Digital-media sales stalled in Q1

bicker

Ridiculous. You're really trying very hard to misunderstand what I wrote. I have confidence in you. You can understand it if you really, honestly try.

If Blu-ray is going to have that higher enthusiast's price-tag, that will limit is revenue potential.

Nikopol

Mate:

Check out DVD MSRP pricing, both historically and today. OMG, it's priced like an enthusiast's product! Especially in the earlier days, when the street prices were much higher and didn't fall as soon as they do today.

Now answer the question: Does having the price level of DVD and BD limit the potential as a fact? Remember that DVD is a very, VERY successful consumer product.

Your logic is flawed. The fallacy is dealing in absolutes.

bicker

The word "limit" is not an absolute. If you're reading it that way, then you're reading it wrong.

DVD, actually, is the main reason why "enthusiasts'" pricing limits BD revenue potential. DVD is, perhaps, "too good", from BD's standpoint. DVD had competitive advantages (over VHS) that BD simply does not have (over DVD). The advantages of BD are simply too subtle (appealing mostly only to the "enthusiast") as compared to how apparent the advantages of DVD (over VHS) were to Average Joe.

Heck, in consumer electronics, we sometimes have had to practically ban old things, legally, to make enough people buy the new technology.

I believe BD's revenue potential is limited until its pricing gets to the point where the price difference between BD and DVD is as small as the advantages BD affords over DVD in the eyes of Average Joe.

Nikopol

I've heared that story about the alleged importance of Average Joe for something like three years now.

Check out the observations about products life cycles and you'll find, that Average Joe is usually becoming important in the middle of a life cycle, once it get to the early majority phase. Which imo we're heading right into, if growth rates keep the way they are now.

(current status: revenue up like +200% compared to last year, which has seen a revenue growth of over +300% iirc from a small base. This year however the base is bigger and next year the base will be in the billion $ magnitude. )

Thus based on the general observations of what kind of persons buy at what stage of a life cycle, products usually are priced differently during the phases of their life cycles. Which is what you've seen happening with DVD pricing in a text book worthy example.

You can try and put the cart in front of the horse (price new products "acceptable" for J6P right from the start by some non-defined, arbitrary amount). You might be in for a surprise, that the game changing mass-movement will not happen.

(Disclaimer for the consumer standpoint police: I want to buy each and ever Blu-ray for $4.99.)

bicker

It was the context of much of my (first) career.

That's the whole point. It is your opinion that BD is heading into product maturity. It is my opinion that BD's product maturity cycle will get sidelined by the extended product maturity cycle of its predecessor, DVD.

ack_bak

I really do not see DVD and Blu-Ray being an either/or solution. Both will coexist for many years to come.

I do think, at some point in the next 3-5 years, that the majority of optical players being sold in stores will offer Blu-Ray playback. Once this is the case, it will make it much easier for Blu-Ray software to get priced lower as it will have a much larger ownerbase to draw from and replication costs and yield times will continue to improve. We are already seeing some catalog titles being priced very aggressively ($7-12) in many stores and it is 2009 and Blu-Ray still has a much smaller ownerbase vs DVD.

Where does that leave DVD in 3-5 years? I believe you will see more stores (B&M) only stocking the newest blockbuster releases, and Blu-Ray will have the lionshare of shelf space. I see the transition being similar that we saw from VHS to DVD, but it will most likely take longer. DVD will have a longer shelf life.

Blu-Ray still has some big obstacles to overcome, but price will be the biggest barrier.

ack_bak

Double post.

Lee Stewart

I agree. Add to the mix streaming and downloads. Our CE and HV world today is all about choices for the consumer.

No matter what happens, BD is always going to be more expensive to replicate than DVD. And seeing a handful of cheap BD's doesn't change the fact that on the whole, BD's are more expensive than DVD's.

I don't see this happening until such time that HDTV reaches 80% or higher penetration and BD reaches 60%. Now we are talking years into the future - more than 5.

True - as long as a D/D BD costs more than a DVD , the consumer will have to make a choice. And that choice is dependent on price and if there is a price difference than consumer apathy also becomes an issue.

ack_bak

Absolutely. And the nice thing is that you can already buy one device now that does it all. BD player. Upscaling DVD player. Streaming. Etc. Throw in BR recording and DVR functionality and you will have a pretty complete device.
Yes, BD will cost more than DVD. But when the difference is less than $1 it won't make much difference in the big scheme of things. Instead of buying $3.99 DVD's you may be forced to buy a $4.50-4.99 BD disc.



I see retail stores giving you little option once prices on BD players are at the $49 and under price point. Which in 3-5 years is almost absolute. They may carry one or two DVD players at that point priced in the $20 range but most people will be pushed in buying the BD player. Retail stores are all about shelf space and if they can push you into a BD player it may result in you buying BD discs as well (even if you don't own an HDTV).


And like VHS before it, the studios, CE's, and retailers may simply make the choice for consumers.

But clearly we are not talking about 2009. Or 2010. Or probably 2011. But by 2012-2014 I think the powers that be will be in a position to more aggressively phase out DVD.

Lee Stewart

I am sure that there will be other CE devices that will offer streaming to the consumer ("OTA" already does). CES 2010 should be very interesting.

We agree to disagree about pricing of optical discs in the future. No reason to get into an argument about speculation.

So I bought this $600 ceramic top stove 3 years ago. Best stove I have ever owned or used. And the funny thing is . . .

I have never used the oven portion of the stove, I think the paperwork is still there.

Well I don't see that happening because the difference between VHS and DVD (from a retailers and studiuos standpoint) was night and day, unlike DVD and BD which are the same.

93% of USA HH's have a DVD player. And almost all of them have more than just one. And although HDTV will reach 80+% adoption, there will still be SDTV's (millions of them) in consumers homes - with DVD players attached to them.

How anyone can think that BD will be as successful as DVD is beyond me.

Dare

Oh my, I agree with Lee. Well, what the hell, I do about half the time anyway.

I don't subscribe to this idea that the CE's forced consumers from VHS to DVD. That's a steaming load of crap. It was actually the other way around. All the CE's could do is offer consumers DVD. It was up to the consumers to pick it up and run it into the end zone. And did they ever. So I wouldn't be waiting for CE's to make the Blu-ray/DVD decision for consumers. They don't operate that way. They don't have the ability.

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LG GGC-H20L Super Multi Blue Blu-ray & HD DVD ROM Drive
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ack_bak

I suspect the majority of HDTV's being sold down the road will have streaming built in. But I think most Americans would rather have one device that did everything they wanted/needed vs having to buy and hookup 3 or 4.


I don't really see it being speculation. DVD has reached its saturation point and is declining. Blu-Ray is a new technology that will grow. Like DVD before it, I see no reason why yields will not improve over time and costs will drop. I do agree that it will most likely not ever be as cheap as DVD was, but I also do not think the costs and yields will be that dramatically different.

Anybody have the current costs of a BD25 and/or a BD50 vs a DVD? If my memory serves me correctly, I thought the price difference last year (2008) for a BD 50 vs a DVD9 was less than $2?

Retailers are all about shelf space and margins. Stocking both DVD and Blu-Ray takes up shelf space. And if the Blu-Ray offers higher margins, it is a no-brainer in seeing which item they will push on consumers. I am not saying that DVD will 100% be replaced. But I can see retailers drastically cutting back on their catalog stock and their shelf space and placement for DVD. I already see some of this happening today at my local Walmart, Target, Best Buy, and Costco. Blu-Ray has gained shelf space at the expense of DVD.

Blu-Ray players will hookup to an SDTV just fine. You don't have to have a TV that supports component or HDMI. If somebody's DVD player dies and they run over to Walmart, Best Buy, Target, Sams, Costco, etc they are probably going to pickup whatever the store is carrying and the salesman/woman is pushing. If there are 10-12 BD players vs 2 DVD players, the chance of them picking up a BD player vs a DVD player is greater.

Again, it is 2009 and this is already happening in terms of shelf space at retailer stores. Once BD players hit $50 and under there will be little selection of DVD players.

I never said that. In fact, I don't think we will ever see a single dominant format like DVD again. DVD just did not have the competition, and most consumers really did not have much choice in the matter.

But from an optical disc perspective, I belive retailers, studios, CE's, etc would have reason to slowly phase out DVD and try to push Blu-Ray.

ack_bak

It takes both (ie the industry and consumers). But I don't know how you could not step into a Best Buy, Circuit City, Walmart, etc in 1999-2002 and not see what the retailers, studios, and CE's were doing. DVD was placed in the best real estate spots in the store and VHS was treated like the bastard step child. This was planned and calculated.

Yes, most consumers loved the idea of no longer having to rewind movies, and they liked the form factor and additional features that DVD offered, but clearly consumers were also pushed to upgrade as well.

Kosty

Nice observation.

Kosty

Looking for a public source to tell you.

Privately the costs of BD50s for the studios have dropped dramaticallty this year and availability and price is now real close to BD25s and close enough to DVD9s that its not a factor anymore, considering that the Blu-ray markup over DVDs more than makes up the difference.

In studio quantities the difference between a BD50 and DVD9 is far less than a buck and for Sony going to Sony DADC its even less than that.