“80% of recorders will become Blu-ray Disc next year” Mr. BD said of their promotion strategy.

Blu-ray Disc (BD) won the battle against HD-DVD for Next Generation DVD. One of the leaders of that battle is a man called “Mr. BD.” That is Mr. Masayuki Kozuka, a general manager in charge of the storage device strategy at Matsushita Electric Industrial Co., Ltd. He also serves as chairman of the Blu-ray Disc Association (BDA). We interviewed him about the forecast for the promotion of BD and the strength of Matsushita’s products.

The prevalence of the BD drive and recorder will be increase in 2008

―Why is Matsushita focusing not only on the BD recorder but also the BD drive for PC?

The answer is that the market of built-in BD drives for PCs is very large. People may know little about this point. Many people ask me, “Since they have the PS3, I can understand that why Sony is focusing on BD, but why is Matsushita also focusing on BD?” Because the market of PC drives is bigger than video game consoles. The DVD drive market is ten times larger than the video game console market. Therefore, the shipment of BD drive for PCs will overtake PS3 soon (5.5 million PS3 were shipped in March 2007). The BD drive for PCs is a very important product for us to gain profit.

―What is the strongpoint of Matsushita’s BD drive?

Our products have high quality and are also reliable because we make them ourselves from development to production. Therefore, most PC makers have adopted our BD drive and we took the top market share in the world. Japanese makers have a lead over foreign makers in optical disc. I think that Korean or Taiwanese makers will make progress in this area but we still have a big advantage.

―What do you think about the popularization of the BD drive and recorder?

BD is surely going to spread this year. BD drives for PCs will ship about 8 million units worldwide. With special demand of the Beijing Olympics, BD recorders also shipped over 2 million units at yearend. The retirement of HD-DVD will also help the popularity of BD.

Earnest effort can move Hollywood.

―The approval from major Hollywood studios influenced the result of the next generation DVD battle.

It is nonsense to say that we paid the studios a reward for their approval. In the case of Disney, BDA, including Matsushita, picked up their requests honestly and incorporated them into BD’s standard. We also made three types of copyright protect technology for Twentieth Century Fox Film because they are very sensitive about that issue. Through these kinds of approach, we established reliable partnerships with them. That is why they support BD.

In the past, while we were selling DVD, Hollywood said that, “You have to pay us some fund to promote DVD.” However, during yearend sales, Disney and Twentieth Century Fox paid for BD advertisement and we, the makers, also joined the promotion with them. We were very surprised that film studios paid out of their pocket to promote BD.

If web-casts spread, the supremacy of BD will continue

―Will web-casts become the BD rival?

People often say that BD won against HD-DVD but will lose against web-cast. However, Hollywood studios prefer “Package Media” like BD. In the United States, movies are infrequent because they only produce 400 in a year. Movie studios want to sell them steadily and the best media format is BD. For example, when Disney released their Snow White in “Disc” format, it sold 2 million copies at WAL-MART in a week. There is no computer server where people can download 2 million times in a week. It is impossible.

Books, Movies and Video Games are the representatives of “Longtail,” an important factor of Internet shopping. However, each way of selling is different. Movies and Games cost ten billion yen to produce. Makers promote their products to sell a million as fast as it can. Web-cast is not suitable for these kinds of products. I do not to deny the importance of web-cast because we also have a service that distributes movies named “acTVila,” but when we consider the present situation, “Disc” is more main stream than Web-cast.

―What is the future principle of BDA?

In the domestic market, the percentage of recorders converting to BD will be 80% next year and will be 100% by 2010. Competition between makers will gradually increase. For the international market, there are many areas where only DVD recorders are available. Therefore, I think makers have to incorporate the spread of BD into these areas.

―What is the position of BD in Matsushita’s digital products?

We want to make BD equal to High Definition. Korean or Taiwanese makers may chase us but we have better technology than them. To continue our dominance, we always try to do our best.