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A Lull for Blu-ray, Good or Bad?
Author: Steve Wilson, Principal Analyst, Consumer Video Technologies
Wed, 14 May 2008 14:40:34 EDT
I'm glad NPD came out with its numbers after I had forecasted Blu-ray to be another 12+ months from take off. No one liked my jumping the bandwagon. But this isn't a lull for Blu-ray; it hasn't even gotten going yet. Oh – did you just mean disc playback? Sure, they can do that, most of the time. And of course PS3 sales have buoyed the whole standard. But BD vendors are a good 12 months away from a robust platform that supports BD Live out of the box and retails at a price point the average consumer might consider. A sales associate at a major retailer told me a shipment of seven Sony players priced at $699 was gone within a couple days. Now is that short supply or high demand? Who cares, that’s seven players.
No one seems to think this "lull" is good for the market. Look, if the CE manufacturers really wanted to sell the players, they would lower the prices and eat the cost. But, in fact, they don’t want to sell the current designs; they want to sell the new designs. And even those prices are still north of $300, for the most part, because costs are still high; but there is little competition to bring down prices. Do studios want a large install base of players that won't access their BD Live content? Do CE manufacturers want dissatisfied customers who later find out their machines aren't upgradable to these new features? Sounds like a good reason to buy another brand. The market needs to build an install base of BD Live players. Although studios may not have concrete revenue plans based on BD Live, it’s hard to escape the fact that consumer touch points are going to increase dramatically once the feature takes hold.
Whatever Warner’s motivation was, it chose a format that needs another year in the oven. But this doesn’t mean BD will die in favor of DVD as some speculate – or never catch on. Sure, consumers will stick with DVD until something better comes along. But something that costs three times as much better do more than give me a better picture…especially when I didn't even know there was a problem with my current one.
Before the Warner announcement, BD player sales were poking along, commensurate with price points, and most of the install volume consisted of PS3s. Holiday sales and the Warner tiebreaker gave the BD ball a little kick, but now it’s coming to rest again. That momentum wasn't consumer enthusiasm; it was seasonal sales and an artificial shot in the arm. PS3 sales are now rapidly growing while BD STBs have gone back to poking along. This will change when player prices finally get a '1' in the hundreds column – maybe this Black Friday 2008, but not in earnest until late 2009
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