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DVD format victim of economy?

Selective spending could take toll on Blu-ray players

By Benny Evangelista, San Francisco Chronicle

Published October 27, 2008 at 12:16 a.m.

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This year, Blu-ray won the war. Now it faces another battle.

Technology analysts say the world's economic roller coaster could mean consumers will be holding onto their money instead of buying pricey Blu-ray players and discs - the high-definition DVD format.

Analyst Roger Kay predicts a "dramatic" drop in Blu-ray sales for the fourth quarter and beyond, pushing back adoption of the technology long enough to allow other forms of video over cable, satellite and the Internet to shut the window of opportunity for Blu-ray.

"If you can get movies over the wire on demand and have an entire library at your disposal on the screen a la Netflix, that's the way you're going to go," said Kay, president of Endpoint Technologies Associates.

Andy Parsons, chairman of the Blu-ray Disc Association, counters that naysayers also predicted doom for the original DVD players, which survived a shaky start to become the fastest-selling consumer electronics device in history, even during the dot-com implosion this decade.

"We're hopeful even though things are getting a little tough out there, economically speaking," said Parsons, also an executive with Blu-ray backer Pioneer Electronics. "Everyone thinks of DVD as an overnight success, but it actually took several years for that overnight success to happen." Blu-ray DVDs provide sharp, high-definition video and are seen as the next step up from the standard DVDs that first came on the market in 1997 and eventually shoved VHS videocassette tapes to the dustbin.

Sales of DVD players hit as high as 20 million per year in the United States, said Jim Barry, a spokesman for the Consumer Electronics Association.

In February, the Sony-backed Blu-ray format became the standard for high-def DVDs when Toshiba decided to throw in the towel on its rival HD DVD technology. The format battle held back sales for both sides because consumers were hesitant about choosing the wrong side in the war.

Sony's own PlayStation 3 video game console, which plays Blu-ray discs, helped swing the tide. With that roadblock cleared, Blu-ray backers hoped to see the start of an upswing in sales this year, especially as the holiday shopping season approached.

Research firms such as Parks Associates in Dallas have projected worldwide sales would jump from about 800,000 in 2007 to about 40 million by 2012.

But with the global economy in turmoil, consumers are expected to tighten their purse strings, which is bad news for sellers of premium-priced electronics like Blu-ray players, which are still mostly selling for $250 or more, said Russ Crupnick, an analyst with the NPD Group.

So while research shows consumer awareness of Blu-ray's capabilities is growing, they're still "going to be more selective in their spending," Crupnick said. "Because of the way they're pricing it, it's still a niche product."

But Hollywood is still betting on the format, releasing more home video titles on Blu-ray.

Comments

  • October 27, 2008

    7:35 a.m.

    Suggest removal

    The_KIMN_Chicken writes:

    I was interested in a Blu-Ray player some months ago but just didn't want to pay the price. I might have done it but but when I saw the disc were like $25.00 a pop or more I said forget it I'll just stick with the regular DVD's for now at that price.

  • October 27, 2008

    8:05 a.m.

    Suggest removal

    Bagel writes:

    People like the feel of a physical library? People....over 50? I've got my computer hooked up to my high-def plasma and am getting all my movies onto hard drives. Minimal space is awesome. Plus I can run everything from my couch with my wireless mouse and keyboard.

    Books are another matter entirely, I hate reading on a computer monitor for any length of time.

  • October 27, 2008

    8:10 a.m.

    Suggest removal

    DahmersCookbook writes:

    I buy only action movies on Blu-Ray (Transformers, 300, Iron Man), and still buy drama, suspense or comedy on standard DVD. Once you go Blu-Ray you will be hooked, surround sound, 58" or bigger, you'll never want to leave home.

  • October 27, 2008

    9:38 a.m.

    Suggest removal

    bjones73 writes:

    Anyone that has even somewhat of an interest in gaming (or has kids) should go the PS3 route.

    Gaming, Internet, music storage and Blu Ray - all on one machine.

    It's incredible and the price point is coming down.

    As far as $25 to buy a movie, go to Blockbuster if you don't want to buy. They are stocking their stores with a great selection of Blu Rays - and their online service is even better. Netflix is offering Blu Ray as well.

    Not sure why the media chooses to consistently write doom and gloom economy stories such as this.

    I go into Blockbuster every now and then and their Blu Ray selection is nearly sold out each time - so much for Blu Ray suffering in the market.

  • October 27, 2008

    10:16 a.m.

    Suggest removal

    Buckwheat writes:

    Love the picture on the Blu Ray. But the movies are to expensive, the players are 400+ (sometimes on sale for a little less). Although I do miss some of the extra features, it is not worth another $10-15 a pop to add to my library. So I'll stick with my upconverter (at a meazly $100) and my $14.99 for new releases. (for now anyway). Can't justify the cost for a little better picture, and a few bonus features.

  • October 27, 2008

    10:22 a.m.

    Suggest removal

    robbyr2 writes:

    Cable and satellite? Pricey, and not very home user friendly yet.
    Internet? First, you have to have broadband (which even at 20 mbps is way behind the rest of the modern world), but wait- nope, download a movie or two and you're cut off, or you have to pay much, much more. Second, it isn't easy and/or cheap to get things set up to watch movies from the internet on your HDTV.

    Yes, sales will not take off like the Blu-Ray camp would like because of the economy. Sales of regular DVDs are down. If there were that many sales of movies over the internet, they would be down too.

  • October 27, 2008

    10:29 a.m.

    Suggest removal

    Bagel writes:

    robby, I regulary download upwards of 20gb a month on my comcast broadband internet, and upload much more. A decent rip of a 720p movie runs around 4.5gb. Standard resolution movies are more like 1.3gb. I didn't buy anything special (other than getting a decent video card for my computer) to be able to watch movies on my hdtv from my computer. There is great free software out there to do all this. It IS both cheap and easy.

    DVDs (even blu-ray) will have gone the way of VHS and betamax when people begin to realize how easy it is to do on your computer.

  • October 27, 2008

    12:03 p.m.

    Suggest removal

    denverrma writes:

    Yes! Lets all go out and buy PS3's or some other gaming console so that we call getting even FATTER as a nation by sitting on the couch watching movies and 'gaming'. (thats FATTER...not PHATTER for all you 'gamers')

    Please take your kids to the park or the library or just get out downtown and go for a walk! Gaming is for losers!

  • October 27, 2008

    12:05 p.m.

    Suggest removal

    NeilT writes:

    Bagel is right.

    Doing movies is every bit as easy as mp3's. I won't get into too many details, like I'm sure Bagel will not either, but it truly is fast, cheap and easy.

    My desktop acts as the server for my wireless network. I plug my laptop into either the living room, bedroom or the downstairs TV and stream whatever I want. Movies, music, pictures and PDF books, all from the comfort of my couch or bed. My laptop (HP) came with a remote, even.

    Blu-Ray is the last-ditch effort before movies go the way of music...mainstream mp3's. I even convert movies so I can watch them on my CrackBerry while on a flight, or my wife can watch them on her Zune.

  • October 27, 2008

    12:23 p.m.

    Suggest removal

    Seanchai writes:

    Like many others, I've eschewed the Blue Ray format because of price - not just of the players, but of the movies themselves. When the players and movies come down in price, I'll buy them all the time. Until then, my regular DVDs being played on an HD TV provide a sharp enough picture for me. - John

  • October 27, 2008

    1:52 p.m.

    Suggest removal

    Bagel writes:

    NeilT is right about me being right. Harumph!