Posted on 10/29/2008 11:02:59 AM PDT by savedbygrace
Blu-ray is in a death spiral. 12 months from now Blu-ray will be a videophile niche, not a mass market product.
With only a 4% share of US movie disc sales and HD download capability arriving, the Blu-ray disc Association (BDA) is still smoking dope. Even $150 Blu-ray players won’t save it.
16 months ago I called the HD war for Blu-ray. My bad. Who dreamed they could both lose?
Snatching defeat from the jaws of victory Delusional Sony exec Rick Clancy needs to put the crack pipe down and really look at the market dynamics.
In a nutshell: consumers drive the market and they don’t care about Blu-ray’s theoretical advantages. Especially during a world-wide recession.
Remember Betamax? SACD? Minidisk? Laser Disk? DVD-Audio? There are more losers than winners in consumer storage formats.
It’s all about volume. 8 months after Toshiba threw in the towel, Blu-ray still doesn’t have it.
The Blu-ray Disc Association doesn’t get it
$150 Blu-ray disc players are a good start, but it won’t take Blu-ray over the finish line. The BDA is stuck in the past with a flawed five-year-old strategy.
The original game plan
Two things killed the original strategy. First the fight with HD DVD stalled the industry for two years. Initial enthusiasm for high definition video on disk was squandered.
Second, the advent of low cost up-sampling DVD players dramatically cut the video quality advantage of Blu-ray DVDs. Suddenly, for $100, your average consumer can put good video on their HDTV using standard DVDs. When Blu-ray got started no one dreamed this would happen.
Piggies at the trough
The Blu-ray Disc Association hoped for a massive cash bonanza as millions of consumers discovered that standard DVDs looked awful on HDTV. To cash in they loaded Blu-ray licenses with costly fees. Blu-ray doesn’t just suck for consumers: small producers can’t afford it either.
According to Digital Content Producer Blu-ray doesn’t cut it for business:
* Recordable discs don’t play reliably across the range of Blu-ray players - so you can’t do low-volume runs yourself.
* Service bureau reproduction runs $20 per single layer disc in quantities of 300 or less.
* Hollywood style printed/replicated Blu-ray discs are considerably cheaper once you reach the thousand unit quantity: just $3.50 per disc.
* High-quality authoring programs like Sony Blu-print or Sonic Solutions Scenarist cost $40,000.
* The Advanced Access Content System - the already hacked DRM - has a one-time fee of $3000 plus a per project cost of almost $1600 plus $.04 per disk. And who defines “project?”
* Then the Blu-ray disc Association charges another $3000 annually to use their very exclusive - on 4% of all video disks! - logo.
That’s why you don’t see quirky indie flicks on Blu-ray. Small producers can’t afford it - even though they shoot in HDV and HD.
The Storage Bits take
Don’t expect Steve Jobs to budge from his “bag of hurt” understatement. Or Final Cut Studio support for Blu-ray. I suspect that Jobs is using his Hollywood clout from his board seat on Disney and his control of iTunes to try to talk sense to the BDA.
But the BDA won’t budge. They, like so much of Hollywood, are stuck in the past.
A forward looking strategy would include:
* Recognition that consumers don’t need Blu-ray. It is a nice-to-have and must be priced accordingly.
* Accept the money spent on Blu-ray is gone and will never earn back the investment. Then you can begin thinking clearly about how to maximize Blu-ray penetration.
* The average consumer will probably pay $50 more for a Blu-ray player that is competitive with the average up-sampling DVD player. Most of the current Blu-ray players are junk: slow, feature-poor and way over-priced.
* Disk price margins can’t be higher than DVDs and probably should be less. The question the studios need to ask is: “do we want to be selling disks in 5 years?” No? Then keep it up. Turn distribution over to your very good friends at Comcast, Apple and Time Warner. You’ll be like Procter & Gamble paying Safeway to stock your products.
* Fire all the market research firms telling you how great it is going to be. They are playing you. Your #1 goal: market share. High volume is your only chance to earn your way out of this mess and keep some control of your distribution.
Time is short. Timid incrementalism will kill you.
Like Agent Smith delivering the bad news to a complacent cop: “No, Lieutenant, your men are already dead.”
It is acceptable to post the entire article from ZDNet without excerpting?
If not, please correct for me.
Thanks.
Ping!
Another question.
Why is ZDNet and Robin Harris so in the tank for Sony Blu-Ray?
Not yet, but its close. As long as BD discs sell for 30 dollars while sitting next to it is the same movie for 15 dollars on DVD, BD will have a very tough sell.
How prevalent are blue ray discs selling now that HD DVD bowed out of the way? How many computers are shipping with BR players? From my understanding, they aren’t selling well at all. Apple won’t put blue ray in their computers and Steve Jobs publicly ridiculed Sony/BR for it’s excessive fees stating:
“Blu-ray is just a bag of hurt. It’s great to watch the movies, but the licensing of the tech is so complex, we’re waiting till things settle down and Blu-ray takes off in the marketplace.”
“Phil Schiller chimed in with ‘We have the best HD movie and TV options in iTunes.’”
http://www.engadgethd.com/2008/10/14/steve-jobs-calls-blu-ray-a-bag-of-hurt/
I recently bought a divx compatible upconvert toshiba dvd player for $65. It’s awesome. Why would I pay premium prices for a slight upgrade in resolution on disks I already own and rarely play anyway?
Bill Gates said that B-Ray would be the last physical media standard. Perhaps he was more right than he realized.
May be of interest.
Ah DIVX...another money making scam made up by lawyers...
I have a Blu-Ray player. It plays excellent HD video. However, the difference in video quality is not worth the double pricing of the Blu-Ray content discs that are available. DVDs that sell for $12 are $30 for Blu-Ray for the same entertainment content. Also Blu-Ray movies are not necessarily released at the same time as their DVD versions.
The other reason that Blu-Ray is going to die is that the cost of solid state Flash memory technology is nosediving. 32GB Flash drives are available for under $60 and as the volume increases and technology develops, they will soon be available for under $10. Content could be provided on Flash drives for the same cost as burning a Blu-Ray disk... and soon even less.
not necessarily dead... hinges on the market penetration of large sets though (50” & up). I have one of the best upscaling players available at any cost, and there is still a significant difference on larger displays vs bd. with 50” 1080p panels breaking the $1k barrier this Christmas, it may still have life yet. I am not a fan of HD downloads yet... the picture quality is still very marginal (worse than a good upscale), which makes sense, as the hd on-demand bit-rates are usually less than that of a good dvd. there is only so much you can do with data by interpolation :)
I told Santa I wanted a new Sony Playstation so I could play Blue-Ray movies as well as play the games.
Will HD-DVD make a comeback or is it history?
>Open for discussion. Is Blu-Ray dead already?
If it is, then it’s good news.
I didn’t like Blu-ray from the beginning; and I didn’t like HD-DVD either, simply because of their ridiculously draconian DRM schemes, but these licensing terms are REALLY stupid.
No. This guy is nuts.
It will take over DVD sales in a few years. It will be the primary medium on which movies are distributed on.
good point, but until they get it into a consumer device, it will not be mass consumed. I love htpcs, but there is significant cost even without the hd source, and far more complicated than most people have the stomach for.
I have a PlayStation 3 (integrated Blu Ray player and Game Console) and a high quality Sony upscaling DVD player too. (Both HDMI connected)
On a 40” or better HDTV there is NO comparison. Blu Ray wins hands down on video quality, audio quality and copious additional content. It’s the author that is smoking crack.
Price is an issue, but Blu Ray disk discounts are frequent and becoming more so.
The slightly "older crowd" here remembers when the IBM PC hit the market.
A lesson: Greedballs in Marketing can screw up the PC!
What happened was IBM built a nice machine that competed quite well over competing CPM and 8-bit systems then on the market. Then the Marketing guys, seeking to protect IBM's dumb terminals (and seeing into the future no doubt) demanded and got a video chip that limited main processor throughput to the speed it took to refresh the CRT.
Oh, yeah, made the PC real popular ~ actually, that standard turned the PC into a "government only" machine because GSA demanded, and got, an "off switch" so that you could literally freeze the screen and process in the background as fast as the main and supporting chips could operate.
By the time the AT came out the problem with Marketing was fixed ~ no doubt many of the same folks there at IBM 25 years ago are working with Blu-ray stuff today.
Alas, there were competitors, and IBM found itself almost excluded from the PC market it'd created.
Trying to remember the last time I bought anything by IBM ~ trying, trying, trying, ~ ding, ding, ding ~ does not compute!
In a few years there will be no primary medium on which movies are distributed - it will overwhelmingly be download.
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