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How Blu-ray Can Avoid Failure

Posted on January 21, 2009 by Jeremy Toeman

Just read David Carnoy’s piece on “9 reasons why Blu-ray will succeed“.  I like David, but I couldn’t disagree more with his post (though not the individual points, as you’ll see below).  And since (as of yesterday) it’s feeling like we’re in a free country where I can say what I want (again, at last), I’ll run through my counterpoints really quick:

  1. “Digital downloads will not eliminate the need for discs anytime soon.” – I agree, but this doesn’t point to Blu-ray success.  Despite the rise of downloadable/streaming content, people are still buying disks.  But for how much longer?  I think even people who’ve never heard of things like Hulu are aware that the inevitable next step of content acquisition is file/stream based, not physical media (though they’d probably not use those words).
  2. “Having one clear standard is a big advantage.” – agreed, it’s called “DVD”.
  3. “Blu-ray isn’t going to be replaced by another disc format anytime soon.” – agreed.  In his post, David references a piece that compares early complaints of DVD to current complaints of Blu-ray.  In this example, the more apropo statement is “just like CDs, DVD isn’t going to be replaced by another disc format anytime soon.”  Er, wait, hang on – I’ll go fire up my SACD player!
  4. “Prices for large-screen HDTVs will continue to drop.” – agreed.  But with an estimated third of the country already on HDTV sets, their amazing-looking upscaling DVD players aren’t about to get replaced.  Key here – there is not a dissatisfaction problem, in the slightest, with current content.  There was with VCRs.
  5. “Prices for Blu-ray players will continue to drop.” – now we’re talking!  Buuuuut, I still don’t see people rushing out to get them, even at $99 or $49.  There’s no incentive to do so, and (as I’ve said before) consumers do not purchase new technology just because it’s cheap.  In fact cheap Blu-ray players might cause as much negative enthusiasm as positive (“this thing was, like, $399, like, only last year!  they must be, like, doing badly, like, or something. dude. like.”)
  6. “Prices for Blu-ray discs will drop to near DVD price levels.” – see previous point.  Plus, people just aren’t into replacing their existing DVD collection.  Check the Amazon Blu-ray home page. I see deals for… wait for it… The Scorpion King 2.   End of Days.  Miami Vice (ooh, director’s cut!).  I think I’ve seen these titles in the $6.99 bin at Walgreens.
  7. “Sony will sell lots of PlayStation 3 game consoles.” – will they?  Not from what I’m reading…
  8. “Sony can’t afford to have Blu-ray fail.” – they also can’t afford to not be the #1 plasma vendor.  Oops, too late.  They also can’t afford to make terrible terrible laptops that have industry folk lamenting about constantly (yeah, I went there, but you kinda knew I would).  Oops, too late.  They also couldn’t afford to have UMDs fail.  Or memory sticks.  Or mini-discs.  Oops too late.
  9. “Sony and its partners will figure out a way to have Blu-ray resonate with the public.” – and, no.  Sony’s being run by a team stuck in the 1990s, still hoping somehow Morita’s coming back.  He’s not.  And his replacements are just utterly out of vision.  They let Samsung, LG, and a suite of other no-names take over the consumer electronics industry, and the best branding they can come up with today to sell me a plasma is based on deception.

So what’s to be done for dear old Blu-ray?  Is it as dead as I prognosticate, or no?  I think the best step is to change our expectations and mindsets on it.

People are buying buckets full of Blu-ray disks.  They are available for rent by every major company, and all the new top films are coming out on Blu-ray.  So if the definition of “success” changed from “Blu-ray will replace DVDs as the dominant format of physical media and we will have Blu-ray players in every home” to something more like “Blu-ray will be the last form of physical media consumers adopt, it will get adopted by enough of the population to show profitability, but will always be perceived as an also-ran” then we’re doing okay.

More than 80% of US homes have DVD players.  Put the target for Blu-ray around a third of that, tops, and then we’ve got a win on our hands.

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Posted in Video/Music/Media | Tags: Blu-ray, DVD, HDTV | 12 Comments
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12 thoughts on “How Blu-ray Can Avoid Failure”

  1. Dave Zatz says:
    January 21, 2009 at 6:37 am

    The thing is Blu-ray players are backwards compatible with DVD. If they market that better, folks may move their existing DVD player into the bedroom and get Blu-ray for the living room. Without having to immediately, or ever, replace their DVD collection. Making it a very different transition than tape to optical disc.

    If I were to recommend a Blu-ray player today, I’d say get a networked Samsung (capable of Netflix and Pandora streaming) or PS3 to get more bang for your buck.

    Reply
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  3. Vince Masten says:
    January 21, 2009 at 8:46 am

    I’ve read all of your posts about why Blu-Ray is dead/will fail, and every time they make me frustrated, because you consistently seem to miss the point. Or I’m completely deluded into thinking that Blu-Ray is fine.

    Regardless, my biggest beef with your predictions has to do with streaming content. Yeah, it’s very promising and may eventually make discs completely outdated, but that day is still very far away. For one thing, even the best, so-called “HD” streaming is still, at best, about on-par with DVD quality, and often, it’s not even that. I tried streaming an Amazon Unbox video to my Xbox 360 a couple of months ago and found the quality absolutely appalling. Not everyone is a stickler for quality like I am, but streaming, just like Blu-Ray, is currently being adopted predominantly by technophiles, and are much more likely to notice the difference.

    Though I also take issue with your assertion that upscaled DVDs look just as good (or almost as good) as Blu-Ray, that also misses the bigger point that Blu-Ray players double as upscaling DVD players, which means that as the price goes down, people can either spend, say, $99 on a nice upscaling DVD player (don’t pretend you can get a quality one for significantly less than that) or $150 on a Blu-Ray player and have a future-proof solution that makes their current collection of movies look better, too.

    Finally, if you keep an eye out, you can get some absolutely spectacular deals on Blu-Ray movies. For example, just yesterday, Amazon was selling Band of Brothers for $34.99. Recently, I picked up the entire Die Hard quadrilogy for about $45. And a couple of months ago, you could snag both of the recently released James Bond sets (that’s 6 movies) for about $65 total. Yeah, in general, Blu-Ray is still too expensive, but don’t assume that a cursory glance tells the whole story.

    Reply
  4. Jeremy Toeman says:
    January 21, 2009 at 9:15 am

    @Vince – thanks for the comments, and I appreciate your counterpoint, though I do feel some of your points do not directly address my positions here. Either way, here’s my thoughts to your thoughts! 🙂

    re streaming content – I don’t really feel I’m making the case that everyone is streaming today. But if you had to make a bet, wouldn’t you wager than 2 years out the infrastructure to support massive amounts of HD streaming is likely to show up? There’s more momentum to streaming, therefore more R&D spending going that way.

    re DVD vs Blu-ray – I think my point here stands, that you have to convince someone why they should buy a *new* player, when their old player works just fine, and looks great. I don’t agree that a Blu-ray player is “future-proofed” in any way, because, per my entire argument, the future is probably not in physical media.

    re pricing – I didn’t argue that Blu-ray was too expensive.

    Reply
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  6. Greg says:
    January 21, 2009 at 7:00 pm

    I think you make points that have already been treated (at length) at their source by David’s article (and others), following the success of Blu Ray this holiday season (specially considered that so called “specialists like you were already “putting the nail in the coffin of Blu Ray” – lol).
    This being said, I think those points should be adressed yet again.

    1) Digital Downloads – The online factor will grow, that is for certain. But do you have any idea how many people are directly concerned by streaming or downloading (as in, have the tech knowledge or even desire to go there)? Or have access to online broadband sevices to start with? (or can afford it)
    What’s with the guy in the middle of nowhere … Is he supposed to stay in SD forever with his DVD player that upscales passably “oh-so-not” in 1080p ?

    2) Having a clear standard – I didn’t know that the DVD was the standard of native HD.
    Your point may be that the average consumer does not care that upscaled 1080p is not real “native” HD, but riddle me this. When Blu Ray players (who can also read DVDs and upscale them) are as cheap as a good DVD player (it’s coming, check the Vizio model coming this April), and Blu Ray discs barely more expensive if at all than DVD releases.
    What sense would it make for an educated consumer (and the challenge is here, but it’s growing) to still buy DVDs ?
    None.

    3 – Blu Ray isn’t going to be replaced – And for you to give an example of a failed format. History is full of failed formats. Take HD DVD per exemple. Ouch.
    It’s also full of successes. VHS, DVD …. Blu Ray ?
    Your exemple is pretty much useless

    4 – HDTVS going down in price – No dissatisfaction?
    Really? Funny, because when people start seeing what their HDTV can -really- do in HD (like with HD satellite channels), they start thinking that their DVDs look real crappy. And Blu Ray is -normally- even better than those HD channels.

    5 – No need to buy BR, even cheap – Uh, ok.
    How about it provides full HD quality with BR films, -AND- upscales your existing DVDs, so when it’s the same price as a DVD player, you’d have to be downright -stupid- not to buy one?
    Blu Ray players, even only used as upconverters for starter, -will- replace DVD players. It’s inevitable. DVD playing is the Trojan horse, and later consumers can move on to BR films, which they will be tempted to buy from the get go with new releases anyway when you see a film like Wall E or The Dark Knight.

    6 – People not replacing their DVD collection?
    And who asked them to?
    Again, Upconversion of DVD is built in. Prices are going down, and when players are at the right price, along with films, DVD will naturally die. That’ll take a long time though, don’t get me wrong.

    7 – Yeah. I think Sony will sell lots of PS3s. They already sell,all things being equal (started a year later) more than 360s year per year (year 1 of PS3 vs year 1 of 360, etc.). If you have seen the PS3 lineup to come, compute a more than probable price drop to $299, and all the media capabilities of a PS3, yeah. I think so. Color me an optimist.

    8 – You want to play that game? Ok.
    How about CDs and CD-ROMs? That’s Sony (+Philips). Walkman? U-Matic? U-Matic SP, Betacam, Betacam SP, Betacam Digital and SX, etc.
    All Sony, and de facto standards. You lose some, you win some (never seemd to me that UMD was made with anything more than the goal of being the PSP medium for games and movies, and not an industry standard, but who knows). This being said, Blu Ray (and that’s a lil’ problem with the original article) isn’t -Sony-. It’s dozens of CE makers, with a very strong take from Samsung and Panasonic.

    9 – Apparently you don’t like Sony. Looks like it’s all the rage these days, along with Microsoft or Toshiba (Pioneer too, who can seem to do no wrong) boot licking.
    Sony is torn appart every day in the medias, while I haven’t seen anybody exploring the 360 Arcade profitability. Or the whole division’s profitability after their price cuts. Or Toshiba’s idiotic and desperate clench on the DVD format (engadget has done that a little bit). If Hirai or another Sony rep says something, it’s deriled and mocked to no end.
    If Aaron Greenberg (MS) says anything, it’s gospel.
    Frankly to me Sony is just another CE maker that made a good machine (PS3) but too expensive, but the dual standards gets old sometimes.

    Reply
  7. Jeremy Toeman says:
    January 21, 2009 at 8:45 pm

    @Greg honestly, I really don’t feel you added any new arguments to the discussion above and beyond what Carnoy wrote in his article. If you have something new to contribute, I’m happy to keep up the debate, but it seems like it’s a rehash and so my counterpoint will be … “nuh-uh”.

    Reply
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  9. Ben Drawbaugh says:
    January 22, 2009 at 8:49 am

    First off it’s Blu-ray, not Blu-Ray — its right in the text, but not in the heading.

    As for success. You think LD was a failure even though it was around for 30 years, so I have to keep that in mind.

    But Blu-ray will help packaged media fend off downloads by offering the highest quality and giving people the opportunity to buy technology they are comfortable with — not saying this is right, just saying.

    It will overtake DVD when enough people’s cheap DVD players break and the price of Blu-ray players is so cheap that no one bothers making DVD players anymore.

    For now though it has to be happy with out pacing DVDs first few years and about 4-12 percent of the market depending if you want to compare only new releases or every title under the sun. Either way, most agree that the packaged media industry would be suffering bigger loses if it wasn’t for Blu-ray, which is the entire point.

    Reply
  10. Jeremy Toeman says:
    January 22, 2009 at 9:22 am

    @Ben – thx, fixed the title. If you read the last few paragraphs, I basically state something similar. If we change our definition of “success” to be more LD-like, then I agree…

    Reply
  11. DaveM says:
    April 16, 2009 at 7:31 am

    Seems to me that the crux is this:

    I *will* buy a Blue-ray if/when my DVD player is dead/moved to another room.

    I will then only buy BR discs if they are as cheap as DVD now (I got 14 hitchcock movies for £14)

    the real question is “will this happen before downloading content is mainstream”

    answer is – we don’t know.

    until then, the market share will creep up slowly over time.

    however – VHS quality was bad, and i re-bought on DVD, and rebought tapes on CD/MP3, however i will not rebuy all my movies on BR-DVD, hence; if download is mainstream in 5 years, it’s possible that the number of BR-DVDs sold could get as high as DVDs – all based on the timing. however as long as that keeps driving down DVD prices, I will keep buying really cheap DVDs

    also the quality issue: VHS = poor, DVD = very good, BR = extremely good – most people are happy with “very good” though.

    Reply
  12. Blu ray says:
    June 24, 2009 at 2:16 pm

    Many people already assume that Blu ray will be the follow up to DVD. This “belief” is enough to make Blu ray avoid failure. HEHE

    Reply

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Jeremy Toeman is a seasoned Product leader with over 20 years experience in the convergence of digital media, mobile entertainment, social entertainment, smart TV and consumer technology. Prior ventures and projects include CNET, Viggle/Dijit/Nextguide, Sling Media, VUDU, Clicker, DivX, Rovi, Mediabolic, Boxee, and many other consumer technology companies. This blog represents his personal opinion and outlook on things.

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