Hollywood Embraces Blu-ray…and Format Obsolescence, Too?

52 Comments

blue-ray.jpgWith news that Universal is planning to sell its movies in Sony’s Blu-ray format, and Paramount sidling in that direction as well, Blu-ray has managed to bring all the Hollywood studios under its own standards banner, rendering its supremacy in the format war against HD-DVD indisputable.

Maybe I’m missing something, but this strikes me as a disastrous victory for Blu-ray and Hollywood alike, borne from ignorance of the game industry and a myopically arrogant assumption that movies per se still drive the high-technology market in video. The studios are putting their weight behind a standard which is now almost certainly destined to remain niche for years — if it doesn’t go totally defunct in the process.

Why? Well, consider who owns Blu-ray players: The bulk of the format’s install base are owners of Sony’s Playstation 3 game console, which has the drive built in. (In the U.S. there are 3 million PS3s, compared with just 500,000 standalone Blu-ray players.) But as anyone who follows games knows — none of whom work in the film industry, apparently — the PS3 is selling horribly in comparison to other install bases.

Last holiday season, the 8-year-old PS2 was still selling better than the PS3, for God’s sake. For the second year since going on sale, gamers have decisively rejected the PS3 for the Xbox 360, which currently has double PS3’s 9 million-unit install base (and can play HD-DVD with an upgrade), and even moreso for the phenomenally popular Wii, which plays neither high-definition format. (Follow the console war numbers on VGChartz.com.)

At least PS3 gets the Blu-ray to a good headstart, right? Well, sort of. But as far as Hollywood’s concerned, here’s the worst part: According to an NPD report from last August, 60 percent of PS3 owners are not even aware their console has a Blu-ray player. A marketing campaign would boost awareness and excitement for Sony’s high-definition DVD, of course, but to expand this market, the company will have to target early adopter hardware fans, who are generally males aged 18 through 34…many of whom already own an Xbox 360 or a Wii. Thanks to Sony’s format bullying, there are now some 30 million-plus next-gen console owners who must somehow be goaded into spending $600 or so on another game console, mainly so Transformers looks a bit better on their HDTV. (If they even own a high-definition TV, yet another consumer adoption hurdle.) Hard to see that happening, even with a Blue-ray price cut.

So what happens now? There’s hints that Microsoft may make the 360 Blu-ray compatible, but even if that happens, it’s unlikely to move the market much. Instead, broadband connection (360 and the Wii both have them) will route around the need for any disc format, with 360 owners preferring to buy high-def content from Microsoft’s fairly successful video download service, Wii owners enjoying Net-delivered video with StumbleUpon’s widget, and everyone else sticking with HDMi cable. Meantime, in their ambition to dominate by eliminating alternatives, Sony has probably remanded itself to owning the market for a niche format, like the Laserdisc of the 80s and 90s that never appealed to anyone beyond hardcore videophiles. (Anyone but me even remember those?)

Wagner James Au is GigaOM’s games editor and writes about Second Life for his blog New World Notes.

52 Comments

bmr76

I dont understand how a unified format is a bad thing. I work retail and as long as players and disc prices come down, blu ray will last for a while. Customers will not want to pay full price for something they download and dont physically own. When you talk about the install base being ps3, well their are 500,000 standalones in homes and rising, and those people are considered early adopters. The fact it is still packaged media, and will be available everywhere is why it will succeed.

Media Research guy

This discussion is a little speculative, and frankly, a little strange. It is probably too early to tell whether a next-gen DVD format will take off, but it might be work pointing out that the paid video downloads market is very small and appears to have seen very limited growth in the past year or two.

Having recently worked for a few TV networks (one of which collects nearly $500 million in revenue per year from DVD sales), I will say that the paid downloads model would perhaps not surprisingly be a better business for the studios because the margins would be far higher (no manufacturing costs, no shipping costs, fewer middlemen, no product returns, etc), but adoption is limited and is unlikely to affect the DVD market–including Blu-Ray–for a few years at least.

Rorkimaru

the 360 plays Hd DVD with upgrade but the upgrade is a bad HD player. it recieved a Zero out of 100 from many A/V websites. not only that it doesent sell well. the 360 install base is bigger tahan the PS3 but the w60 with HD DVD drive is tiny.

this article is writen by an ignorent fool

invasiveinfection

The nice man writes with big words. Quickly! Everyone lobby behind him so as to sate his grammatically correct ego!

Steve

While there are a couple of errors in this article which seem to have got the rabid fanboys all worked up (not allowing for the $400 PS3 lite being one that comes to mind) I have to agree with the bulk of it.

Sony’s efforts to force early Blu-ray adoption on consumers has lost them their dominance in the console market and i believe that most consumers are generally disinterested in updating to an HD format any time soon, whether there is a clear winner or not.

Now, i expect to be labeled a Microsoft/Nintendo/HD DVD fanboy or retard by the hordes of angry Sony cheerleaders currently residing in this blog, even though i haven’t owned a console since the 16bit era and probably have 20 or so more years in retail than most on this thread.

Harry Weiner

I only read about two paragraphs before I stopped. Here are three Pointers for you Wagner James.

  1. Do some research next time before you write another article again….

  2. Don’t be a fanboy.

3.EAT SHIT AND DIE!!

Tom

I have no vested interest in either format but this really is the dumbest review I’ve ever read. Please write intelligently next time so you don’t waste anyone’s time.

Ten fold hate

Good god almighty you Sony fanboys are cranky. You guys are the main reason I got an original Xbox and completely skipped the Ps2.
Yes, thats right, your so fucking obnoxious that I was willing to ignore EVERY SINGLE GAME in the Ps2 library. If Sony dominates again I will quit gaming. How is that for being a MS fanboy, assholes?

Eric Mortensen

Wow. This post has attracted the wrath of the fanboys! Did this get posted on Digg or something?

It’s important to note that Sony made similar mistakes with with the failed MiniDisc and DAT formats (although they had varied success in repurposing the formats for professional use). And recent media formats like DVD-Audio and Super Audio CD have failed as well.

Paul

Ouch, this author must have been on the losing end of the Hi-Def wars. See what the experts mean when the consumer is the loser when there are two incompatible formats?

Anyway, I won’t repeat the corrections made above already, but we all have a sense here that the PS3 will eventually win out and reign supreme. All HD-DVD and Xbox 360 fanboys can do now is watch as the PS3 train runs them down. The momentum is just not there for the 360 as there is the PS3.

Matt_

I think is the only smart company in the Hi Def content wars is Nintendo who didnt providfe disk playback but included a browser and have a streaming video channel in Japan where they have the required bandwidth to allow flawless upscaled streaming video .

Im sure Nintendo is developing a High Def capable Wii and will release it when the market is ready for it and the HI Def prentration rate is higher …at the moment Hi def is 30% of the market .

VinceP

I meant to say “more than twice as many XBox360’s sold after it was out after one year”.

VinceP

Let me get this straight. The XBox360 had a full one year head start on the PS3, but is now only at 16M units. The PS3, with one less year to sell, is now at 9M units (more than twice as many as XBox360) and selling more rapidly (1.2M during the holidays), and you’re relegating it to “niche” status?

And you point to the high end PS3 price but ignore the $399 PS3 that has really allowed the product to take off. Add to that the fact that Sony is going to be able to lower their costs, we can probably expect another price decrease this year that will make it sell even more.

I don’t really see why some people need to try and belittle what Sony has done here. Their success with the PS1 and PS2 will be replicated with the PS3. I would not be surprised to see more PS3s sold than XBox360s and Wiis in the coming years.

And saying that the PS3 is being beaten by PS2s and XBox360s is foolish without saying why. There aren’t that many games yet for PS3, not at launch and not after its first year. However, this is going to change this year, as more developers see that the PS3 is, indeed, a viable platform.

James Gardiner

Well Wagner James, the comments are very negative.
I too would have to say the articel was not well considered and missleading in some areas, but you did get some ponits correct.

Some one asked me about Xbox and BD just asfter the U.S. finally realised DB won. (The U.S. seemed a bit slow on realising this. Read my blog for more details on DB)

After doing my predictions of digital media in 2008, I have been looking into the Xbox and PS3 considerably.
From my perspective, the Xbox in all areas, is out doing the PS3. Especially as the Xbox does DivX AND Xvid playing any torrent file you which to download while the PS3 is not compatible with xvid. (Tested it myself over christmas. Got both units)

In real terms, as Xbox is now so dominent, I predict that Microsoft is likely to rush BD into the Xbox as standard.
This would kill the ONLY good reason to purchase a PS3 that is left.
I too am from Australia like Wagner James above. I find it hard to believe that only a small % know about the PS3 BD capabilities. Here we have a 95% BD penetration. (stats from friend that works at Pioneer) And that 95% are mostly using PS3’s in my book as.. The marketing would have gotten me to get a PS3 if I was in the market. It was very well marketed here. Every big TV store had PS3 in the windows playing DB on huge 50insh plasmas. Hard to miss.

Now, considering these comments I expect to be called a Microsoft Fanboy. Sorry, far from it. I have posted long articles on why I think microsoft will not be dominent. But thats a long story and you can hit my blog if you want to know more. (Click my name above).

James

naruto

come on wake up will u.. downloadable content wont be here 4 another 10yrs. just look at xbox live over the holiday period they couldnt keep up with the registration, u talking at a very very low % of users.. the only way it going to work is every country have to upgrade their broadband speeds .. besides what happen if your friend want to borrow a copy of the movie to watch it. give them your xbox or ps so they can watch it.. isnt better if u go to the shop buy yourself a copy then lend it to them.. u talking hd contents here massive amount of data 30-50 gig not from the internet where 700mb is the average..

Wagner James Au

“600 dollar PS3? Was this article written last year?”

No, last Wednesday, when a check on Amazon priced the PS3 at $590. In any case, the important numbers are these:

EST. INSTALL BASE
PS2 (plays DVDs): 130 million units
Wii (plays no movie discs): 20 million units
360 (plays DVDs without upgrade): 16 million units
PS3 (plays Blu-ray): 9 million units

Any claim that the Blu-ray is selling much better than HD-DVD belies the reality of the above numbers: it’s only doing well in a niche market.

Regular GigaOM readers will immediately discern the delicious irony in accusing me of 360 boosterism (i.e., e.g., http://gigaom.com/2007/07/24/is-xbox-360-is-doomed/)

Alex

LMAO. All I read was “whaa, my HD DVD player I spent $50 on surely can’t be a doorstopper” “Whaa, I hate you Sony, you big meanie” “Whaa…” Seriously man, get a grip. Try to look over those numbers too, or else you’ll be confused for a fanboy instead of a journalist. O wait….

LMAO, putz

Evolution

The Problem with Blu Ray and Hd DVD is that neither of them are at all much better than DVD. I have both Blu Ray and HD DVD in my home, and Films such as Transformers and King Kong for Hd, and Spider-man and X Men 3 for blu ray look and sound great. But they’re high profile titles, smaller films, tv programs and music simply don’t benefit as much if at all… upconverting dvds is enough if you have an HDTV.

And what Blu Ray thinks it has achieved by winning the HD war i’ll never know, because after 10 years of bringing out dvds, there is no way people who aren’t fanboys in home entertainment, such as myself, are going to adopt the product even at a low price tag…

poketmon man

Follow the console war numbers on vgchartz? You have got to be joking. vgchartz is a joke, hack site.

Scott Beckstead

No matter how good the MicroSoft backed HD-DVD is it is not as good as Blu-Ray. Your numbers are off and you obviously are a Microsoft Shill. Go away!

Nick

Article is just plain wrong sadly.

  1. Most of the Blu-ray players out there being the PS3 is a bad thing? I dont see how. Early in the development of players, the PS3 was simply the best player on the market. Of course it sold well. It’s not like the supar DVD player that the PS2 was. PS3 is actually a REALLY good Blu-ray plare. And the sales back it up. I’ve spoken to many people who own more than one. One for their kids to play games, and another to play Blu-ray’s.

  2. 60% of PS3 dont know the PS3 even plays Blu-rays. Again, bad? How so? I see this as a 60% chunk of people already OWN Blu-ray players and dont even know it. And Blu-ray disc sales STILL double HDDVD sales. So when that 60% finds out, do you thiunk sales will go down? If my math is correct, they should go UP around 60%! LOL

  3. 600 dollar PS3? Was this article written last year? The PS3 hasnt cost 600 dollars for a while now.

  4. It’s not SOny’s high definition DVD format. Lots of companies were behind it’s creation.

  5. It’s Blu-ray, not ‘Blue-ray’. You might want to educate yourself on a subject before trying to sound like an authoriative and knowledgable source of information.

Tim

I laugh every time I see someone write, yet again, that downloadable content will make physical media obsolete before Blu-ray ever really takes hold. It’s like they don’t know any normal people. Go to a consumer electronics store sometime, take your pick, any one will do. Until movie downloads are near-instant and stupidly easy and very well advertised and actively pushed by consumer electronics stores on people who don’t know any better (which accounts for the vast majority of people), Blu-ray need not be too worried about it’s existence. Downloads will definitely win in the end, but that isn’t nearly as soon as some people keep making it out to be. If not because of clueless consumers, then because of the sheer size of HD content and the meager bandwidth referred to as “broadband” these days. Until a significant percentage of people have 30 – 50MBit/s connections, HD movie downloads really aren’t going to fly.

tada

you are a real dumb ass.
1. you write PS3 is not selling because gamers don’t like it
2. then you say PS3 owners don’t care/know about the BD player -> implies that they care more about gaming
3. you conclude that they will lose when they just won.

=> you are the dickest fumb duck

Justin Davey

Maybe Sony will use a little bit of the money saved from slimming down their PS3 lineup for marketing purposes. Or maybe Blu-ray will end up defunct in the end, just as will HD DVD and now (why oh why!?) and HD VMD. DVD’s and upscaling DVD players will outselling all high-def formats until digital media is advanced enough that physical media will die altogether. With the exception of our internet-enable HDTV’s, of course.

smoothn00dle

Wagner James has no idea of what he is talking about! Download movies is not like downloading songs, require huge bandwidth and time. Download movie online required credit card, most people don’t feel safe. Download movie has no bonus materials like director’s interview and BD-java games. U think movie studios and Walmart will embrace download full heartedly, they stand loose billions. Game reviewer should stick to games.

Bill G

Completely agree.

Standard DVD technology will do just fine until the idea of buying bits on shiny lucite covered discs is rendered charmingly obsolete.

VinTheDean

You seem like a disgruntled Xbox or HD-DVD fanboy. There are several things taken out of context in your article.

Sales
Xbox 360 has been out for two years and PS3 one year. Of course they are going to have more sales. The sales would be more impressive if this would have occured in one year.

The ps2 & wii still sells better because parent’s can’t afford to pay $$$ for the PS3.

Media
Internet based delivered media is the future but it will not be here in time for this generation of Consoles. Plus the wii and some of the xbox don’t have drives so the industry can not rely on these console’s to push this ideal.

There is way too much investedin the Blu-Ray format. Too many companies to just abandon it in the next year or so. Blu-Ray will be used for at least the next 4 to 5 year if not longer. Maybe after that will the movement for broadband delivered content can truely take off.

With the price of hard drives declining and the space of hard drives increasing, I agree with you that the future of media is streamed media. I just don’t agree that the Xbox and Wii will dominate this market.

Scott

Please if you an Xbox fanboy just say so. dont try and make a point that cant be made. already games have came out that required the size fo the Blu-ray RFOM is the first at 16 + GB so the format will be used for more and more games. and you statement that the PS3 is selling ” horribly” it is selling at a higher rate then the Xbox 360 did its first year. I have 5 Blu-ray movies. the rest of you artical is not even worth commiting on. please if you are going to through around numbers get them right.

Adam

Blue Ray media is outselling HD-DVD media by a ratio of 2:1. While you may believe that BR is bad for the industry, it’s better than HD-DVD which simply wasn’t selling.

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