Packaged Media and. Beyond Conference. Blu-ray Status Update April 20, 2012 Victor Matsuda BDA GPC Chair

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1 Packaged Media and Beyond Conference Blu-ray Status Update April 20, 2012 Victor Matsuda BDA GPC Chair

2 BDA GPC Key Activities Continued PR outreach Participation in key industry events Maintaining the main BDA website as well as consumer websites in 4 regions BDA Member Seminars (Japan) Retailer activities Coordination and support of national promo activities (EU) Efforts for social networking activities

3 Agenda Key Metrics Key Topics Key Activities

4 U.S. Hardware Growth*+ Over 36 million US households (roughly 1/3) are now Blu-ray households The number of Blu-ray Disc households increased by nearly 40% over 2010 HDTV penetration is now nearly 75 million US households U.S. 3D Hardware* Initial 3D TV adoption rate exceeding that of HDTV By 2013, virtually all Blu-ray players sold will be 3D capable By 2014, over half of all TV's sold will be 3D capable U.S Software Growth+** Software unit sales grew by over 30% in 2011 Blu-ray accounted for 40.1% of disc sales of the Top 10 titles released in 2011, up from 27% in 2010 Consumer spending on software surpassed $2B for the first time ever U.S. 3D Software* 3D title sales increased by tenfold in 2011 In 2011 the number of 3D titles available increased to 89, as compared to only 31 in 2010 (58 released in 2011) *FutureSource Consulting ** Digital Entertainment Group +IHS ScreenDigest

5 Research Data Update April U.S. software sales (as of March 2012): 27.2 million BD discs sold YTD, a 37.8% increase compared to the same period in 2011 (17.6M); DVD down 4.9% YOY Hardware installed base for end of 2011: 36.3 million Blu-ray households* including PS3, a 42.3% increase over the same point in 2010 (25.5M); 76% set top vs. 24% game-only Screen Digest hardware projection for end of 2012: Hardware installed base projected to reach 51.7 million (46%) U.S. households by end of 2012, representing 42% growth over 2011 *Note: Households numbers include multi-player homes

6 BD Market Overview - USA BD Player Growth Blu-ray PS3 PS Homes Owning BD Players BD-Video Title Sales % 40% 30% 20% 10% 0% Blu-ray PS3 PS4 46.3% 42.1% 35.2% 37.9% 30.7% 23.9% 17.0% 14.0% 14.9% 14.4% 12.8% 10.3% 11.6% 12.0% 2.1% 5.2% 8.6% 7.6% Household Saturation (%) Sales (M Units) source: FutureSource Consulting

7 Forecast- U.S. Moderate growth in BD player market; approx. +9% in 2012, +6% in 2013 More than 37% penetration by 2012, more than 42% penetration by 2013 Significant growth in BD movie market; approx. +23% in 2012, +21% in 2013 *FutureSource Consulting

8 BD Market Overview Western Europe* BD Player Growth Blu-ray PS3 PS BD-Video Title Sales % % 0% Sales (M Units) 25% Blu-ray PS3 PS4 23.4% 21.3% 20% 15% Homes Owning BD Players 18.4% 15.0% 11.3% 10.7% 10.5% 8.8% 8.7% 11.7% 11.6% 8.1% 7.6% 6.6% 5.6% 4.3% 1.1% 3.0% Household Saturation (%) source: FutureSource Consulting * Data relates to top 16 European markets.

9 Forecast- Europe Moderate growth in BD player market; approx. +20% in 2012, +12% in 2013 More than 19% penetration by 2012, more than 23% penetration by 2013 Significant growth in BD movie market; approx. +30% in 2012, +26% in 2013 *FutureSource Consulting

10 2011 Japan key metrics More than 90% of BD/DVD recorder market is Blu-ray, and Blu-ray recorders sales were approx +50% vs. PY More than 40% of PC market is Blu-ray Approx ¼ of blank media market is Blu-ray Approx ¼ of packaged media market is Blu-ray, and Bluray movies sales were approx +35% vs PY

11 2012 Key topics Blu-ray and digital distribution Recordable Blu-ray

12 Blu-ray Disc - Ultimate Ownership Blu-ray Disc is the ultimate way to own a movie The best HD home theater experience Maximum flexibility to stream and download to multiple devices Digital extensions (Digital Copy, UV, etc.) enhance the ownership experience of owning a Blu-ray title

13

14 While online transactions are growing, 2012 movie revenue: Physical $11.1B, online $1.7B* 2016 movie revenue: Physical 75%, online 17%* * IHS Screen Digest

15 2012 Key topics Blu-ray and digital distribution Recordable Blu-ray

16 Billions of Photos and Video Clips At Risk Consumers are accumulating large libraries of digital photos and video clips More than 20 billion photos taken yearly in U.S.* HD video capture is now a common feature Photos are often stored on a single hard drive or on Internet photo services Unlike film and videotape, digital content has no physical media to fall back on *Source: Photo Marketing Association

17 Not Just a Theoretical Problem Moms who blog told us about their experiences with lost photos

18 Recordable Blu-ray Offers a Solution Removability & Compatibility: Blu-ray Disc offers 25GB and 50GB recordable media options for use with players Stability: Blu-ray is a highly stable consumer publishing format that will be around for many years Inexpensive: Cost per gigabyte is very low (approximately $.07 per GB for write-once BD-R discs on 25-disc spindles) Accessibility: Allows photos and HD videos to be enjoyed on HDTVs via Blu-ray players (home theater vs. computer) Easy to Share: Discs can be distributed to others at very low cost

19 Example of BDA Outreach: 2Wired 2Tired Authoring of BD Disc on PC Final result: Playback on BD Player

20 An Elegant and Effective Solution Recordable Blu-ray Disc offers two simultaneous solutions to an insidious problem: A backup method that also allows inexpensive duplicate storage in offsite locations A way for personal photo and video content to be enjoyed by more people on HDTVs

21 China: China Consumer Electronics Fair April 10-12, Shenzhen BDA participation strongly supported by CVIA Prominent booth featuring 9 Chinese exhibitors (TCL, Desay, GEIC, Hualu, Seastar, Juda, Malata, Sansui, Hualu Publishing, and 5 foreign exhibitors (Sony, Panasonic, Philips, Pioneer, Sony DADC) Media interviews

22 Virtual Roundtable

23 The 18 th BDA JAPAN Seminar Date: Nov. 16 th 2011 Venue: Tokyo, Japan (Meguro-Gajyoen) Enrollment:148p (126p) * ( ) : previous seminar s data Attendance :126p (109p) Attendance Rate :85% BDA CONFIDENTIAL

24 The 18 th BDA JAPAN Seminar Agenda BDA Activity Report 1) JTC report 2) Compliance Committee Report 3) Promotion Committee Activity Report - Official Website, - Collaboration with JRIA Special Session Invited Special Speech #1 Market analysis report by GfK Japan Chief editor s presentation Kinema-Junposha s Session 1. Consumer research/analysis report and suggestions to the industry 2. Panel discussion Big-name creators and analyst Invited Special Speech #2 Yearend speech by popular AV Analysts According to research, the most efficient way to promote BD is users real experience. From that point of view, limited line-up of BD titles at rental shops is one of the biggest problems. Also, the poor line-up for some categories such as music or Japanese movies is the other reason why BD market in Japan is still small. BDA CONFIDENTIAL

25 DEG Japan / BDA Joint Brochure Size: A5 (210mm 148mm, same size as the previous one) 2. Number of pages: 44 pages 3. Circulation: 500,000 copies 4. Distribution: approx. more than 5,000 shops of electronics retail stores and CD stores around Japan. 5. Distributed to stores on Middle of November. Participant companies Hollywood studio/japanese content companies : 16 companies Hard manufactures : 2 companies Other companies : 1 company Total 19 companies BDA CONFIDENTIAL

26 3 Big Promotional Items on brochure Blu-ray3D Combo products Catalogue titles Combo means BD/DVD package. BDA CONFIDENTIAL

27 Blu-ray Moments coverage

28 Blu-ray Disc Reporter

29 Blu-ray Disc Reporter

30

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