Blu-ray is dead - heckuva job, Sony!

Blu-ray is dead - heckuva job, Sony!

Summary: Blu-ray is in a death spiral. 12 months from now Blu-ray will be a videophile niche, not a mass market product.

SHARE:

Blu-ray is in a death spiral. 12 months from now Blu-ray will be a videophile niche, not a mass market product.

With only a 4% share of US movie disc sales and HD download capability arriving, the Blu-ray disc Association (BDA) is still smoking dope. Even $150 Blu-ray players won't save it.

16 months ago I called the HD war for Blu-ray. My bad. Who dreamed they could both lose?

Snatching defeat from the jaws of victory Delusional Sony exec Rick Clancy needs to put the crack pipe down and really look at the market dynamics.

In a nutshell: consumers drive the market and they don't care about Blu-ray's theoretical advantages. Especially during a world-wide recession.

Remember Betamax? SACD? Minidisk? Laser Disk? DVD-Audio? There are more losers than winners in consumer storage formats.

It's all about volume. 8 months after Toshiba threw in the towel, Blu-ray still doesn't have it.

The Blu-ray Disc Association doesn't get it $150 Blu-ray disc players are a good start, but it won't take Blu-ray over the finish line. The BDA is stuck in the past with a flawed five-year-old strategy.

The original game plan Two things killed the original strategy. First the fight with HD DVD stalled the industry for two years. Initial enthusiasm for high definition video on disk was squandered.

Second, the advent of low cost up-sampling DVD players dramatically cut the video quality advantage of Blu-ray DVDs. Suddenly, for $100, your average consumer can put good video on their HDTV using standard DVDs. When Blu-ray got started no one dreamed this would happen.

Piggies at the trough The Blu-ray Disc Association hoped for a massive cash bonanza as millions of consumers discovered that standard DVDs looked awful on HDTV. To cash in they loaded Blu-ray licenses with costly fees. Blu-ray doesn't just suck for consumers: small producers can't afford it either.

According to Digital Content Producer Blu-ray doesn't cut it for business:

  • Recordable discs don't play reliably across the range of Blu-ray players - so you can't do low-volume runs yourself.
  • Service bureau reproduction runs $20 per single layer disc in quantities of 300 or less.
  • Hollywood style printed/replicated Blu-ray discs are considerably cheaper once you reach the thousand unit quantity: just $3.50 per disc.
  • High-quality authoring programs like Sony Blu-print or Sonic Solutions Scenarist cost $40,000.
  • The Advanced Access Content System - the already hacked DRM - has a one-time fee of $3000 plus a per project cost of almost $1600 plus $.04 per disk. And who defines "project?"
  • Then the Blu-ray disc Association charges another $3000 annually to use their very exclusive - on 4% of all video disks! - logo.

That's why you don't see quirky indie flicks on Blu-ray. Small producers can't afford it - even though they shoot in HDV and HD.

The Storage Bits take Don't expect Steve Jobs to budge from his "bag of hurt" understatement. Or Final Cut Studio support for Blu-ray. I suspect that Jobs is using his Hollywood clout from his board seat on Disney and his control of iTunes to try to talk sense to the BDA.

But the BDA won't budge. They, like so much of Hollywood, are stuck in the past.

A forward looking strategy would include:

  • Recognition that consumers don't need Blu-ray. It is a nice-to-have and must be priced accordingly.
  • Accept the money spent on Blu-ray is gone and will never earn back the investment. Then you can begin thinking clearly about how to maximize Blu-ray penetration.
  • The average consumer will probably pay $50 more for a Blu-ray player that is competitive with the average up-sampling DVD player. Most of the current Blu-ray players are junk: slow, feature-poor and way over-priced.
  • Disk price margins can't be higher than DVDs and probably should be less. The question the studios need to ask is: "do we want to be selling disks in 5 years?" No? Then keep it up. Turn distribution over to your very good friends at Comcast, Apple and Time Warner. You'll be like Procter & Gamble paying Safeway to stock your products.
  • Fire all the market research firms telling you how great it is going to be. They are playing you. Your #1 goal: market share. High volume is your only chance to earn your way out of this mess and keep some control of your distribution.

Time is short. Timid incrementalism will kill you.

Like Agent Smith delivering the bad news to a complacent cop: "No, Lieutenant, your men are already dead."

Comments welcome, of course.

Topics: IT Employment, Hardware, Mobility

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

902 comments
Log in or register to join the discussion
  • Agreed

    They really have priced themselves out of the "Average Joe" market. Why should I pay to get all of my DVDs on BDs again when they're usually at least 10$ more expensive?
    Resplendent
    • Absolutely! BD content pricing is insane!

      I want to buy more Blue discs, but I just can't justify it when a new release appears at Best Buy for $15 on DVD and $30 on Blue at the same time. Give me a break! Blue are not TWICE as good as DVDs, particularly on my player which outputs DVDs at 1080p. Until the price of the content drops significantly, Blue will never gain market share. I refuse to pay more than $5 more for it.
      BillDem
      • Why Robin Will Be Wrong Again

        No offense, Robin, but when CDs came out, they had a really long, rough start:

        1. CD Players were expensive
        2. CDs were pricey.
        3. Nobody could burn their own CDs.
        4. Production was extremely expensive (indie artists couldn't afford that).
        5. Most people didn't think the quality was better enough for the money.

        Now look at the current situation:

        1. Blu-Ray players are starting to become standard options on new laptops and PCs, and are becoming cheaper and cheaper.

        2. Blu-Ray movie supplies are already there (Blockbuster, NetFlix, Best Buy, etc...)

        3. Consumer Blu-Ray burning is already a reality, and overall production costs are dropping.

        For people like BillDem who don't want to pay $30 for a Blu-Ray, that's fine, just give it time. VHS was around for a long time while everyone switched over to DVD, and some people still use VHS today. I have TROUBLE selling my old VHS movies on CraigsList for more than $1 each.

        In a few years, Blu-Ray will be in almost every home that currently has a DVD player, and we will be arguing about the next latest and greatest media format.
        jhilgeman
        • Or not!

          [i]"In a few years, Blu-Ray will be in almost every home that currently has a DVD player, and we will be arguing about the next latest and greatest media format"[/i] - Not at the current price point. $300 for the player and $30 for a BD? I'll pass, thanks.
          EclipseDS
          • You Sure

            When I bought my first DVD player is was a floor model by Mitsubishi and was 400+ dollars, while a NIB was going for 600+. Back in the mid 90's that was a pile of money for something that had a very small following. (only 1 Blockbuster in Milwaukee even rented DVDs at that point). Yet here we are years later, and they give them away for $20 some weeks. Blu Ray will take the same course over time. The download market is not to the point yet that disc based films have to worry.
            BDigital
          • It's not the player prices it's the TV

            A blu-ray movie with out an HDTV is kind worthless. Sure I could have the player and it if it was cheap enough I could use it on my regular TV with regular DVDs but the Blu-Ray content is of no use to me. I could buy a HDTV but I can't justify the expense. That's the problem with Blu-Ray.
            voska1
          • HDTV in homes?

            I'm just an average Joe and I have had a HD plasma TV for 3 years and a DLP HDTV for over a year. I did have HDTV programing thru a dish but now use our local cable as they provide a large HD programing option. While I spent 3 months in Houston,TX. I used the DLP TV with a HD antenna and picked up several local channels transmitting HD digital which was very impressive. I still buy regular dvd disks as so far the pricing of the two brands of HDDVD has just been unreasonable, I could afford it, I just choose not to be raped by the industry! Everybody who can afford TV can afford a HD TV.
            chuckster1954
          • hello

            Hello my name is james i' m looking for a honest and responsible pearson that i can trust for a serious relationship,if you don't mind i am interested in knowing you better it takes just a day to know some one in life , here is my email if you are interested ( jamesblunt752@hotmail.com)
            jamesblunt752
          • hello

            Hello my name is james i' m looking for a honest and responsible pearson that i can trust for a serious relationship,if you don't mind i am interested in knowing you better it takes just a day to know some one in life , here is my email if you are interested ( jamesblunt752@hotmail.com)
            jamesblunt752
          • hello

            Hello my name is james i' m looking for a honest and responsible pearson that i can trust for a serious relationship,if you don't mind i am interested in knowing you better it takes just a day to know some one in life , here is my email if you are interested ( jamesblunt752@hotmail.com)
            jamesblunt752
          • now that's a rational response...

            I agree. Even 37" HDTVs are expensive. $599 is the cheapest I've seen. But, ignore the hype for flat panel displays and get in on the ground floor with a DLP or CRT rear projection HDTV. They can be found for much less and look just as good. They're just a little bigger. If you have the room, who cares.
            kfumike
          • hello

            Hello my name is james i' m looking for a honest and responsible pearson that i can trust for a serious relationship,if you don't mind i am interested in knowing you better it takes just a day to know some one in life , here is my email if you are interested ( jamesblunt752@hotmail.com)
            jamesblunt752
          • No use for HD when standard TV is fine

            Only two reasons to switch to HD, programming is no longer available for standard, or my standard TV dies.

            Change in viewing quality does not equal the change in price...yet.
            Dr_Zinj
          • hello

            Hello my name is james i' m looking for a honest and responsible pearson that i can trust for a serious relationship,if you don't mind i am interested in knowing you better it takes just a day to know some one in life , here is my email if you are interested ( jamesblunt752@hotmail.com)
            jamesblunt752
          • hello

            Hello my name is james i' m looking for a honest and responsible pearson that i can trust for a serious relationship,if you don't mind i am interested in knowing you better it takes just a day to know some one in life , here is my email if you are interested ( jamesblunt752@hotmail.com)
            jamesblunt752
          • Difference does not justify the price.

            I am an avid HDTV user and have experimented with all the technologies out there. Unlike the intro duction of the DVD and CD (both replacing extremely inferior media), the difference in the BD compared the the newer look forward players just does not warrant the price. I choose to pass but would reevaluate if the price becomes more comparible.
            thebeefman
          • CDs didn't replace inferior media

            CD quality didn't match vinyl quality for at least 10 years after introduction.
            Mytheroo
          • CD had superior sound from the start

            From the start in 1982, though pricey, CDs had very low background noise, wider dynamic range, longer play time than vinyl and cassette tapes, and better durability. Acceptance by audiophiles was rapid.
            Claims that vinyl quality surpasses digital sound were an unfortunate blip due to compressed digital downloads. Fools thought a compressed digital download was equal to CD sonic quality. Sure a CD can be badly mastered; most are well done.
            Another unfair comparison is the joy of social listening to vinyl in a properly configured room with good speakers, and the isolation and overfocus of listening to digital recordings with earbuds or on tiny desktop speakers. The message is more than the medium. One joy is that the market still knows that live music is a great experience.
            Music CDs are pretty dead in the market now because digital downloads are not compressed they are less expensive and more durable than CD.
            As a matter of nostaglia, I love my old LPs. Their artistic and informative packaging was superior. But for best listening, for good reasons, I play my CDs. And that was true from the first introduction of CDs, whether you claim Claudia Arrau's Chopin Waltzes, Billy Joel's 52nd street, or ABBA all about 1982, not ten years later. 1985 saw Dire Straits sell one million CDs of Brothers in Arms. Mine still plays.
            rayfieldvt
          • hello

            Hello my name is james i' m looking for a honest and responsible pearson that i can trust for a serious relationship,if you don't mind i am interested in knowing you better it takes just a day to know some one in life , here is my email if you are interested ( jamesblunt752@hotmail.com)
            jamesblunt752
          • hello

            Hello my name is james i' m looking for a honest and responsible pearson that i can trust for a serious relationship,if you don't mind i am interested in knowing you better it takes just a day to know some one in life , here is my email if you are interested ( jamesblunt752@hotmail.com)
            jamesblunt752