to packaged media and will prevent price erosion, instead stabilising disc prices. Another result of this perceived added value is a significantly increased number of impulse purchases. Thirdly, Digital Copy with PID provides a direct link to consumers with registration data - such as email addresses - available, which can be used in e-mail marketing to increase sales. Sony DADC creates eBridge to green energy Developed by Sony DADC, eBridge is a unique discbased concept that fuses traditional direct mail and digital media to close the gap between offline and online marketing communications. In Germany, this revolutionary system has been used by green power supplier, ENTEGA, to promote the many advantages of green electricity. The beauty of eBridge is that each component is completely personalised. Each CD-ROM is equipped with a unique identifier that includes the recipient’s name and residence. So, after an engaging film intro that looks at climate protection, recipients are seamlessly directed online. Thanks to eBridge, the web server recognizes who is online and provides them with a tailored rate comparison that enables them to calculate what kind of savings they could expect by signing up to ENTEGA’s Product Manager Video Contact for Digital Marketing Solutions sonja.hauck@sonydadc.com | Phone: +43 6246 880 81622 christian.dankl@sonydadc.com | Phone: +44 20 7307 9773 special Climate Protection Promotion Rate. This means higher engagement and thus higher response rates. Conceptualised by Frankfurt-based agency OgilvyOne, the 770,000 unit campaign used targeted direct mail, as well as being inserted in daily newspapers and as a point of sale promotion. Besides ENTEGA, eBridge is increasingly used by energy providers to promote their green initiatives, like EDF in France or German industry energy provider Watt. the insider 7 Distribution services: European news Enfield, UK Integrated customer service launched a pilot tion centre, Sony DADC has Based at its Enfield distribu ply chain service sonal perspective to the sup project that provides a per that enjoy a deNetwork are two customers challenge. 2 entertain and ribution services for both production and dist signated point of contact within the Sony DADC team. better integration anced service provision and This approach assures enh e, it reduces the ply chain. At the same tim between the steps of the sup are handled by the e all co-ordination activities workload on publishers sinc Sony DADC contact. Moissy, France New French joint ve Borås Enfield nture selects Son y DADC Established as a gr een field site in 20 07, Sony DADC’s undergone further Moissy distributio investment and ex n centre has pansion of headco mand for its integ unt to meet the rated supply chain strong deservice. Its latest customer win sees a new joi nt venture that ac French home vid counts for around eo market formed 20% of the from Sony Picture and TF1 Vidéo se s Home Entertainm lect Sony DADC. ent France Sony DADC will pr ovide a full supply chain service, inc administration fa luding a compreh cility. This will enab ensive retail le major efficiencie tegrated services s and synergies, pr that were previou oviding insly carried out wi and creating a sta thin each joint ve te-of-the-art distri nt ur e member, bution network fo “Our aim is to be r this ambitious ne an interface betw w co mpany. een retail marketin rations,” commen g and the joint ve ted Camille Mag nt ur e’s opero, Managing Di France. “As a ne rector Sony DADC xt step we intend Distribution to provide intrane similar to those we t solutions for ou offer in Scandinav r customers ia.” Contact for Distribution Services thomas.irnberger@sonydadc.com | Phone: +43 6246 880 250 8 the insider Moissy Milan Borås, Swed en Home deliveri es for premier Nordic online retailer Based in Malm ö, Sweden, C DON is the N a leading play ordic region’s er in the regi leading online on’s dynamic ny has signed retailer and ho me entertainm a partnership ent market. Th agreement w Scandinavia (E e compaith Sony DAD NS). From next C’s Entertainm March, ENS w ent Network to households ill sh ip around 8M tit in the Nordic re les each year di gion. “We were look rectly ing for a stro ng partner th business,” expl at ca n support future ained Mikael O lander, CDON growth within is significantly ’s MD. “The re our changing. Spec tail landscape ial music stores in the Nordics mon, leading in smaller tow to an increasin ns are becomin g focus on on ties and their g less comline retail. ENS IT distribution ha s huge warehou system enable for CDs and M se capacis fast access to usic DVDs are our products. picked, packed Online orders “ENS was alre an d sh ip ady an interm ped to consum ediary supplie ers the same da ment, Sony DA r for CDON. W y.” DC for the first ith this distrib time distributes from a faster ution agreedirect to consum access to the ers and CDON labels’ music or ging Director benefits der books.” st of ENS. ated Stig Inge lström, Mana- Milan, Italy Sony DADC well equipped to offer full supply chain service no a co-operative partnership with Silva Sony DADC Italia has announced Chiapparoli Logistica SPA. loroli’s market leading distribution and This agreement combines Chiappa cation order desk, order-to-cash and repli gistics network with Sony DADC’s sed solution for Italian customers. services to create a customer focu , we pparoli’s distribution centres in Lodi “When we first visited one of Chia etits efficiency” explained Massimo Bold were impressed by the facility and oli C in Italy. “We believe that Chiappar ti, Sales Representative for Sony DAD to The strength of our joint offering perfectly complements our services. s the front office services and IT solution customers lies in the combination of class distribution and logistics.” of Sony DADC and Chiapparoli’s first New retail services in the UK In the UK, Sony DADC has created a team, headed by Andy Palmer that is aiming to get closer to the retailers’ needs. Already, the team has instigated a number of new initiatives aimed at driving down supply chain costs for both content publishers and retailers. Shelf ready packaging applied at the distribution site can produce up to a 10% increase in product exposure. It means the product literally goes directly into the shelf. The retailer saves on staff time since they no longer have to sticker, tag or put the products into safer cases. This frees them for other tasks, such as filling empty shelf space and serving their customers with the resulting uplift in sales. Another initiative is consolidated returns management. Whilst content publishers normally provide retailers with a privilege returns allowance in the region of 10% of invoice value the process of sending back returns to each publisher and reconciling credit notes can be time consuming. Now, retailers place all the returns in a single container which is returned to the Sony DADC distribution centre. The stock is sorted in bulk to be returned to the original supplier, re-worked or sent for destruction. Sony DADC staff finalise the process by raising the credit notes to the retailer. A number of Sony DADC services have been developed with environmental sustainability in mind. Automated packaging and reusable plastic totes help to lower the carbon footprint. Also, a recent study by AlixPartners indicated that Sony DADC’s network is strategically positioned close to the major urban areas and hence close to the main retail centres, requiring the shortest transport and thereby minimising CO2 emissions. Often simplest is also most efficient: most stores order on a daily basis – sometimes as few as 10 units. Now, under the banner of supply chain simplification, Sony DADC bundle these orders into 2 or 3 weekly deliveries, so retailers save transport costs and staff time, while content owners reduce their distribution costs. the insider 9 Special Packaging Sourcing from China Products manufactured in China are being exported worldwide – from toys to garments, Chinese manufacturing skills are diverse and high quality. Also, abundant supplies of skilled labour means that they can offer some of the shortest turnaround times for new product development. An area where Chinese suppliers have excellent knowledge and experience is specialised packaging products. These range from extruded plastic to metal, wood and rigid board materials. With the strategy of tapping into these special packaging resources, Sony DADC has established dedicated purchasing teams in Shanghai, Hong Kong and Shenzen. Through these teams, the company can source at local Chinese suppliers and build close relationships with the main special packaging facilities. “Our purchasing teams have the advantages of local language skills, a full understanding of Chinese business culture, protocols and etiquette,” explained Günther Contact for Packaging Solutions thomas.friedrich@sonydadc.com | Phone: +43 6246 880 196 10 the insider Leitner, Manager Printwork and Components at Sony DADC. “They carry out comprehensive quality checks for hazardous materials and make sure that the highest European & Green quality standards are attained. Moreover, our dedicated teams can provide for the fastest possible shipment conditions.” Already, Sony DADC has completed a number of titles with special packaging sourced from China. The results have exceeded expectations – on top of the high quality and environmental considerations, the Euro-Chinese partnership has yielded cost savings of up to 50% for Sony DADC’s customers. ARccOS - 360° content security for your video assets A large and growing audience is consuming content of video titles for free – by illicitly copying, ripping and downloading it. This is a great cause of concern to many publishers: however when viewed in a different way, the issue presents a new and large potential market for publishers. These viewers are expressing interest in content and if guided and persuaded in the right ways, they can become valuable paying consumers of a publisher’s product. Developed by Sony DADC, ARccOS is one of the best established and developed DRM solutions on the market. It forms the focal point of the company’s strategy to turn would-be pirates into paying customers. Now, in a strategic move designed to take the system’s capabilities to a new level, Sony DADC has teamed up with Peer Media Technologies. Whilst Sony DADC is the world leader in disc-based DRM solutions, Peer Media Technologies brings a wealth of knowledge and experience in the online sector. Together, the two companies can provide a 360° content security solution for video assets. Carefully designed and externally audited processes in all steps of the supply chain and for all interfaces ensure that the risk of high quality content leakage is minimal. Online video security When combined, ARccOS and Peer Media Technologies’ services offer a co-ordinated and comprehensive challenge to the piracy threats that are found on the internet. Also, they can provide valuable statistical reporting to clients regarding the extent of the piracy threat. “By combining disc-based and online services, we support our customers in addressing all the aspects of piracy on many different levels,” remarked Dominik Engel, Product Manager Video DRM at Sony DADC. “Sony DADC is confirming its commitment to help customers worldwide to grapple with the complexities of protecting their works in both physical and digital forms by completing our security offering. “Through partnering Peer Media Technologies, we can offer a single 360° solution for content security that inhibits piracy on all levels. This comprehensive solution is the most effective way to persuade casual pirates – home copiers as well as downloaders – to become paying customers,” he continued. Sony DADC's 360° content security solution addresses all aspects of piracy ARccOS for Blu-ray In other news from this business team, Sony DADC has responded to demand for a dynamic DRM solution for Blu-ray, similar to ARccOS for DVD, with frequent updates. This development comes against a background where industry insiders are claiming that existing DRM mechanisms for Blu-ray have been circumvented and even the system updates fail to provide the necessary level of protection. New from Sony DADC, ARccOS for Blu-ray Disc protects against 1:1 copying onto BD-R and ripping from Blu-ray Disc to an HD movie file or a standard definition format. Through full compliance with Blu-ray specifications, it assures compatibility and playability on all players, while long-term security from hackers is made possible through frequent system upgrades. Whilst protection is comprehensive, Sony DADC has kept in mind the needs of the publisher in developing this new system. It provides an easy and seamless protection workflow, meeting industry needs for fastest possible turnaround times. Furthermore, the publisher can determine the playback characteristics of a copy from no playback to garbled playback, disclaimers, trailers and even a link to the official store site, which could generate new revenue streams. “Blu-ray has the potential to revolutionise the global home video market, but to realise this potential it needs a robust and effective DRM system, which is exactly what ARccOS for Blu-ray Disc represents,” explained Dominik Engel. Disc-based DRM: ARccOS forms a focal point of the Sony DADC strategy against piracy of video content, inhibiting the unauthorized 1:1 duplication of discs. Internet intelligence and reporting P2P notices and counter measures: ARccOS and Peer Media Technologies' services are coordinated to comprehensively challenge the prevalent threats but also provide useful statistical reporting to our customers. Accredited secure facilities: Carefully designed and externally audited processes in all steps of the supply chain and for all interfaces ensure that the risk of high quality content leakage is minimal. Awareness building/legal action: To address consumer awareness of piracy, Sony DADC actively supports anti-piracy organisations worldwide and collaborates in awareness building programmes. There is of course also a legal aspect to piracy. Where necessary and appropriate Sony DADC will take up or support legal action against facilitators of piracy, such as riptool creators, first seeders and pirate sites. Product Manager Video DRM dominik.engel@sonydadc.com | Phone: +43 6246 880 8572 the insider 11 Boost software and games sales with SecuROM Today the games and software industry has become a multi-billion Euro international business. The nature and structure of software products lend themselves to digital distribution, but at the same time present unique challenges. Digital distribution provides new sales models, which are extremely effective in generating revenue streams that cost little to create and expand – models such as Try & Buy. But, the challenge facing software publishers in many markets is to enable these business models within an environment based on Digital Rights Management (DRM). A range of software companies use Sony DADC’s SecuROM DRM system to protect and market their most valuable assets. Phase-6 Square Enix Europe Phase-6 is a publisher of vocabulary training software. The company has successfully integrated SecuROM within its leading software products. “We from phase-6 are very satisfied with SecuROM because the use of this Digital Rights Management solution has increased sales considerably,” said Daniel Gorin, CEO of phase-6. “On the one hand we use it to prevent unauthorized mass duplication. On the other hand we used SecuROM to offer a trial period to potential users in order to reduce buying barriers.” Having recently acquired UK-based PC games publisher, Eidos, Square Enix Europe is a leading player in this lucrative international market. Square Enix Europe has chosen Sony DADC as its technology partner and has applied SecuROM as its DRM system to safeguard its physical and digital distribution channels for all of its PC games titles. Another key advantage for the customer in using SecuROM Product Activation is the availability of an online analytics platform, which yields valuable information about media consumption patterns within their target markets. Maximum privacy and user security: TÜV certifies SecuROM as “trusted procedure” Further SecuROM related news tells us that SecuROM has been certified as a ‘trusted procedure’ by influential German testing institute – TÜV. German data protection legislation is amongst the most stringent in Europe, so SecuROM’s TÜV approval is significant well beyond Germany. “The digital distribution channel is becoming increasingly important to a broad range of companies that are attempting to establish their products,” commented David Berka, Product Manager SecuROM at Sony DADC. “Previously there was a trade-off between security and accessibility, but no longer, with SecuROM we offer the best of both worlds. Furthermore it’s appropriate to a broad range of business enterprises from software to PC games and home entertainment products.” Oxford English Testing replaces serialised printwork with electronic DISC KEY Software security – or rather the lack of appropriate security - can be a major source of lost revenue to some organisations. If the software is not protected it can be Product Manager Software DRM david.berka@sonydadc.com | Phone: +43 6246 880 8938 12 the insider more easily copied and shared within a peer group. One solution has been to supply the users with their own unique serial key which, once typed in, unlocks the game’s security system and allow users to enter. However, this solution is not perfect: most calls to technical support lines are caused by human error mistyping serial keys into their PC. Now, Sony DADC has introduced a new and radically different approach that immediately removes this issue. The new electronic Disc Key is an invisible code which is loaded onto the data side of the disc during manufacture. The code can be read automatically by the PC, which then automatically communicates with a Sony DADC server to verify it before unlocking the game for the user. International publisher Oxford English Testing (OET) use CD-ROM’s and audio CDs as an addition to its education packages and add CDs to the workbooks. With an original disc, the student is provided with access to the company’s examination website where they can complete tests online as a part of their studies. The developers have incorporated Sony DADC’s Electronic Disc Key onto their discs which provides one-click access to the website once the disc is loaded in a PC. Once loaded, the disc provides the option of either playing the loaded material or linking directly to the OET website, where the tests are located. Clicking on the OET website button provides an open weblink that starts the website and automatically inserts an electronic code into the required field, removing any risk of mistyping or incorrectly filling the fields. Digital deliveries to Sony Ericsson’s PlayNow Arena: millions of tracks Pearl Jam create an eBridge to their fan base As reported in the last issue of "the insider", Sony DADC’s Digital Content Services team is working closely with sister company Sony Ericsson. Universal Music’s CD release of the band’s new album Backspacer sees Pearl Jam pushing back the frontiers of CD technology. Backspacer is not just a CD – it’s an eBridge CD using Sony DADC’s unique voucher number technology. One of Europe’s leading mobile telecoms companies, Sony Ericsson has meanwhile created access for customers to its online music portal – PlayNow Arena in 18 territories in Europe. Further rollouts with a global scope are prepared for Latin America and Asia Pacific territories. The platform, which is supported by the Digital Content Services team at Sony DADC, provides a wide variety of downloadable music and ringtones. The music is provided by all major and some indie record labels having a mixture of tracks on a global and local scope. Sony DADC’s Anif-based team encodes all the data and delivers the music files in all formats required to the online portal www.playnow-arena.com. This advanced music platform gives the band’s loyal fans access to a wide range of bonus content after they have registered on a special web portal. After loading the disc into an internet connected PC, the user is just one click away from a whole new world of bonus material, which is provided free of charge by the band. Fans have a choice of two free downloads from a menu of 11 Pearl Jam gigs that are hosted on the website. The album will ship globally with eBridge technology and initial worldwide volumes are very substantial. “Pearl Jam’s fans are amongst the most loyal in the industry and they have reacted very positively to this new concept,” said Gerry Kelly, Business Development eBridge at Sony DADC. “It’s a win-win scenario – the fans receive some great performance recordings and the band and record label are able to develop a deeper relationship with their fans than would otherwise be possible.” This sophisticated online conditional access system integrates Sony DADC’s eBridge analytics application, which enables a wealth of information to be automatically reported back to the client. “In today’s multimedia world, music lovers expect more than just great audio. This system exactly fits our needs and has been very well received by the band and their fans,” commented Jon Turner, General Manager, Island Records. Contact for Digital Content Services Business Development eBridge UK karl.heisler@sonydadc.com | Phone: +43 6246 880 347 gerry.kelly@sonydadc.com | Phone: +44 7775 81 61 63 the insider 13 Dieter Daum receives Global Environmental Award from Ryoji Chubachi (President and Electronics CEO, Sony Corporation) Engineering a greener future The Sony Corporation commits strongly to environmentally sustainable manufacturing and business operations. For decades the company has lead the development of practices designed to reduce manufacturing’s carbon footprint. Last year saw Sony join the WWF’s Climate Savers Initiative with a commitment to further reduce its carbon dioxide emissions by 7% before 2010. Within the Sony Group of companies, Sony DADC is in the first tier of environmentally aware business operations. This was recognised last year when the company received an Award of Excellence in energy conservation and the prevention of global warming from Ryoji Chubachi, President and Electronics CEO, Sony Corporation. Effective manufacturing remains a key focus within Sony DADC as well as energy conservation. Compared with 2000 levels, the company has reduced energy consumption per disc produced by 5%; CO2 emissions have fallen by 94% and water consumption per disc produced has fallen by 10%. New initiatives include the modification of production equipment for optimised energy use, waste heat recovery and re-use in heating systems and water saving technologies in mastering & replication. Another major initiative is ground water cooling at the Anif site near Salzburg. The area is rich in water resources and Sony DADC conducts a lot of measurements to ensure of the safe sourcing the ground water and uses it for cooling during the manufacturing processes. Since 2001, this system has created CO2 savings of over 6 tonnes and saved 33M kWh of energy in Anif. After the success of this project, Sony DADC is extending the energy saving measure to additional manufacturing Contact for Green Manufacturing maria.bauer@sonydadc.com | Phone: +43 6246 880 8018 14 the insider sites. Currently, the company is introducing ground water cooling in Thalgau as well. On top of this, almost all of the waste produced by Sony DADC is recycled, in addition to a major reductions in the generation of waste throughout the company’s operations. State of art facilities powered with hydroelectric energy Perhaps the most impressive CO2 reduction has occurred through Sony DADC’s decision to implement 100% renewable energy sources, which once again harness the abundant water resources around the production site. “Our drive for environmentally sustainable business practices is not confined to the production plant,” commented Maria Bauer, Environmental & Sustainability Officer at Sony DADC. “Every employee needs to be aware of the need to save natural resources. Earlier this year we set another target to achieve a further 10% energy reduction within the office and administration areas. We believe this will save a further 170,000 kWh of energy each year, as well as around 650,000 sheets of paper.” Finally, Sony DADC has developed a number of environmentally friendly packaging systems for its products. Bend-it Green and eco-boxes (lightweight and thus material saving) are two systems which have proved very effective in reducing carbon footprint without compromising the quality of the final packaged media product. Carbon Footprint Savings of more than 50%* Bend-it Green – the Eco-Packaging Line by Sony DADC n 100% recycled or 50% recycled or FSC/PEFC certified material n easy to use (bend out disc holder) n no use of plastic n cost efficient n short leadtime avail a CD a ble for n one d d DVD, is mult c and i disc versi ons rd Music Industry Green Mark Awa er by Julie's Bicycle** Winn Sony DADC | Sonystrasse 20 | 5081 Anif/Salzburg | Austria | Phone: +43 6246 880 555 | sales@sonydadc.com | www.sonydadc.com Bend-it Green | Patent Pending *vs. tray-based packaging solutions **a non-profit company established to find ways to reduce the UK music industry’s greenhouse gas emissions Insider0209 Sony DADC · Sonystrasse 20 · 5081 Anif/Salzburg · Austria · marketing@sonydadc.com · www.sonydadc.com Sony DADC Distribution Network Europe Sony DADC Sales Network Europe United Kingdom • Ireland Sony DADC United Kingdom Kent House 14/17 Market Place, 5th floor London W1W 8AJ United Kingdom Siegfried Obermayr Phone: +44 20 7307 9771 siegfried.obermayr@sonydadc.com Robert King Phone: +44 7919 330 734 robert.king@sonydadc.com Paul Bishop Phone: +44 2920 69 27 66 paul.bishop@sonydadc.com Gerry Kelly Phone: +44 7775 81 61 63 gerry.kelly@sonydadc.com John Morrissey Phone: +44 1420 47 00 45 john.morrissey@sonydadc.com Austria • Czech R. Slovakia • Slovenia Croatia Alexander Schwab Phone: +43 6246 880 570 alexander.schwab@sonydadc.com Benelux Toon Bressers Phone: +31 40 251 25 06 toon.bressers@sonydadc.com Germany • Switzerland Urs Staubli Phone: +41 71 860 06 20 urs.staubli@sonydadc.com Christian Adam Phone: +43 6246 880 660 christian.adam@sonydadc.com Christoph Diekmann Phone: +49 221 510 70 90 christoph.diekmann@sonydadc.com Greece • Cyprus • Macedonia Bulgaria • Turkey Poland • Latvia • Lithuania Lukasz Zwolinski Phone: +48 661 02 0000 lukasz.zwolinski@sonydadc.com Nordic Territory Sony DADC Copenhagen Office Sluseholmen 2-4 2450 Copenhagen Denmark Jesper Schertiger Phone: +45 7070 27 25 jesper.schertiger@sonydadc.com Michael Persson Phone: +45 3694 46 31 michael.persson@sonydadc.com Sony DADC Stockholm Office Gåsgränd 3 111 27 Stockholm Sweden Matilda von Bahr Phone: +46 8 442 92 06 matilda.von.bahr@sonydadc.com Roger Twynham Phone: +44 7768 00 48 55 roger.twynham@sonydadc.com Yannis Saoulis Phone: +30 6977 227 837 yannis.saoulis@sonydadc.com France Hungary • Romania Sony DADC France 140 rue Gallieni 92100 Boulogne Billancourt France Phone: +33 164 13 82 60 ulrike.lombard@sonydadc.com Istvan Zakarias Phone: +36 30 950 50 29 istvan.zakarias@sonydadc.com Leif Ellsäter Phone: +46 763 060 012 leif.ellsater@sonydadc.com Italy Russian Federation Massimo Boldetti Phone: +39 02 3658 6005 massimo.boldetti@sonydadc.com Sony DADC Russia Prospekt 60-letiya Oktyabrya, 9, bldg 2, office 506 117312, Moscow Russia Bertrand Levavasseur Phone: +33 164 13 82 41 bertrand.levavasseur@sonydadc.com John Mathews Phone: +33 231 37 50 50 john.mathews@sonydadc.com Simon Holpert Phone: +33 164 13 82 43 simon.holpert@sonydadc.com Spain • Portugal Susanne von Bahr Phone: +34 91 409 64 86 susanne.von.bahr@sonydadc.com Stig von Bahr Phone: +34 91 575 74 03 stig.von.bahr@sonydadc.com Kristoffer Ellsäter Phone: +46 763 250 187 kristoffer.ellsater@sonydadc.com Alexey Ugrinovich Phone: +7 985 760 69 46 alexey.ugrinovich@sonydadc.com Other European countries sales@sonydadc.com Phone: +43 6246 880 555 Sony DADC Distribution UK 6 Solar Way Innova Park off Mollison Ave Enfield Middlesex EN3 7XY United Kingdom Phone: +44 1992 65 7688 darren.houghton@sonydadc.com Sony DADC Distribution France Bâtiment n° 4 Le Parc Prologis Chanteloup 77550 Moissy-Cramayel France Phone: +33 1 64 13 82 11 camille.magro@sonydadc.com Sony DADC Distribution Germany Waldstraße 37 63128 Dietzenbach Germany Phone: +49 6074 498 100 michael.hechler@sonydadc.com Sony DADC Distribution Italy Silvano Chiapparoli Logistica Spa Livraga "Deposito Livraga 2" Via Cascina Nuova 26814 Livraga (LO) Italy Phone: +39 0377 986 450 dina.neto@sonydadc.com Sony DADC Distribution Spain Avda. Olímpico Fernandez Ochoa s.n. Poligono Urtinsa 28925 Madrid Spain Phone: +34 91 59 68 487 jesus.valenciano@sonydadc.com Sony DADC Distribution Nordics Entertainment Network Scandinavia AB Viaredsvägen 24 504 94 Borås Sweden Phone: +46 33 20 61 01 stig.ingelstrom@sonydadc.com