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Will Blu-ray Vanquish HD-DVD, And Will Anybody Care?
Electronics | Jan 10, 08
Even as Hollywood studios line up behind Sony's high-def standard, emerging high-speed movie downloads and streaming on-demand content may render Blu-ray a technology whose time never came.
Last Friday, Time Warner announced that by May it would drop Toshiba's HD-DVD format and make its high-def content available exclusively on Blu-ray. This means that of the seven major studios, only two remain committed to HD-DVD, those being Viacom's Paramount and General Electric's Universal. With Blu-ray movie sales running at twice HD-DVD's rate last year, the Warner Bros. decision may well be the tipping point that drives a lock-in effect in favor of Sony. This should constitute sweet revenge for the firm whose Betamax standard lost out to JVC's VHS in the videotape wars of the 1980's.
Yet this time around there's a fly in the ointment. I noted back in March of 2006 that as consumers grow increasingly comfortable with online movie downloads and the video on demand services of cable companies, the rationale for high-def disk-based movie sales begins to crumble ("Blu-ray Vs. HD-DVD: Lock-In, Co-Existence, Or Irrelevance?"). Sony's Blu-ray sales have been heavily driven by its inclusion in Playstation 3 consoles, a move which helped put these units at a price disadvantage relative to Microsoft's Xbox and Nintendo's Wii, quite possibly costing the firm videogame market share. Blu-ray's higher price point may prove prohibitive for consumers considering a stand-alone purchase (perhaps allowing HD-DVD to stick around a bit longer that it otherwise would), yet without a higher price Sony may have difficulty recouping its investment, especially if one factors in lower PS3 sales.
Meanwhile, Comcast and others are announcing plans to radically expand the number of on-demand and download titles, while cutting download times from hours to minutes. If this turns out to be true (and with superior bandwidth and compression technology I see no reason why it won't) you have to wonder whether most consumers will chose to shell out hundreds of dollars for Blu-ray. In the wake of the Warner announcement we've actually seen some merchants raise the price of key Blu-ray players – note the increase in the average price of the Samsung BD-P1400 Blu-ray Player, for example.
Time Period: 9/3/2007 through 1/7/2008
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price
With high-def downloads and VOD breathing down its neck, perhaps Blu-ray manufacturers will have to make these players a more compelling value proposition, lest Sony and its allies find themselves having won themselves sole possession of a high-def technological rout.
Posted by jeffrey.trester (Permalink)
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