This is an opinion post, but it's based on a good deal of knowledge so bear with me.

First off, let me say this has nothing to do with Blu-Ray's advantages in the video game market. In the immediate future the ability to store so much information on a disc is a huge boon for a game, and in my opinion is the main thing the PS3 has going for it (but I'm not a huge graphics guy. So the ability to have a massive immersive world with hours and hours of game play and tons of details throughout the game in terms of story and said gameplay is much more important for me). However, when it comes to the supposed advantage the PS3 will have as a movie player and the way it will boost the console going forward, well...

I'm a grad student at USC Film School. Among the many things such an education gives you, one thing you have a lot of access to is guest speakers in classes who are deeply involved in the industry. I've heard guests ranging from the former head of Paramount to the current head of the Sci Fi Chanel to the director Jason Reitman to countless experts on new media. Many of them have talked about the sea change that is going on now--the way distribution is being completely revolutionized and the imminent death of DVDs as the primary non-theater method of distribution. This last issue is borne out through the fact that after years of an explosion in DVD sales via it's packaging as a prestige item--full of special features and booklets with articles--and via it's use as an ideal manner to package television shows old and new for the consumer, DVDs sales have stagnated for the past couple of years, and are actually starting to decline. DVD is dying. However, Blu-Ray never enters the discussion.

In the eyes of many in the film industry and many who watch that industry, the DVD is going the way of the CD (an industry even more in freefall than DVD is). It's killer is the exact same one as CDs, as well: the internet. According to many in the industry (again, I'm speaking of live interviews with these people, so I can't provide a link. In addition, some of the speakers have a lot riding on DVD--this is not the type of information they would give out publicly, hence my unwillingness to name some of their names) Very shortly, the primary way people will buy and consume movies is via download. The explosion of this as method of distribution can already be seen taking effect. Youtube, for one. iTunes for another. Hell, not just iTunes, but the iPhone and cell phones as a whole. In addition, networks make a good deal of money by now allowing you watch episodes of TV online (in a proprietary viewing system where you can't fast forward past commercials). Netflix, staying on the cutting edge, recently added a download feature where you can watch movies immediately, or download them to your DVR.

So where does this leave Blu-Ray? For all the hubbub around the format wars, a dirty little secret of Blu-Ray is that despite winning it's growing at a much, much smaller rate than digital distribution is. Some might say there's image quality to take into account, but again we can look to CDs. The public has more than proven that they much prefer the ease of use, price and low storage requirements of MP3s over the superior audio quality as CD afford. Audio DVDs certainly failed to change this tide. Ironically, audio DVDs first popped up at the start of the MP3 revolution, just as Blu-Ray is popping up just as digital distribution of films is ramping into high gear. In addition, the obvious fact is that there's a cognitive dissonence involved. The video can only get so much better before you run into the barrior that you're still watching the film on a much smaller screen than you're supposed to be and with many fewer speakers. For those that want the true top quality film watching experience, the answer is, of course, the movie theater. Blu-Ray is most likely going to suffer the same fate as audio DVDs--it's going to be the last, dying vestige of the old system model of post-theater distribution that will not be able to fight off the entirely new, revolutionary model exploding right next to it.

It is my opinion that Blu-Ray as a medium to watch movies will not be a major factor for the PS3. It's only a small factor right now, as Blu-Ray is just begnning to creep into the market as a replacement for DVD. By the time it should be poised to fully take over for DVD (which it certainly hasn't yet--most people still own a DVD player and buy DVDs, not Blu-Ray discs), giving the PS3 the biggest push via it's use as a Blu-Ray player, digital formats and dstribution will have taken over as the true replacement for the DVD. Blu-Ray will remain then, as it is now, a butique item, doing relativietly little for PS3's overall sales performance. Other than, of course, the reason some awesome ass huge ass games can be made.

Thoughts?

You are incorrect, Blu-Ray is really important to the PS3. Blu-Ray will significantly improve future games in regards to both visual and audio and the storage capacity of Blu-Ray is around 50GB on PS3 games. DVD's maximum storage capacity is only 8.5GB.

There is a difference between the music and film industries. Most people can't tell nor do they care about the differences between mp3, CD quality audio, or SACD quality audio. Far more people can see and tell the difference between youtube, SDTV, and HDTV.

It will be years before even the entirety of the US has even DSL-level bandwidth, let alone the bandwidth capable to download even DVD quality films on a regular basis, or the storage space to save them all. Unless people are content with crap picture quality like they are crap audio quality, it will be a long time before digital distribution takes hold, imo.

Rock_On_2008:

I said pretty clearly that I wasn't referring to the advantage Blu-Ray gives as a platform for games. I'm specifically talking about it in relation to it's use a platform for movie viewing.

makingmusic476:

While it's true the entirety of the US does not have DSL level bandwidth, an even smaller percentage of the population has a blu-ray player. I'm pretty sure you'd find that the segment of the population that can afford broadband and have the ability to store these movies in one way or another (iPod, hard drive, DVR, whathaveyou) and the segment that can afford a Blu-Ray player have a massive overlap. Hell, if anything, the population with broadband (or could afford it) is probably bigger than that with the ability to own a Blu-Ray player, as $30 a month is a hell of a lot more manageable than the cost of a Blu-Ray player (even if, over the months nad yer, you end up spending a chunk on broadband. People can afford small chunks of money over a period of time a lot easier than one big chunk at once).

As for the issue of image quality, as I said in my original post, I do indeed think people will be content with poorer image quality. In addition, a) As the technology develops (and indeed it's pretty much already at this point), the image quality won't be noticeably worse than DVD quality (similarly, MP2 did not take off as a musical format because quality was still very low. MP3 was the "close enough" demarcation point), and b) if you want to see a movie in a high quality format that actually makes a difference, go to the theater.

Nice post,
I think you are right about digital distribution growing faster than blu-ray. But this is all relative in my eyes.
People have up-converted dvd's with the ps3 making the transition less necessary right now.
But for Blu-Ray to realy shine it needs a nice hdtv, (and tons of people still dont have them)
But I do see the implementation of hdtvs in peoples homes starting to take hold.
So Blu-Ray could jump from nothing to something over night once the hdtv's and high definition television are widely adapted.

I don't see the same chance for digital distribution.
I believe blu-ray will jump and become 40% of the current dvd market in about 2 years time. At which point Digital distribution would also be widely available, but at a substantially smaller install base and rate.

I can see the movie rental stores being effected by DD though.

There is one thing that is almost a certainty.. DD will catch on at some point to some extent at which it is successful.

The same is not known of Blu-Ray.

paramount and sci-fi channel (owned by NBC Unviersal) didn't want to talk about blu-ray? No Way!!!

It was a good post, however I have to disagree with you. Downloads aren't going to take off for the movie industry. You compress audio a lot, with an ipod and pair of $10 headphones, no big deal. You compress video a lot and you can see the artificats of the process, it looks terrible on a big HDTV. You just spent 2k on a HDTV and you are going to care about quality to some degree. A song can get downloaded in 30 sec. and is a few MB at the most, an HD downloadable movie of any decent quality is going to be at least 15GB, which will take most consumers HOURS to download, even in the near future. Movie fans who own 100+ movies are looking at 1.5TB HDDs, hardcore movie buffs are looking at upwards of 10+TB HDDs, thats not cheap. I can take my ipod around with me, let friends listen to music on it if I want. However, lets say I just dl'd a movie and a friend wants me to come over, I can't just bring the movie over like I can with blu-ray. Then what happens when my HDD craps out. Also, you are probably going to have to pay for some type of download service too. Then, what happens when Apple, Sony, and Microsoft all offer HD download services and Sony refuses to support the other too. Disney only goes with Apples, Universal/Paramount goes with MS exclusively and who knows what WB and Fox will do. Got another format war on our hands.

We'll wait and see, but you may be right.
It makes perfect sense.
thus, Microsoft need to allow us to use external HD to download movies through 360.

Stockstar1138:

You make some good points, but I'm not just talking about HD digital downloads, I'm talking about the entirety of digital distribution. You might not be able to take over a ton of movies to a friend's place (assuming you don't want to watch the movie on your iPod--something I personally would agree with but not something that is hard and fast for all that download movies to iPods) but you would be able to go over that friend's house and download/stream a DVD quality movie from Netflix onto your computer or DVR. In this way, portability becomes a non-issue when it comes to the internet--it is ethereal, so your ability to watch the film is anywhere you can access it.

As for the potential format war for digital video formats, I doubt it would go down in quite as heated a manner. Primarily because first off, the PC/Mac divide doesn't work quite in that way. Disney might go iTunes exclusive, but iTunes is a free program available for both PC and MAc--indeed, it's prey much become the standard non-streaming media player for both OSes. So you don't have to worry about studios going with Mac vs. PC, as all digital files are available for both (hell, windows media player is easily run-able on Macs). I also don't think Sony would be so stupid to stay out of the digital format game because of Blu-Ray. That'd be cutting off their nose to spite their face. They're already losing money hand over fist in their music and music related technologies departments (whither the discman?), ignoring digital media in order to push Blu-Ray could spell complete collapse on their part (as it is, pre-PS3 the games division was the only division of Sony that wasn't losing money. That was true even for both the studio and theater chain divisions.

And it's not that higher ups at Paramount and Universal "don't want to talk about" Blu-Ray, it's that they don't talk about it. There's a difference there. When they talk about the shape of the future, it's not something they're afriad of, it's just a thing on the way to something much bigger and more lucrative. And, in addition, it's not just big wigs t competing companies, it was analysts as well (also, the former head of Paramount has no love for Paramount-sans-himself)

People seem to be far more visually orientated than audio orientated. The market is moving from PAL or worse NTSC TV sets towards much better HDTV technology. Without high definition content the much better resolution provided by these TVs is largely lost.

Blu-Ray movie playback allows consumers to get the best possible picture quality on their HDTV sets. I think it's crucial not only for the gaming industry but the movie industry as well. Blu-Ray adoption is now happening faster than was the case for DVD adoption, within a couple of years it will probably have gained a majority share of the overall DVD market.

Digital distribution of movies and games is a nice low cost feature for distributers and consumers. However it's not a mainstream approach. Worldwide its potential is very limited, even for the US with a high penetration of high speed internet usage, most ordinary consumer still will prefer to rent and buy their movies on (scratch resistant) disc for many years to come.

Just look at the 360, a product marketed to death for its Live service, yet even in the US there's a very large chunk of its userbase which does not use the internet at all. About a third subscribe to Live Gold to play online games.

Roadblocks:
1) A large chunk of potential consumers does not have internet access at home, another large chunk only have very limited bandwidth and/or limited download quota. Such people often only use the internet to read webpages and email.

This goes even for the countries with the highest internet penetration. Current avalable movies are far below Blu-Ray audio-visual quality standards, this to limit the download time.

2) Technical issues, XBox Live down? Internet provider down? 360 died? Harddrive dead?

3) DVD retailers and rental services, they are going to push for Blu-Ray in full force. Digital distribution, cutting them out of the market would be a horror scenario for them.

IMO would the market go fully digital, the big losers will be the consumers and this would cost many jobs. IMO it's not going to happen in a very long time.

Rock_on_2008 said: You are incorrect, Blu-Ray is really important to the PS3. Blu-Ray will significantly improve future games in regards to both visual and audio and the storage capacity of Blu-Ray is around 50GB on PS3 games. DVD's maximum storage capacity is only 8.5GB.

Technical superiority definately is the reason for Wii to beat PS3 in sales. Well, this would be the case in order to make your claim true. @makinmusic: Your reply was ignorant, since it ignored 95,5 percent of worlds population for the rest 4,5. The thing is, that even mobile network offers DSL speed downloads, while all the new mobile devices (with apparently exception of i-phone) are made to support these speeds. And networks around the world are too made to support these speeds. So the channel for DD is quite ready, or at least will be in the future. Now, let's take Bollywood for example, which apparently is the most productive in the world in the movies industry. Their domestic market is big, but poor, and only a few movies get to international distribution, since the distribution channel isn't ready to invest required amounts of money into Bollywood movies. The same could be said about every smaller countrys films industry, even the movie would turn out to be a hit in its own country, international distribution requires the amount of money that a) the domestic distributor can't afford b) big international distributors don't want to invest, since investing in the big hits keeps costs lower and competition smaller. So, DD is not just new distribution channel, but an industry revolution (goldmine for the smaller players), which is something that the current distributors don't want to happen. Although, looking at music industry, i don't think the movies industry wants to be the one to oppose DD, since it's definately going to take over, but the real question is, that how fast it's going to happen. BD will definaly take over DVD in time, but will it happen before DD takes over both, after all, people aren't hurrying to update their players (although, BD may find a new market being the medium to store the DD content).