Futurists: Both Formats Will Grow

[Ruined]

Looks more and more like Dual Format Players will be the norm in the future.

Futurists: Both formats will grow

HOME MEDIA EXPO: Consumers still confused about Blu-ray, HD DVD

By Jennifer Netherby -- Video Business, 7/18/2007
JULY 18 | LAS VEGAS—Both HD DVD and Blu-ray Disc will have a place in home entertainment’s future and a big one at that, according to research presented at Wednesday panel “The Future of Retail and Home Entertainment†at the Home Media Expo here.

By 2012, high-definition DVD will reach $10 billion in annual sales, surpassing DVD sales, which are expected at $8 billion, according to Adams Media Research projections. Adams believes that high-def sales will be split equally between HD DVD and Blu-ray.

Firm principal Tom Adams said the industry is “slowly getting used to the idea that Toshiba’s not going away.â€

But high-def DVD won’t grow as fast as standard DVD did. Part of the problem is a lack of consumer high-def knowledge.

“Consumers are entirely confused,†said Russ Crupnick, NPD movies and music analyst. NPD research shows that 10% of consumers think they already have a high-def player, while research says that closer to 1% actually do.

One of the complaints of consumers is that they don’t understand why they should upgrade to high-def. “More than price, people don’t see a big difference,†he said.

Crupnick said there’s an opportunity for smaller retailers to educate consumers about high-def, but he cautioned them away from heavily investing in it, saying many consumers will buy players and high-def movies at big box stores.

The typical high-def consumer is male, ages 18 to 34, reads men’s magazines such as Maxim, probably owns an iPod, drinks imported beer and makes most of his movie purchases at electronics and game specialty stores, according to Nielsen Media Research.

Other new technologies such as movie downloading and video-on-demand are expected to grow in the next five years, but not as fast as high-definition. Adams projects that movie downloads could reach $160 million in revenue this year, but he said that is optimistic.

Crupnick said NPD has seen a significant drop in movie downloads in the last year.

DVD sales continue to be an important part of the business.

The most important thing retailers can do is focus on customer service. Crupnick suggested retailers look at what companies that score high on customer satisfaction are doing, such as Amazon and Netflix.

Music consumers, who behave similarly to movie consumers, shop an average of five stores for media, according NPD. Over the last three years, consumers have shifted where they are buying DVDs. Between January and May 2004, 54% bought discs at video stores, compared with 42% this year. Purchases at online stores doubled in the same period, from 11% to 21%.

Store loyalty, he said, is a thing of the past.

But consumers are buying more DVDs at video specialty stores, according to Nielsen. In 2006, 28% of video purchases were made at specialty stores, up from 23.4% the prior year. DVD purchases at Wal-Mart slid from 21% to 17%.

At an afternoon panel about DVD manufacturing on-demand, execs from MOD companies said the business is just getting started, but it may offer opportunities for retailers to carry a broader range of content.

Amazon CustomFlix VP of content acquisitions Larry Smith said at his company, some smaller titles sell one or two copies, while others can sell even more.

Workout video You On a Diet: The Workout sold enough to make it the No. 7 top DVD seller on Amazon at one point.

 

[Silent_Buddha]

Depends on the price. Noone I know of is going to be getting a Blue-Ray, HD-DVD or dual format player until it's competing with DVD players on price. It's just not a compelling upgrade like the move from VHS to DVD was.

However, whichever format comes out with a reasonably priced recorder for use in PC's will probably find a place in my computer as a storage device.

Regards,
SB

 

[Maintank]

Depends on the price. Noone I know of is going to be getting a Blue-Ray, HD-DVD or dual format player until it's competing with DVD players on price. It's just not a compelling upgrade like the move from VHS to DVD was.

However, whichever format comes out with a reasonably priced recorder for use in PC's will probably find a place in my computer as a storage device.

Regards,
SB

Agreed, I will add in the long run, I doubt players that can do both formats will win out vs a cheap stand alone. The costs are higher and stores dont want to have to buy two sets of inventory for the same movie.

 

[pcchen]

Technically, a combo player won't be much more expensive than a "normal" one. Although the main problem will be the royalties.

However, if combo players become the majority, stores won't need to store two sets of the same movie: they only need one, it's just that some movies are in Blu-ray and others are in HD DVD.

 

[pakotlar]

Technically, a combo player won't be much more expensive than a "normal" one. Although the main problem will be the royalties.

However, if combo players become the majority, stores won't need to store two sets of the same movie: they only need one, it's just that some movies are in Blu-ray and others are in HD DVD.

And quite a few are on both no?

 

[pcchen]

And quite a few are on both no?

Do you see combo players all over the market?

 

[ban25]

Why would people shell out for a combo player? To play Universal movies?

 

[AlphaWolf]

Why would people shell out for a combo player? To play Universal movies?

No, to play Sony movies.

If there's going to be a prolonged format war it will give you options when you are buying movies, you don't have to worry if the box on sale is blue or brown and it saves you the space of having a BD and an HD-DVD player.

 

[ban25]

No, to play Sony movies.

How about Fox, Disney, and Lionsgate movies?

 

[Random Digital]

With the recent announcements of retailers dumping HD-DVD, I think we will just have one format soon.

Which is what HD needs to move forward and compete against regular ole DVD.

 

[Geo]

Well, I cracked and bought a Sony BDP-S300. Very nice, tho a bit slow to start. Does upconversion of SD DVD to 720p significantly better than the TV does. And 720p on our 2.5 year old Mits 62" DLP is noticeably higher detail. Not jaw-droppingly so, but enough to get a "nice!" out of my wife, the TV engineer.

Did the 5 free movies thingy, even tho it was work to get more than one that looked interesting to me. Interesting in the sense that I might have bought it anyway if it weren't being given away for free. Haven't received them yet. The one B-r movie we have so far is the extended edition of The Patriot.

The dual formats are too expensive for right now. I'd rather enjoy the B-r now, and if HD DVD seems to keep hanging on then at the current curve it seems like we could buy a second player for just that pretty reasonably early next year.

 

[Silent_Buddha]

Aye, I don't think I've seen anyone announce a dual format player for under 1000 USD yet. At that price you could get a Blue-ray player, HD-DVD player, and a small library of movies.

Or you could do like the majority of consumers. Stick with DVD until one formats price drops significantly.

Regards,
SB

 

[jb]

Aye, I don't think I've seen anyone announce a dual format player for under 1000 USD yet. At that price you could get a Blue-ray player, HD-DVD player, and a small library of movies.

Or you could do like the majority of consumers. Stick with DVD until one formats price drops significantly.

Regards,
SB

Yea but all these movies I then have to buy in normal DVD format when I know they would look so much better on my 1080p tv are killing me. I want them in HD but can not afford to buy both. If I did not have to redo the roof, get a new AC and redo our back yard this summer..... Dam you house

 

[Silent_Buddha]

Which reminds me, that'll be one sure sign that one format or the other is starting to win the war.

When DVD sales start to rapidly decline due to average consumers holding off buying DVDs in preparation of buying a next generation HD player.

Until that happens, it's far far too early to even think of one or the other as anything resembling being "ahead" much less a "winner."

Regards,
SB

 

[Geo]

By the by, my five free B-r movies showed up on Saturday. My gosh, "The Last Waltz". . . all those guys looked so young! Thirty years will do that, I suppose.