http://www.tvpredictions.com/2008/01/hd-dvd-is-dead.html
Well with the somewhat shocking news out of Warner that they are dropping support for HD-DVD and releasing their high-def titles exclusively on the Blu-Ray format and all the buzz that it has created on the web, I figured it was time that I offered my 2 cents on the issue as to what it all means both near term and long term.
As for the near term, it spells the death of HD-DVD as a viable format. Put a fork in it. It's finished. The fact that the HD-DVD Group cancelled their news conference at CES Sunday night tells you all you need to know on that score. I can no longer in good conscience recommend to anyone that they purchase an HD-DVD player unless they can grab one for $50 and under and use it as an upconverting DVD player. I fully expect Toshiba to throw the towel in within the next couple of weeks. I fully expect Paramount and Universal to announce support for Blu-Ray, perhaps even by the end of CES. You may get those Blades of Glory Blu-Ray discs yet!
I would also expect to see an end to those BOGO Blu-Ray sales as well as there will be no need for them. I also expect that you will see and end to any further price drops on Blu-Ray players either standalones or PS3 consoles. While I doubt that the various BD hardware vendors will raise their prices, they have no reason at this point to lower them any further, at least in the short term. I am also sure you will see a lot of HD-DVD discs and players showing up on e-bay and being returned to vendors. If you have a sizable HD-DVD collection, keep an eye out as you may be able to snag a player real cheap as a back up. However, expect no further firmware upgrades from Toshiba.
As for the long term, the jury is still out as to what the final impact this announcement will have for the future of high def optical media. Personally, I have not been of the mind that the format war had much of a bearing on the slow adoption of high def discs. As I have written on a number of occasions, I view the rather meager sales of high def discs on both formats to be due mainly to two other factors, the high price of the hardware and software on both sides as well as the popularity of DVD. After being used to DVD player prices well under $100, even for an upconverting DVD player and discs priced on sale anywhere between $5 and $15, the mass market has little interest in spending hundreds for a new player or players and over
$30.00 for discs, even more so considering that some have been purchasing DVD copies of Blu-Ray movies for travel purposes, especially those Disney films.
These two factors have not changed with Warner's announcement of exclusivity. Until the price of a new Blu-Ray player hits the $100 price point and discs under $20, sales will still lag way behind DVD. With uncertain times ahead in the US in 2008, the mass market will have even less incentive to spend for a new player and high priced discs. Regular old DVD will do just fine for most. Remember, surveys have repeatedly shown that only 40% of owners of HD sets even have an HD signal hooked up to it and instead use their sets to watch standard definition TV and DVD. Do you think that all these folks are going to run out and buy a Blu-Ray player because of the Warner's announcement? I think not.
So where does this all lead us? The way I see it, optical HD media has little chance of being the next mass adoption media. The next mass adoption media will be downloads and HD VOD. Yes fans, even Blu-Ray will go the way of the Mini Disc, Beta, VHS and 8 tracks into the dust bin of history, at least as a pre-recorded movie medium and a whole lot faster than any of you think. Pure and simple, downloads are the future. Why? Well, with broadband speeds getting faster and faster fairly quickly, you will be able to download an HD film fairly easily in a couple of years. Look at music downloads and the sales of CD's. Face it, most people got tired of buying CD's for a couple songs. When downloading became available, the music buying public
flocked to it. Instead of changing their business models to reflect the new reality, the music industry fought rather than embraced downloads, to their financial detriment. The movie studios will not make the same mistake.
While there will always be people like me who love having physical copies of movies (and CD's and LP"s for that matter), the mass market has embraced MP3 downloads of music and have
stopped buying CD's as a result of a convergence of many factors, chief among them cost and convenience. This same model will play itself out with movies as well. Think about it. How many times do you watch a movie after you purchase a HD-DVD or Blu-Ray disc or a DVD
for that matter? Wouldn't most people rather just rent the disc under those circumstances? With downloads, they will be able to do just that with the click of a mouse. So they will be able to only watch the film once or twice for $5. To them, that is better than doing the same thing for $10 or $15 or in the case of HDM, $30. This, ladies and gents, is the future and guess what, the studios will be more than happy to see it happen.
Why?
They will no longer have to spend money to manufacture discs, they will be able to control its
distribution more carefully, enable stronger DRM and even better, get revenue each time you want to watch the movie as the downloads will more than likely be limited to one or two showings. Want to watch it again? No problem as long as you agree to pay another small fee. This is all exactly what the studios want. In fact, they are salivating at the thought of this very business model Long before the time that Blu-Ray gains mass acceptance, HD downloads will be gaining momentum and will have supplanted Blu-Ray. Blu-Ray will still only be a niche product by that time, lagging behind DVD and downloads, just like SACD and DVD-A lagged behind CD's and downloads. Yes, Blu-Ray will be another SACD or DVD-A. It is said that time waits for no man. Neither does technology.
Yes, Blu-Ray has won the format "battle" but will lose the "war" to downloads and HD-VOD. That is my story and I am sticking to it!
