A report by TNS Worldpanel and Sony DADC highlights the growing significance of digital copy technology in the home entertainment market, bridging traditional media and digital distribution. It reveals that digital copy users, predominantly tech-savvy families and early adopters, are valuable consumers who prefer a convenient one-click unlock mechanism for transferring content. The report suggests that with appropriate pricing, the digital copy market could see an increase of £36 million in the UK over the next year by attracting an additional 1.6 million buyers.

1. Fueling the demand for Digital Copy
A new report from TNS World Panel Entertainment & Sony DADC
Digital CopyTM is a certification mark of DEG:
The Digital Entertainment Group

2. Contents
Preface 2
Executive Summary 3
Survey Results
What has the research discovered? 4
Market dynamics 6
Who are potential Digital Copy consumers? 9
How do consumers rate the traditional Digital Copy experience? 13
How do users view their Digital Copies and what type of content do they watch? 16
Appendix
Sony DADC's Digital Copy with PID 18
About Sony DADC 18
1

3. Preface
Today, consumers have a far greater choice of entertainment Traditional packaged media has an almost unknown audience.
formats. From traditional DVD, they can upgrade to High De- Now, for the first time, Digital Copy with PID and eBridge Ana-
finition Blu-ray, while the market is moving towards Video on lytics enables consumers to register and develop a relationship
Demand and Digital Downloads in the future. based on permission marketing with the content publisher.
Companies need a multi format strategy and a clear migrati- The first step in building a new business model that integrates
on path from traditional packaged media today to a range of this revolutionary technology is to get to know your market and
packaged and electronically distributed media channels in the your customers. This report outlines a key market research pro-
future. ject which Sony DADC commissioned from TNS Worldpanel.
Digital Copy is a key technology in this change process since It makes interesting reading. Enjoy learning about this exciting
it creates a bridge between packaged media and consumers’ new business opportunity.
increasingly mobile lifestyles. It empowers consumers: enabling
them to watch their favourite movies exactly when, where and
how they wish.
At Sony DADC, we have made Digital Copy a key development
focus. We believe that in developing Digital Copy with PID and
eBridge Analytics, we have created significant and unique ad-
ded value to this key technology.
As Digital Copy establishes itself in Europe, we invite content
owners and publishers to work with us. Together we can add Christian Dankl Lucy Burton
significant value and new revenue streams to the home enter- Head of Business Development Consumer Insight Director
tainment market. Sony DADC TNS World Panel Entertainment
2

4. What is Digital Copy?
Digital Copy – an intelligent form of Digital Rights Management user to input a 16-25 character alphanumeric key before the file
(DRM) which enables file transfer to other devices - is taking the transfer will happen.
home video market by storm.
Will content publishers benefit from a new enhanced form of
Whether the original content is on a standard-def DVD or in Digital Copy? Yes, it offers major opportunities to extend the
high-def Blu-ray Disc, Digital Copy fits into our increasingly lifecycle of packaged media; it creates a neat bridge to digital
mobile lifestyles, where more time is spent viewing content on media and it offers extended marketing opportunities such as
devices other than TVs. email marketing and cross promotions, which have not been
exploited by traditional forms of Digital Copy.
The success of Digital Copy in the U.S. is illustrated by its wi-
despread adoption by the major studios where it has become a Digital Copy with PID is a new and radically different applica-
mainstream feature of many new releases in both Blu-ray and tion of this DRM technology. It provides all of these facilities for
DVD. publishers, plus it provides consumers with a one click unlock
mechanism that enables them to transfer digital content files
Why is it important to consumers and the Home Enter- from their disc to a host of different portable devices.
tainment industry?
In the UK, Digital Copy with PID provides an opportunity to
Will it be influential in shaping the future development of the place the Home Entertainment on a renewed growth path.
Home Entertainment market? Yes, it could have an immediate
impact of adding around £36 million to the UK market during A major research project from TNS Worldpanel
the next 12 months, and enables publishers to construct their
own unique customer database. In order to confirm its potential, Sony DADC commissioned a
major research project from TNS Worldpanel. It looks at con-
Are UK consumers interested in portable media consumption sumer perceptions – who is interested in this technology and
– yes, devices such as notebooks, PSPs and iPod are having a what is its potential to shape the industry. This report outlines
significant effect. the project’s key findings.
Is there room to improve on the traditional form of Digital
Copy? Yes, despite its undoubted success, Digital Copy does
still have its Achilles heel – in its traditional form it requires the
Copyright © 2009 Revolver Group. All rights reserved.
3

5. Executive Summary
Carried out by TNS Worldpanel, the research which polled 3,000 consumers during April and May has provided a valu-
able insight into UK consumers’ increasing on-the-move lifestyles. Among the study’s key findings are:
n Digital copy buyers are valuable to the DVD market, so it is n The current 25 digit code used within traditional forms of
worthwhile ensuring their needs are met. Digital Copy could be a barrier to further expansion to a
more mainstream audience.
n There is potential growth of a further 1.6m digital copy
buyers over the next year, bringing in £36m of additional n The overwhelming majority (78%) of respondents felt that a
revenue to the market if the titles are priced appropriately. convenient one-click unlock mechanism would be important
to them
n There are two distinct targets – tech savvy families, and early
adopters. n These people are likely to be shopping online or in grocers,
and TV is a big growth opportunity.
n The top 3 Digital Copy genre preferences of:
n tech savvy families are Action/Adventure film, TV n Despite their high ownership of video iPods, video enabled
comedy & Children‘s animated film phones, and PSPs; PCs and notebooks remain the most
n early adopters are TV comedy, TV drama & Action/ important destination for downloads.
Adventure film
Survey Details
n TNS Worldpanel has a panel of 15,000 individuals who n The data that follows comes from this survey, but also looks
regularly record their purchasing of Home Entertainment at the general purchasing behaviour of these individuals
products, including DVDs and Blu-Ray. from the previous year
n Using our LinkQ capabilities, we contacted 3,000 of these n Our panel is the most robust and accurate way of
individuals who had previously viewed a digital copy of a contacting such individuals, and analysing their behaviour
film or TV show Field work period: April - May 2009
n We then asked them a series of questions about their
attitudes towards Digital Copy
4

6. Survey Results
5

7. Survey Results
Market Dynamics
Worldpanel believes that currently Digital Copy Viewers ac- However, this is a relatively high value market since each consu-
count for 2.7 per cent of the DVD buying population in the UK, mer spends more on DVDs. They account for 6.1 per cent of the
creating a market of 728,000 consumers. market, or in financial terms they generate £125 million.
There are very valuable consumers – spending more than twice than
average on Home Entertainment, and 130% more on video
Digital Copy viewers All DVD buyers
Total Entertainment Total Albums Total Videos Computer Games
Average spend 52 w/e 29 March 2009, digital copy viewers vs Total DVD buyers © WorldpanelTM, TNS 2009
Interestingly, 40 per cent of respondents to the survey stated
that Digital Copy was their most preferred additional feature
on a DVD.
Some of the additional spend comes from the fact they spend more
on each video they purchase than the average video buyer
Digital Copy viewers All DVD buyers
Total Entertainment Total Albums Total Videos Computer Games
Average price paid 52 w/e 29 March 2009, digital copy viewers vs Total DVD buyers © WorldpanelTM, TNS 2009
6

8. Survey Results
Digital copy viewers are more likely to buy full price DVDs than
non viewers (68% of volume compared to 58%).
They are also more likely to buy on impulse (49% of volume
compared to 45%).
So, these are very valuable consumers to the market in terms
of revenue.
When asked 37 per cent of people said that they would be
interested in buying a DVD with Digital Copy, which equates to
around 17.8 million people in the UK.
However, only 13.4 million of these currently buy DVDs. If we If 20 per cent of this target market buys the DVD or Blu-ray Disc
subtract the current viewers, this still leaves a potential market at an additional £1.50 price this would create a market of 1.6
of 12.7 million interested customers who have not seen Digital million consumers with a value of £36 million (even with ave-
Copy already. 64 per cent of these are prepared to pay £1-2 rage prices falling at a rate of 6 per cent annually).
more for digital Copy.
7

9. Survey Results
8

10. Survey Results
Who are potential Digital Copy consumers?
Digital copy viewers are more likely to be upmarket males, overwhelmingly under the age of 44.
Digital Copy viewers are more likely to be upmarket males, under the
age of 44 – the classic early adopter profile
65 - 74
55 - 64
45 - 54
AgE
35 - 44
25 - 34
20 - 24
< 20
ECoNoMiC
DE
gRoUp
SoCio
C2
C1
AB
Male
SEx
Female
Digital All DVD Digital All DVD Digital All DVD
Copy buyers Copy buyers Copy buyers
viewers viewers viewers
SEx SoCio ECoNoMiC gRoUp AgE
% Respondents vs all DVD buyers © WorldpanelTM, TNS 2009
SoCio-ECoNoMiC gRoUpS
A Professional people, very senior management in business or commerce or top-level civil servants. Approximately 3% of the population.
B Middle management execs in large organisations, principle officers in local government and civil service, owners of small businesses. Approx 14% of the population.
C1 Junior management, owners of small establishments and all others in non-manual positions. Approx 26% of the population.
C2 All skilled manual workers, and those manual workers with responsibilities for other people. Approximately 25% of the population.
D All semi-skilled and unskilled manual workers and apprentices and trainees to skilled workers. Approx 19% of the total population.
E All those entirely dependent on the state long-term, through sickness, unemployment, old age or any other reason and casual workers and those without a regular income.
Approximately 13% of the population.
They are more likely to have children living in the household.
Three or more children
Two children
One child
No children
Digital Copy viewers All DVD buyers
% Respondents vs all DVD buyers © WorldpanelTM, TNS 2009
9

11. Survey Results
Almost half the DVDs they purchase are for family viewing purposes, they are slightly more likely to make unplanned purchases,
and to pay full price.
Other
Family Use
Personal Use
Gift
Digital Copy viewers All DVD buyers
% Respondents vs all DVD buyers © WorldpanelTM, TNS 2009
In effect, there are two distinct groups of digital copy buyers – those with a family, and more traditional early adopters.
FAMily EARly ADopTERS
Both shop online and in grocers more than average
More likely to think they are Less likely to be concerned
going to have less disposable about their disposable income
income in 2009 in 2009
Both more likely to own expensive Home Entertainment
hardware than average
Portable DVD Player Blu-ray Player
Video iPod Home Cinema System
PSP Mobile with video player
© WorldpanelTM, TNS 2009
10

12. Survey Results
Both are more likely to be current downloaders – especially the families.
FAMily EARly ADopTERS
33% have paid to download 23% have paid to download
a film or TV programme a film or TV programme
to view it once (rental) to view it once (rental)
*market average 7%
20% have paid to download 18% have paid to download
a film or TV programme a film or TV programme
to keep it to keep it
*market average 5%
© WorldpanelTM, TNS 2009
Almost three quarters of their purchases are made online or in supermarkets.
Other
Internet
Mail Order
Grocers
Generalist
Total Music/Video
Specialist
All DVD buyers
Digital Copy viewers
% Respondents vs all DVD buyers © WorldpanelTM, TNS 2009
11

13. Survey Results
12

14. Survey Results
How do consumers rate the traditional Digital Copy experience?
Without doubt, Digital Copy appeals to consumers. Clear proof When asked whether they found the current 25 digit code sys-
of this can be seen in the rapid speed with which the major tem convenient, older consumers were more likely to disagree.
studios have adopted it for their new releases on both DVD and This could be a potential barrier to more mainstream adoption,
Blu-ray Disc. which could affect the additional revenue digital copy could
bring to the market.
In its traditional form it requires the user to input a 16-25 cha-
racter alphanumeric key before the file transfer will happen.
65 - 74
55 - 64
Inconvenient
45 - 54
35 - 44
25 - 34
20 - 24
< 20
Convenient
© WorldpanelTM, TNS 2009
When asked, “If you were offered the choice of a one-click The overwhelming majority (78%) of respondents felt that a
unlock mechanism to avoid typing in the 25 digit code how one-click unlock mechanism would be important to them.
important would this feature be for you?”
13

15. Survey Results
Again, ease of use is important to reach out beyond the early adopter market.
FAMily EARly ADopTERS
85% felt the one click mechanism 72% felt the one click mechanism
was important to them was important to them
© WorldpanelTM, TNS 2009
14

16. Survey Results
15

17. Survey Results
How do users view their Digital Copies
and what type of content do they watch?
So, we know that consumers appreciate Digital Copy and that PCs or notebooks are the overwhelming favourite device for
they overwhelmingly prefer a one-click unlock mechanism. people to download to with ipod/iphone and PSPs being next
Now we look at what devices consumers prefer to transfer the on the list.
Digital Copy movie to. But is this just a reflection of the hardware people own?
„Could you now please tell us which devices you would prefer
to transfer the digital copy movie to?“
Other
Archos
Mobile Phone
PSP
iPod/iPhone
PC/Notebook
Most preferred 2nd most preferred 3rd most preferred
© WorldpanelTM, TNS 2009
Even those who own alternative technology to download the copy to would prefer to download to a PC or notebook
as their first choice.
Archos
Mobile Phone
PSP
iPod/iPhone
PC/Notebook
Video iPod or MP4 Mobile phone with PSP owner
player owner video player owner
© WorldpanelTM, TNS 2009
16

18. Survey Results
The family market is more likely to be keen on downloading to a PSP.
Archos
Mobile Phone
iPod/iPhone
PSP
PC/Notebook
Family Digital Copy viewers No Family Digital Copy viewers
% Respondents © WorldpanelTM, TNS 2009
And finally, we look at the viewing preferences of each market segment.
FAMily EARly ADopTERS
n Action/Adventure Film 13.0 n TV Comedy 14.1
n TV Comedy 12.0 n TV Drama 13.9
n Childrens Animated Film 9.2 n Action/Adventure Film 10.6
n Other Film 7.9 n Comedy Film 10.5
n Comedy Film 7.8 n Horror Film 7.8
n Sci-Fi Film 7.3 n Family Film 6.3
n TV Drama 6.5 n Childrens Animated Film 5.7
n Drama Film 6.5 n Sci-Fi Film 5.7
n TV Sci-Fi 5.9 n TV Sci-Fi 5.7
n Family Film 4.9 n Drama Film 4.6
n Children‘s TV 4.5 n Other Film 4.3
overindex vs. market © WorldpanelTM, TNS 2009
Top 5 titles bought in last year by target markets
FAMily EARly ADopTERS
n Mamma Mia n Lost
n Family Guy n Doctor Who
n Indiana Jones (Crystal Skull) n CSI
n Iron Man n Mamma Mia
n Futurama n Futurama
© WorldpanelTM, TNS 2009
17

19. Appendix
Sony DADC‘s Digital Copy with PID
Digital Copy has scored a resounding success, especially in Digital Copy with PID
the U.S. market where it has been introduced for some time. comes with eBridge
However, like many first generation applications it does have its Analytics, a Sony DADC
weaknesses and unexploited Marketing potential. online platform that
shows detailed statis-
To overcome these challenges and make the technology more tics about the usage of
consumer friendly, Sony DADC offers its customers a refi- Digital Copy.
ned version of Digital Copy which integrates it alongside the
company’s proprietary PID system. In a short time, the publisher can construct a sophisticated pro-
file of the consumer base, understanding like never before how
The beauty of Sony DADC’s Digital Copy with PID lies in its sim- they interact with their movies and what their preferences are
plicity. PID is Postscribed ID technology, which is applied to each within a diverse media driven world.
disc during the manufacture process. The PID is automatically
read by the player and does away with the need for cumberso- Digital Copy with PID provides a 'best in class' experience for
me serial codes. both consumers and publishers.
So, at the click of a mouse, the consumer can copy the movie over “Digital Copy with PID combined with eBridge Analytics,
to a laptop hard drive or many other media storage devices. fulfils two major needs of today’s Home Entertainment
marketers: to get valuable feedback about their consu-
“Digital Copy provides a safe way of protecting discs mers’ preferences as well an opportunity to differenti-
from unauthorised copying whilst empowering consu- ate their product in a retail environment,” commented
mers to watch their movie as they wish,” comments Sonja Christian Dankl, Head of Business Development at Sony DADC.
Hauck, Product Manager Video at Sony DADC.
3 Activated license.
Watch portable
movie!
DRM encrypted file
on disc License rights check Activation of DRM license
(limited number of key downloads) Bound to 1 device/download
PID
2
1
License
Server
Disc sends unique disc ID (PID)
information to license server
Activation of DRM license bound to
one device or one download.
About Sony DADC
Sony DADC is a leading disc and digital solution provider for the European distribution facilities are located in Frankfurt, Paris,
entertainment, education and information industries, offering Madrid, Gothenburg and Enfield, UK. Manufacturing sites are
world-class optical media replication services, digital and physi- located in Salzburg and Southwater, UK.
cal supply chain solutions and software services.
For more information about Digital Copy or to discuss ways in
The world’s largest optical media production network consists which our team at Sony DADC can support your business deve-
of twenty-seven optical media production, distribution and di- lopment activity, please contact your local Sony DADC office.
gital facilities worldwide.
18

20. Austria, Germany & Switzerland
Sony DADC
Sonystrasse 20
5081 Anif / Salzburg, Austria
Phone Austria: +43 6246 880 555
Phone Germany: +49 6074 498 106
digitalcopy@sonydadc.com
United Kingdom
Sony DADC UK
Kent House, 14-17 Market Place, 5th floor
London W1W 8AJ
United Kingdom
Phone: +44 20 7307 9775
daniel.finn@sonydadc.com
France
Sony DADC France
140, rue Gallieni
92100 Boulogne Billancourt
France
Phone: +33 1 6413 8242
david.rofe@sonydadc.com
Nordic Region
Sony DADC Nordics
Sluseholmen 2-4
2450 Copenhagen
Denmark
Phone: +45 7070 2725
digitalcopy@sonydadc.com
digitalcopy@sonydadc.com
www.sonydadc.com/digitalcopy