I have long contemplated blogging on this topic but decided to chime in now as I see this holiday season being HD DVD’s last stand. Let’s recap for those of you who don’t know squat about Blu Ray and HD DVD. I thought by now most people were somewhat familiar with this next generation format war, with the amount of advertising circulating about both products. To my surprise one of my more plugged in and knowledgeable friends confessed he was unfamiliar with Blu Ray and the format war.
Similar to how VHS won out over Beta and Laser Disc lost out to the DVD, a third generation format war of what technology is the chosen video media format has been raging for over a year. Sony’s techology, Blu Ray (or sometimes Blue Ray), is more expensive but holds higher amounts of memory compared its competitor HD DVD. Sony rolled the dice on bundling in a blu ray drive into all PS3’s which have been shipping since November 2006. At the time blu ray players were going for around $800 while PS3’s were a much more functional alternative for $600.
Through out 2007 new HD DVD and Blu Ray players hit the market with the price for both players dropping a hundred bucks or so every other month with HD DVD consistently being a hundred bucks or more cheaper than Blu Ray. Gadget gurus, reporters, technology analysts, and bloggers monitored the situation as corporate America began to take sides on which technology to embrace. Below I will break down why I think Sony Blu Ray is on the verge of claiming victory against Toshiba backed HD DVD.
Origins-
Long story short, this war was almost avoided but electronics makers, movie studios, and technology companies could not come to an agreement on what would replace DVD as the next generation of disc for movie. For more information Wikipedia has a great write up on the rift and dispute
Studios Take Sides: Many believe the most important factor for this format war will come from movie studio support as they control which format their movies will come out on. Currently Blu Ray boasts Sony Pictures, MGM, 20th Century Fox, Lionsgate, and Disney as studios who exclusively release in Blu Ray for HD titles.
New line Cinema and Warner Brothers release movies in both formats while Paramount, Universal, and Dreamworks exclusively release to HD DVD. In August Paramount and Dreamworks made the switch from supporting both formats to being HD DVD exclusive with rumors that they committed to be HD DVD exclusive for $150 million for a 18 month commitment. This announcement ruffled some feathers in Hollywood with Michael Bay stating he would not direct Transformers 2 because it would not be on Blu Ray (he later retracted the statement but is still bitching about it.) Below is a list of popular recent movies and what formats they have been released on.
HD DVD
Knocked Up, Bourne Ultimatam , Transformers
Blu Ray
Superbad, Simpsons Movie, Talladega Nights, Spiderman 3, Ratatoile, Pirates of the Carribean 3
Both
300 The Departed
Technology Companies, Rental, and Retail Pick Sides:
Not to be overlooked is the actual distribution of new players and discs of these next gen players. With both format’s consortuims lobbying hard to win over corporate America, Blu Ray has taken a stronger position in this regard.
On the technology side Apple, Dell, Samsung, HP and Pioneer are members of the Blu Ray consortuim with, Intel, NEC, Microsoft, and Fujutsi all in HD DVD’s camp. Bottom line these electronic makers are on board with only making hardware that play, record, or burn these type of disks. With HP, Apple, Sony, and Dell in Blu Ray’s camp its safe to say Blu Ray holds an advantage in this category.
Although sales for players is still largely dominated by PS3 blu ray players over stand alone players, we are beginning to see traction of Blu Ray camcorders and disk drives in PC’s, laptops, and desktops.
The rental market has also chimed in heavily for Blu Ray with Netflix and Blockbuster opting to push Blu Ray nationally (testing showed blu ray were 70% rentals of HD rentals) prompting both to push roll out Blu Ray rentals only nationally. Target and other retailers have opted to carry movies on both formats but elected to only stock Blu Ray players over HD DVD as well.
The bottom line is that domestically and internationally Blu Ray movies have been sold at a much higher rate than HD DVD. Although this was to be expected with PS3’s making inroads in gamer’s houses all over the world, the unwillingness of corporate America to support HD DVD has led to some countries to boast 5-1 or even 9-1 advantage of Blu Ray disc sales compared to HD DVD. On the home front its not that bad but movies released in both formats tend to usually be 2-1 to 3-1 in favor of Blu Ray (Departed and 300 being the best 2 benchmarks)..
Below a quote from a great Business Week article about the number of players in the US for both sides
“According to industry tracker Adams Media Research, by the end of this year as many as 578,000 U.S. households will own HD DVD players, compared with 370,000 that have Blu-ray players. Adams also estimates there are 300,000 more HD DVD players in circulation as an external add-on to Microsoft Xbox game consoles. But that still pales in comparison to the estimated 2.3 million Blu-ray-equipped Sony PlayStation 3 consoles sold through November in the U.S.”
From these estimates you would have around 900,00 HD DVD players compared to 2,700,000 Blu Ray players with many of these being PS3’s that may or may not be utilized as a Blu Ray player.
So why is this Christmas season so special?
Although there are a not of players out in the market compared to DVD players,those who got that big fat HD TV in the last year or so might feel the need to splurge on one of these 2 kinds of players. HD DVD backers have thought the lower price would allow them to gain ground on Blu Ray. I would guesstimate the average playing being sold this Chrisman season for HD DVD would be around $225 with the average Blu Ray player being purchased at $400 (price of PS3, recently lowered which is sure to help the cause). Despite this price advantage,I think the amount of people who will try to save some money by going HD DVD will only be a fraction compared to the millions over the world who might unwrap a PS3.
With some revamped marketing, the price drop, and promotions bundling in 3-4 free movies with PS3, HD DVD will not make up enough ground to reverse their current trajectory of being abandoned sometime in 2009. Sony not only is pushing hard for PS3 to win back some of the lost gamer market, but is also putting is also trying to persuade PS3 owners to utilize the Blu Ray player functionality by offering free movies for purchase or signing up to Sony’s online network.
Strong rumors persist that Warner Brother will make the switch to Blu Ray Exclusive instead of supporting both, thus tilting the landscape dramatically. Warner Brothers has always leaned towards Blu Ray and are said to be keeping a close eye on holiday sales before making a final decision. With Paramount and Dreamworks nearing the 1/3 point of their 18 month exclusive period with HD DVD, some have speculated they will evaluate a then Blu Ray dominated market and cut the legs from under the HD DVD camp by opening up to Blu Ray when the agreement expires thus ending the third great format war.
Although the above paragraph is a prophesied demise of HD DVD, the bottom line is that the PS3 gave Blu Ray a clear head start one that has only been aided with corporate America’s backing of the technology. I reckon HD DVD backers feel that this tug of war is nearing its end as they slip closer and closer to ultimate defeat.
Essentially if Warner Brother’s goes Blu Ray exclusive and HD DVD does not quickly answer with a major announcement of their own, the public perception will be that HD DVD has lost the format war prompting key backers to jump ship thus dissolving any substantial organized push for the format.
One other prediction I would like to make is that while I do see Blu Ray winning out a slow but decisive victory for Blu Ray, I don’t feel the general public’s adoption of Blu Ray will be anything like the fast adoption seen by DVD.
DVD’s were a huge upgrade in every sense of the word over VHS (size of movie, picture quality, sound, not having to rewind, special features) which led to herds of people making the switch from 1999-2002. While Blu Ray is sweet. its not the massive upgrade over DVD that DVD was over VHS. I will tentively pencil in 2014 as the year that Blu Ray sales overtakes DVD sales which is based 100% on me pulling a number out of the thin air.
Disclosure: I own a PS3 and own 5 Blu Ray movies (Superbad, Momento, Departed, Talledeaga Nights, 300) and hope to avoid the embarrassment of those who bought Beta over VHS or Laser Dis over DVD
