Paramount to unleash tons of HD DVD *exclusive* titles!

Discussion in 'PC Hardware, Software and Displays' started by Ruined, Aug 20, 2007.

  1. Zaphod

    Zaphod Remember
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    FWIW: The latest LTD totals through July from Home Media Research are 2.2 million in Blu-Ray and 1.5 million in HD DVD, roughly 1.46:1.

    But let's accept the Nielsen MediaScan numbers and say that the currant sales ratio is 2:1 in favor of BD. That would indicate that the consumer has spoken, right? Wrong. As anyone who has ever analyzed data will tell you: Ockham's razor doesn't really apply here since tallied totals tend to obscure the really interesting properties of complex data.

    So, here's an alternate, and admittedly entirely speculative (not being privy to the detailed numbers), interpretation:

    We can say for a fact that HD-DVD standalone sales outstrip Blu-Ray standalone sales. We can further, with reasonable certainty, ascertain that those who have studied the relative merits of the two formats and bought into one of them is neither the median nor the average HDM customer. We also know that early adopters tend to buy more media, more frequently purchase online, and hang around at tech forums. A fair speculation would thus be that the 'hard core' BD userbase (standalone + 'primary' PS3s) is roughly equal to the total HD-DVD sales. That leaves us with the rest, which is about 3.5 million 'secondary' PS3s to pick up a sales share equal to the other two groups. Add to that observations from places such as Blockbuster, and we have the following scenario:
    • Early adopter standalone owners consume the most media, but rarely rent and doesn't buy as much retail.
    • PS3 owners with a primary interest in media approach the buying habits of the standalone groups.
    • Casual PS3 gamers hardly consume any media at all, but when they do they tend to rent or buy retail.
    The extra margin on Blu-Ray disc sales is accounted for in (the disappointing) casual disc sales to gamers. Now, what does DVD numbers tell us about casual standalone consumers? This group isn't yet in the picture in the HDM 'war'.

    Of course, this scenario can't be proven on the basis of the data we have, but it should serve as an example of not jumping to absolute conclusions about what the difference makers are when it comes to what makes future financial sense. A 2:1 sales ratio at present probably isn't it. Especially considering the minute volumes we're currently talking about.
     
  2. RobertR1

    RobertR1 Pro
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    The way I see it:

    Paramount singed up with HD DVD intially for the same technical merits their CTO pointed out. Ofcourse at this point it was all in theory and the BDA strongly refuted such.

    Then the BDA gave some nice incentives to Paramount and likely told them their possible hurdles will be resolved quickly. Clearly obvious incentives being doing Sony doing a lot of the encodes for them, free discs and such. They signed on for a period of time.

    This period of time expired and Paramount saw these technical hurdles still existed. On top of that they were given incentives to go back to HD DVD exclusively so they took the deal and here we are today.
     
  3. Carl B

    Carl B Friends call me xbd
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    Ok compressed due to length. ;)

    Firstly, the Nielson numbers LTD are 61:49... not the same as the 2:1 weekly and YTD rate. But yes, stronger than those other figures. Anyway I don't have anything wrong with your theory - or rather reservations into the adoption of mine - but you'll of course understand that with a report of $150 million in incentives being in the mix, clearly Paramount didn't feel that the stated reasons alone were enough to abandon Blu-ray. And everything else being equal, I think that's honestly all that needs be understood about the topic.

    Now, if we want to debate the validity of that $150 million itself, that's another matter.
     
  4. Zaphod

    Zaphod Remember
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    Nah. Besides the fact that the only source for this is the NYT article (which again have spurred all kinds of armchair analyst interpretations), believing that there would be no financial incentives would be akin to believing in the tooth fairy. On the other hand, believing that they were paramount (pun intended) to the deal seems equally without root in established reality.

    I'd be a bit surprised to learn that a significant portion of these "financial incentives" were cash, though. Co-marketing agreements makes much more sense to me in that regard. The HD-DVD promotion group needs high profile media to make their player sales proposition attractive to the average consumer (see my previous thoughts as to DVD being the most important competitor and the propagation of enhanced interactivity as an additional feature to reach these consumers), while the studio would benefit in (the currently more important to their bottom line) SD media sales as well. Another reasonable possibility is purchase guarantees for pack in or OTC bundling, with the cost being shouldered by the promotion group. Again an incentive to spur player sales.

    Edit: Yet another possibility could be licensing breaks: If your business model relies on licensing revenue, it also relies on you attracting customers who are able to turn a profit by publishing on your format. In a competitive market, it doesn't seem entirely unreasonable for the licensor to initially waive some of thees fees to enable the licensee to get to a position where they can make money for both themselves and you.
     
    #164 Zaphod, Aug 23, 2007
    Last edited by a moderator: Aug 24, 2007
  5. Silent_Buddha

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    With the absolute miniscule amount of Blue-Ray (including PS3) and HD-DVD (including the X360 add-on) currently in the wild (sold to consumers) it won't be that difficult for momentum to swing wildly one way or another at this point.

    In other words the number of Blue-Ray and HD-DVD players sold to date are absolutely meaningless because it's just a tiny drop in the bucket in what will be needed to win the format war, not to mention replace DVD.

    If indeed Paramount are correct in expecting 200 USD HD-DVD stand alone players this holiday season, it's quite possible that sales of HD players will absolutely bury what's been sold to date.

    If Blue-Ray has no counter to this (IE - a stand alone player of their own for USD 200) it "could" go badly for them. And no marketing in the world will be able to save them.

    But even THAT scenario might not win the format war unless it makes some serious inroads on DVD stand alone sales and movie sales.

    Until one format or the other can truly be regarded as a serious competitor to DVD with significant volume (not the peanuts that are sold today) then neither format really has much of a lead on the other.

    Sony still still has the bigger stick in that they can withold Sony Pictures owned property from HD-DVD until they are Blue in the face. But that alone won't be enough to declare a winner.

    However, in HD-DVD's favor the studios would love to save on production costs. Especially (as said previously) if they have to ramp up to anything resembling DVD sales. As Zaphod has said before, all costs (and losses) accrued now with HD-DVD and Blue-Ray are small potatoes as the market is so small. But once it approaches DVD sales volume the money needed to invest in production lines (and thus media) is significantly more if you are doing Blue-Ray as opposed to HD-DVD. I wouldn't be surprised if the difference was in the hundreds of millions rather than just millions.

    Regards,
    SB

    PS - Just a thought. I'm wondering how the first year of HD sales compare to the first year of DVD sales and Laserdisc sales.
     
    #165 Silent_Buddha, Aug 24, 2007
    Last edited by a moderator: Aug 24, 2007
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