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Forums - Sales Discussion - Does the Wii prove that the HD razor/blade model is flawed?

Kasz216 on 29 December 2009
theprof00 said:
Kasz216 said:

Also, it should be noted, that while you think Blu-Ray will eventually vindicate Sony... there are a LOT of hurdles in the way. More then you'd think.

Blu-ray is STILL well behind it's predicted targets in 2007... and the loss of China is a HUGE loss. CBHD could actually become the leading world wide format leader... just from China.

There are additional worries that China may export the format to other poorer nations. Which, said nations may gladly accept, sick of being poorer yet still paying more on a per unit basis.

CBHD is scary because Toshiba just sold them the HD-DVD technology for an incremental fee. They don't even pay royalties per disc.

It really was a sly move by Toshiba.

http://news.cnet.com/8301-17938_105-10303224-1.html

I really don't care to know all the details. BR will be the standard. That's all I care to know.

That is the trend and the current and future market.

 

CBHD is a complete joke. It is yet another last stand by the DVD Forum to block BR. Revenue on movies in America is roughly 4 times higher here than the same movie in china on cbhd. CBHD is only viable in poor countries and will never takeover over here, the format war is done, it's been done. CBHD has Warner and Universal and Nat Geo as far as Hollywood goes. But of course, Universal, just before the death of HDDVD, was the ONLY studio supporting HDDVD, everyone else had pulled out.

The push for CBHD by a vocal minority only contributes to market confusion and will raise prices. Isn't it painfully obvious that people are saying "the format war is back on"? They've said it for so many formats already, CBHD is simply the next format in line. It simply isn't feasible to contest BR, when you're talking a difference of 10,000 western titles compared to a few hundred, and a difference in revenue of 15-20$.

 

Your an amusing person... you have an odd amount of arrogance for a product you have no connection to.  You should look at things more clearly.

I don't think you really realize the problems with this.

Blu-ray will be the standard... but not in the same way DVD was the Standard.


CBHD's revenue is lower.... but Blu-ray actually makes the same amount per unit blu-ray wise in China as they do in the US.  The loss of China is HUGE.

Additionally, they are losing a lot of Chinese manufactuers... who once again, was a big part of the DVD lisensing sucess.

If CBHD becomes the standard for China...  or even worse... China and other poorer countries... the BDA loses a LOT of money.


This is not counting the fact they've had to cut prices quicker then DVD, and won't have near the share of DVD thanks to the numerous other options out there.



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theprof00 on 29 December 2009
jarrod said:
theprof00 said:
jarrod said:
theprof00 said:
Kasz216 said:

Also, it should be noted, that while you think Blu-Ray will eventually vindicate Sony... there are a LOT of hurdles in the way. More then you'd think.

Blu-ray is STILL well behind it's predicted targets in 2007... and the loss of China is a HUGE loss. CBHD could actually become the leading world wide format leader... just from China.

There are additional worries that China may export the format to other poorer nations. Which, said nations may gladly accept, sick of being poorer yet still paying more on a per unit basis.

CBHD is scary because Toshiba just sold them the HD-DVD technology for an incremental fee. They don't even pay royalties per disc.

It really was a sly move by Toshiba.

http://news.cnet.com/8301-17938_105-10303224-1.html

I really don't care to know all the details. BR will be the standard. That's all I care to know.

That is the trend and the current and future market.

 

CBHD is a complete joke. It is yet another last stand by the DVD Forum to block BR. Revenue on movies in America is roughly 4 times higher here than the same movie in china on cbhd. CBHD is only viable in poor countries and will never takeover over here, the format war is done, it's been done. CBHD has Warner and Universal and Nat Geo as far as Hollywood goes. But of course, Universal, just before the death of HDDVD, was the ONLY studio supporting HDDVD, everyone else had pulled out.

The push for CBHD by a vocal minority only contributes to market confusion and will raise prices. Isn't it painfully obvious that people are saying "the format war is back on"? They've said it for so many formats already, CBHD is simply the next format in line. It simply isn't feasible to contest BR, when you're talking a difference of 10,000 western titles compared to a few hundred, and a difference in revenue of 15-20$.

I agree, the format war's pretty much settled (at least in the west and Japan/Korea), but to say CBHD's only viable in "poor countries" is bit off the mark.  China's the richest country in the world, by a gigantic margin, and they've managed to weather the global recession better than anyone (Communism can save Capitalism, who knew?).  They also have a huge fucking audience alone, not to mention other fast emerging economies that the format's targeting (India, Brazil, etc)... it's entirely possible (and even probable) that globally, CBHD will manage a higher total userbase than BD.  Not that it matters much to us, the market will still break down in BD's favor in any nations likely to influence our tastes.

Yes, sorry, my frustration over 4 year old arguments got the better of me. What I meant about "poorer countries" was that there is a huge market that cannot yet afford BR. In that case, supporting cbhd is a smart business investment as long as your studio has something valuable to offer. However, CBHD will never challenge BR in NA,Europe,Japan.

 

EDIT: haha, I notice you editted your post to include a lot of "fucking" lol.

Yeah true.  Even DVD didn't take off in emerging markets until late due to the high royalty structure.

I view CBHD as basically the new VCD in a sense.  Low cost makes it really attractive option for the right markets, but the powerbases in America, Europe and Japan (ie: Hollywood and the big Electronics firms) will fight it's adoption anywhere else at any cost.  It's does hurt BD in a way though, as they likely planned to echo DVD's late term spread into these "secondary" markets eventually.

Ugh..you mentioned VCD which reminded me of SVCD which was Toshiba's secondary attack on BR after HDDVD failed....like I said. There's a long list of "competitors" that have already failed.

But yeah, it will be interesting to see how this pans out. I know that the BDA royalty drop was due in part to aggressively take the market, possibly to get into position to counter CBHD. Time will tell. Thanks for your input. Breath of fresh air, really.



bdbdbd on 29 December 2009

@The Prof: With chinese currency i mean that, Sony obviously is making electronics in China. The Yan (Yuan?) rate against USD have been pretty standard in recent years. It's impossible to make more losses, if the currency you use to pay the bills fluctuates with the currency you sell stuff. Of course, i don't know where and how much of the work is done in Sony products.
But what it effects, is profit made with foreign currency.

The current situation resembles 2002, when Yen was weak against USD but strong against Euro (currently the situation is little worse, however). I took the 2005 to 2008 period because at the moment Yen against Euro is at 2005 level and between 2005 and 2008, the Yen-USD exchange remained somewhat constant, while Euro was going up against both, (starting at around 130 Yen per Euro) peaking at around 170 Yen per Euro in 2008. Sony should have had ever increasing margins during the period.

And as i mentioned in the earlier post, i'm not putting the blame on recession, as much as put blame on bad business decisions by Sony. Increased PS3 (software and hardware) sales should be making a lot up for the hit it's taking from recession and bad currency exchange rates, but that isn't the case. Ever since release, PS3 have been a financial burden for Sony and it likely will be still for a while.



Ei Kiinasti.

Eikä Japanisti.

Vaan pannaan jalalla koreasti.

 

Nintendo games sell only on Nintendo system.

Kasz216 on 29 December 2009

Also... CBHD is expected by many to actually be the dominant market leader by this time next year when it comes to HD stuff... because China is so huge.

I'm not sure if you realize that. This is all money that would be going to Sony... sooner rather then later. Chinese buying habits actually mirror the US buying habits.

Blu-ray had as much market penetration in China as it did in the US, at similar price points.

China is one of the biggest movie markets in the world... even with it's piracy.



theprof00 on 29 December 2009
Kasz216 said:

 

Your an amusing person... you have an odd amount of arrogance for a product you have no connection to.  You should look at things more clearly.

And you have a lot of faith in an unproven product. Seriously m8, my arrogance isn't against you. I've been talking to people about this since BR's release. At first I myself thought "this will never take off". However, as time went on, the trends were easily visible, and there were a large number of people touting HDDVD despite they were losing a lot of money on each player, had a very small royalty rate, and were literally giving players away for free. Near the end, they were selling HDDVD players with 20, (20!) free HDDVDs.

There is also another number of people who simply hate Sony with a passion and I saw people buy 3 or 4 HDDVD players and hundreds of movies simply to help Toshiba win the fight. It is really disgusting how some people work. For a good year and a half, the same people made the same threads "_______ will beat BR" or "PS3 failing, ________ wins".

I don't think you really realize the problems with this.

Blu-ray will be the standard... but not in the same way DVD was the Standard.

It really doesn't matter. That's like saying, "Oh, the PS3 will be successful, but not as successful as the wii/ps2". Who cares??? Why is everything always compared to some surreal unobtainable standard? (I say unobtainable in the nicest possible way. It may actually be obtainable if things go really well for the format)


CBHD's revenue is lower.... but Blu-ray actually makes the same amount per unit blu-ray wise in China as they do in the US.  The loss of China is HUGE.

China is acting very mercantilist, that is why they did it. Keep wealth in the country, export, do not import. Yes the loss of China is huge, but it has nothing to do with CBHD, it has to do with national strategy. CBHD will be big in China and several other countries, but it will never be a true competitor. It is not BDA's fault that China did this. DVD licensing fees were actually higher than BD, BD did everything they could. BR is fucking BANNED in China.

Additionally, they are losing a lot of Chinese manufactuers... who once again, was a big part of the DVD lisensing sucess.

If CBHD becomes the standard for China...  or even worse... China and other poorer countries... the BDA loses a LOT of money.


This is not counting the fact they've had to cut prices quicker then DVD, and won't have near the share of DVD thanks to the numerous other options out there.


After the 3rd to last line, I was ready to give up. So BR won't be as profitable as DVD. Wonderful...and don't care. They aren't losing money, they are losing potential profits.

 



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Kasz216 on 29 December 2009

Blu-ray isn't banned in China. What are you smoking? How can CBHD be outselling a product 3 to 1 that is banned. Though actually yes this is the BDA fault.

China said from the start "You'd better not charge DVD standard royalties or we will go to our own standard. Blu-ray responded by charging MORE then DVD standard was when they were making it.

Less manufactures also means it costs more to make each blu-ray drive now... since there will be less people undercutting each other. Which means, Blu-ray drives will cost more, slowing adoption (which is actually behind targets.) etc. etc etc.

It all leads to losing potential profits and delaying other profits in a very time sensitive business.

Your failing to see how this is relevant.

They are losing potential profits... which means there is no guarantee that Blu-ray will "vindicate" Sony.




alephnull on 29 December 2009
Kasz216 said:

The fact that you called it Microsofts HD video format.... pretty much shows how much you know about the subject.  (little.)

Microsoft appears to have seen the format in the context of the wider Java versus .Net war, which is a major front of the OS wars.



theprof00 on 29 December 2009
Kasz216 said:

Blu-ray isn't banned in China. What are you smoking? How can CBHD be outselling a product 3 to 1 that is banned. Though actually yes this is the BDA fault.

China said from the start "You'd better not charge DVD standard royalties or we will go to our own standard. Blu-ray responded by charging MORE then DVD standard was when they were making it.

Less manufactures also means it costs more to make each blu-ray drive now... since there will be less people undercutting each other. Which means, Blu-ray drives will cost more, slowing adoption (which is actually behind targets.) etc. etc etc.

It all leads to losing potential profits and delaying other profits in a very time sensitive business.

Your failing to see how this is relevant.

They are losing potential profits... which means there is no guarantee that Blu-ray will "vindicate" Sony.

sorry, you're right, br isn't banned. CBHD is a government sponsored, subsidized format in a totalitarian state. I got carried away. Again, I apologize.

I've already admitted that anything can happen. I said that people believe that BR will vindicate Sony, eventually. May not happen. But I'd also like you to meet me halfway and say that there is no guarantee that it is 'a giant wash' too.

 



alephnull on 29 December 2009
bdbdbd said:

@Alephnull: I'm not sure are you serious or just trolling with the revenue, peripherals and the business model. Revenue is pretty much irrelevant measure in some things popularity. Especially when the talk is about profiting with products. The whole point is about selling stuff cheaper and still make bigger profit per unit sold.

In razor and blades model, the whole idea of selling at a loss is to have a price advantage over the competition. By selling the product at a higher price and still make losses is very badly done. If next gen, Nintendo sells their products with profit and competition is selling with a loss and higher price, they still face the same problem.

My point in asking about revenue is that it gives us a hint at what demand might be, and that it is relatively independent of cost. When I had to help do a analysis of the Virtalization market for a budget proposal we didn't look at unit sales for ESX. I didn't make this up to troll nintendo. And quite frankly I haven't made up my mind about anything Squilliam said yet.

I think Squilliam will vouch for me when I say that it'll be a cold day in hell when I start trolling on MS's behalf. I honestly think they may have the largest share of the market, in a strategically more important sense than maket share as measure by unit sales.



Kasz216 on 29 December 2009
theprof00 said:
Kasz216 said:

Blu-ray isn't banned in China. What are you smoking? How can CBHD be outselling a product 3 to 1 that is banned. Though actually yes this is the BDA fault.

China said from the start "You'd better not charge DVD standard royalties or we will go to our own standard. Blu-ray responded by charging MORE then DVD standard was when they were making it.

Less manufactures also means it costs more to make each blu-ray drive now... since there will be less people undercutting each other. Which means, Blu-ray drives will cost more, slowing adoption (which is actually behind targets.) etc. etc etc.

It all leads to losing potential profits and delaying other profits in a very time sensitive business.

Your failing to see how this is relevant.

They are losing potential profits... which means there is no guarantee that Blu-ray will "vindicate" Sony.

sorry, you're right, br isn't banned. CBHD is a government sponsored, subsidized format in a totalitarian state. I got carried away. Again, I apologize.

I've already admitted that anything can happen. I said that people believe that BR will vindicate Sony, eventually. May not happen. But I'd also like you to meet me halfway and say that there is no guarantee that it is 'a giant wash' too.

 

I already stated it as such... many many posts ago.  When I said it currently looks like a giant wash.  Also I don't believe you can call is subsidized when it makes a profit.

 

For it to not be a wash, things need to turn around. Blu-ray has won the format war, but at present it may be a Pyrrhic victory.  It's moving to slowley and has to worry about profits being eaten away from too many players right now.  It would of been better off having a lisensing structure like HD-DVD from the start.  It still wouldn't of reached DVD levels, but HD-DVD would of went down much faster and China wouldn't of went rogue.  China went rogue BECAUSE Blu-ray won the format war.

 

Also, while China is a totalitarian state... it is not so when it comes to consumer goods.  To think so is to not understand the Chinese market.

China keeps control of it's people by force, but also by promising them stability and prosperity.  They aren't your average dictatorship.

Foreign goods selll extremely well vs Chinese products.  The Chinese as consumers are much less brand sensitive and price senesitive then your average consumer... it's actually what makes the Blu-ray losses so distrubting.