Will Warner support Blu-ray?

[barnak]

You guys read this about Blueray production could be as cheap as current DVDs?

"Matsus.h.i.t.a Electric Industrial Co., Ltd (owners of the Panasonic brand) have established a new technology which will lower the production costs of next generation Blu-Ray discs (BD) to almost the same level as current DVD production costs.

The new technique improves the use of resin which is applied to form a protective coating on the disc surface, a step in the manufacturing process responsible for Blu-Ray discs’ high production costs. Matsus.h.i.t.a will use trial manufacturing lines in their American labs to accumulate manufacturing knowledge, with the prospect that in only one year from now, Blu-Ray disk mass production will be possible at almost the same costs as current DVD mass production.
blu ray disk

The Blu-Ray format is being supported by Sony who plan to ship their next-generation Playstation 3 console with a Blu-Ray disc drive. Image © impress.co.jp

Matsus.h.i.t.a and Sony’s efforts with Blu-Ray are in direct competition with the HD-DVD format backed by the Toshiba camp. In comparison with Toshiba’s HD-DVD, Blu-Ray production cost was considered higher, but with Matsus.h.i.ta’s new technology this cost difference may have been eliminated. The competing camps have not yet reached an agreement that could solve the impending multiformat war, but even if both standards coexist in the future, Matsus.h.i.t.a believes the Blu-Ray disc may be ahead of the competition.

For optical discs like Blu-Ray, applying the transparent protective coating uniformly on the data layer is the most important aspect of the manufacturing process. When the liquid resin is applied, centrifugal forces cause the layer to become thicker on the outside and thinner on the inside. In the case of Blu-Ray discs, which have a thinner coating than other optical discs, the information could not be read accurately if this method were used. For this reason, until recently, a pre-manufactured resin sheet had to be mounted onto the Blu-Ray disc, resulting in production costs 2 to 3 times higher than those of regular DVDs."

link - http://ps3updates.qj.net/

 

[scooby_dooby]

Obviously, now with Bluray having pretty much 100% of the movie industry behind them compared to little more than 50% for HDDVD, i think that "cost" won't matter much, especially because the differences will be negligible, if they're there.
PS3 will sell at a very competitive price, cheaper than any HDDVD player, and the difference in price between HDDVD and Bluray media will be marginal, if there will be a difference.

I only thank god that there seems to be one "winner" afterall. Don't care which one. 2 formats would have driven me crazy!

How do you know the price difference will be negligible? How do you know HD-DVD players wil be mroe expensive than a PS3?

Thos are two HUGE assumptions, and given those BR would be the hands down winner, but those just assumptions not fact.

We'll have to see how it plays out. If HD-DVD can be first to the market, with a large movie library(50% is fine for now), and provide the players at affordable prices, they'll start moving. Once they start moving, and movies start selling, 50% will grow...

If BR is slow out of the gate, and the players are overpriced then it's not as clear cut as you guys seem to be thinking.

 

[Titanio]

Thanks Barnak. If they get this in widespread use quickly it'd be very beneficial.

 

[Mordecaii]

Well as you say scooby, those statements made that HD-DVD players will be more expensive is speculation but speculation is all we have to go on right now. When you look at what has happened in the past, new optical drives tend to release at $500 or higher. We don't know how much the PS3 will release for but most people assume somewhere around $400. That's why people are saying that the PS3 will be cheaper. If there is a format war, it won't be won within the next year or two, but it will be won when the players are cheaper and people are buying the next-gen discs en masse. By that time it won't matter if one launched a couple months ahead or which one started out with cheaper manufacturing, because chances are they will cost basically the same by then (especially considering the reports that within a year BD discs will cost the same as DVD's to make). So at this point, industry support will be the biggest factor as to which one wins. If BD has the industry's support (which judging by the latest news reports it's looking like they will have close to if not 100% support) and HD-DVD does not (which they won't since Sony absolutely will not support them and Sony owns a couple movie studios), then BD will have won because people will see they can get more movies on BD.

Of course this is all just a big game of what-if, with the arguments presented 100 times before and people already having decided which side they're going to take in the discussion.

 

[scooby_dooby]

Ya, the problem I see with comparing this to previous technolges, like DVD, is that HD-DVD has to fight a price war. DVD never had to.

DVD had the luxury of being the established format, but HD-DVD will have to fight for that spot, if they can't produce affordable players then they're DOA. The only advantage HDDVD has is the first mover advantage, and the lower pricepoint, so I expect them to use it.

 

[avaya]

The thing is, when PS3 launches it has the potential to sell more units in its launch day/weekend (IIRC 981,000 in Japan 2000 launch) than HD-DVD is likely to sell players in its entire time in the market up to that point.

Sales from there will only accelerate for PS3 – unless things are very wrong. The movie studios will take notice of this. The number of potential, key word being potential, Blu-Ray media purchasers out there will be an order of magnitude grater than HD-DVD; this is what Paramount means by the “key advantageâ€￾ Blu-Ray has in PS3.

Blu-ray standalone players are apparently set for market soon after PS3, doubling up momentum.

Coupled with greater studio support for Blu-Ray, HD-DVD chances now range from slim to remote hence the softening in the position of it's key supporters.

 

[scooby_dooby]

All that matters is the amount of MOVIES people buy in the next year or two, not the installed base for "future" HDTV owners.

At best we can guess 20% of PS3 owners start buying HD-media(more than the current HDTV installed base), that's only ~200,000 buyers in 2006. There's an estimated 15-20million HDTV sets in the US, and HD-DVD will have a solid 8 or 9 month lead in sales of both players and media...

It all depends how quickly BR can get their standalone's out, and how cheap they can make them, and how that compares to the HD-DVD players on the market a well. If BR has a slow rollout that takes it into 2007...HD-DVD will potentially have quite the installed base.

I don't really care, but it would be shame if HD-DVD folds now before battling BR in a nice little price-war.

 

[avaya]

With no content exclusivity for HD-DVD why would anyone buy HD-DVD movies?

 

[scooby_dooby]

Because they can still offer a huge line-up of movies, there will be no competitor on the market, and there are 20million HDTV owners that want to start USING their thousand dollar TV's.

Obviously HD-DVD players WILL sell, it's just a matter of how well.

 

[avaya]

How many of those 20million have HDMI?

You’re still relying on early adopters. If the word gets out that Blu-Ray is coming with total movie studio support then this is going to really hurt HD-DVD sales even amongst this group of consumers.

If I can dig up the link somewhere, the sales projections for HD-DVD players was IIRC shy of a million units (unknown if worldwide or R1) before the PS3's Q1/Q2 launch.

That is no where near enough to compete.

The demand for HD-DVD players will not be anywhere near PS3's level so their price is very likely to be exorbitant. It's a double hit. The demand is not high enough and the price is likely to be higher than PS3 - yes that's an assumption, but based on some valid reasons like the lack of economies of scale, Toshiba making money on hardware and the associated opportunity costs of not pricing with a high enough mark-up to make the investment worthwhile.

 

[Titanio]

At best we can guess 20% of PS3 owners start buying HD-media(more than the current HDTV installed base), that's only ~200,000 buyers in 2006.

You're pulling figures out of nowhere.

Have you, perchance, seen UMD sales recently?

Or do you remember the reported rise in DVD sales after PS2's launch, because so many were actually buying DVD movies more than even games? (!)

Nothing is assured, but PS3 will play a large role in early/short-term Bluray strategy. The likes of Panasonic see this - and this is their business, afterall.

 

[scooby_dooby]

How many of those 20million have HDMI?

You’re still relying on early adopters. If the word gets out that Blu-Ray is coming with total movie studio support then this is going to really hurt HD-DVD sales even amongst this group of consumers.

Possible.

If I can dig up the link somewhere, the sales projections for HD-DVD players was IIRC shy of a million units (unknown if worldwide or R1) before the PS3's Q1/Q2 launch.

1 million standalone's is damn good, PS3 is only expected to sell 1million PS3 for the entire 2006 year, if 20% of those users buy BR movies, HD-DVD will still have a 5-1 installed base for 2006. Standalone BR drives will even up that score though, UNLESS they are slow to market.

The demand for HD-DVD players will not be anywhere near PS3's level so their price is very likely to be exorbitant. It's a double hit. The demand is not high enough and the price is likely to be higher than PS3 - yes that's an assumption, but based on some valid reasons like the lack of economies of scale, Toshiba making money on hardware and the associated opportunity costs of not pricing with a high enough mark-up to make the investment worthwhile.

That works if you completely ignore the fact PS3 has much more expensive hardware inside of it than any HD-DVD player wil ever have, not only does it have the BD drive, it has a CELL processor, a $500 retail GPU, 512MB of ram, etc etc etc. So the 2 cannot be compared, PS3 costs at least 3 or 4 times as much to manufacture than a standalone HD-DVD/BR player would cost.

Without knowing the costs of HD-DVD drives you can't really speculate on the mark-up, but there is absolutely no reason why HD-DVD players cannot be priced below the PS3, and in fact they will have to in order to survive.

If they don't, no sweat off my back, I'll just buy the PS3 or wait into 2007 for standalone's BR players to become affordable.

 

[London Geezer]

scooby, with all due respect, you can try and twist it any way you want, in the end, Warner announces support and the war is over. No cost, manufacturability, hardware, ps3, blah blah blah devil's advocate playground.

A format with 100% of the movie industry behind it wins over the one with 50%.

And that's even before the articles explaining how BR will NOT be more expensive than HDDVD, and if it is, it will be marginal. Even before the PS3 matter. Before pulling percentages of "people who will buy Bluray movies out of the PS3 owners".

And where did you get the $500 GPU figure from?!

Don't be silly and talk crazy now and then PM me excusing yourself for "being in a bad mood".

 

[avaya]

Possible.



1 million standalone's is damn good, PS3 is only expected to sell 1million PS3 for the entire 2006 year, if 20% of those users buy BR movies, HD-DVD will still have a 5-1 installed base for 2006. Standalone BR drives will even up that score though, UNLESS they are slow to market.



That works if you completely ignore the fact PS3 has much more expensive hardware inside of it than any HD-DVD player wil ever have, not only does it have the BD drive, it has a CELL processor, a $500 retail GPU, 512MB of ram, etc etc etc. So the 2 cannot be compared, PS3 costs at least 3 or 4 times as much to manufacture than a standalone HD-DVD/BR player would cost.

Without knowing the costs of HD-DVD drives you can't really speculate on the mark-up, but there is absolutely no reason why HD-DVD players cannot be priced below the PS3, and in fact they will have to in order to survive.

If they don't, no sweat off my back, I'll just buy the PS3 or wait into 2007 for standalone's BR players to become affordable.

The Piper Jaffrey PS3 sales figures are undefined. It’s assuming a late fall 2006 launch and claiming that with a similar timed launch to X360 the PS3 will sell less. That seems out of kilter with what the market looks like today. If we include world wide sales we are suddenly looking at a couple of million PS3 sales for 2006 if they don’t have any supply side issues.

Of those initial PS3 purchasers, almost all of them are likely to be the early adopter/hardcore gamer. I would guess that if we cross referenced those consumers with current HDTV owners the PS3 movie purchaser numbers would look rather favourable. That’s a guess though.

Now after a year on the market for PS3, we are likely to see some impressive volumes. Coupled with Blu-Ray standalone players, which we have no reason to doubt will be delayed; things don’t look good for HD-DVD.

It’s clear that’s what Paramount has done.

HD-DVD player costs.

There is one thing you are ignoring, long run average costs. This pertains to economies of scale. PS3 production is likely to have its short run costs fall faster than HD-DVD players because of the expected demand for PS3. This is what is likely to make PS3 cheaper than a HD-DVD player. The components for a HD-DVD player are not trivial either; some fairly complicated IC’s will be incorporated into these players.

Further to this, PS3 will be sold below marginal cost, that’s the business model. It’s subsidised by Sony. First year will make a loss, second year return to profit as software begins to bring up revenues.

HD-DVD players are highly unlikely to be sold below marginal cost; Toshiba doesn’t make the money back from software. With players being sold above MC and the lack of economies to compare with PS3 there are some very good reasons to believe that HD-DVD players will be more expensive than PS3 initially.

For what it’s worth it’s not the current HD consumer who actually matters in this fight (in the long run). It’s the future HD consumer - those with SD now who will convert; they make up the vast majority of the market. PS3 as a vehicle will get so many potential players into homes that it will be a really challenging task for HD-DVD to compete.

 

[mckmas8808]

That works if you completely ignore the fact PS3 has much more expensive hardware inside of it than any HD-DVD player wil ever have, not only does it have the BD drive, it has a CELL processor, a $500 retail GPU, 512MB of ram, etc etc etc. So the 2 cannot be compared, PS3 costs at least 3 or 4 times as much to manufacture than a standalone HD-DVD/BR player would cost.

I hate to do this to you Scooby (I'm lying I loving every minute of it) but I gotta bring you back down to earth. We KNOW FOR A FACT that the PS3 will be cheaper than the first HD-DVD players because Toshiba has already said so.

Toshiba and NEC won't comment on the likely price of their first products. But Hisashi Yamada, a Toshiba chief fellow of technology and chair of the DVD Forum, said at a Los Angeles event earlier this year that he expects the first players to cost around $910.

Now do you expect the PS3 to be anywhere near $910? Give it up man and just realize the facts. It will hurt a lot less if you just accept it. Oh and notice that NEC has decided to make Blu-ray players too. This was not always the case. It looks like they are seeing the light too.

Link http://www.pcworld.com/news/article/0,aid,117123,00.asp

 

[Rur0ni]

Any analyst that can suggest the PS3 will only sell 1 Million consoles in 2006, Even it it debuted in November, doesnt know what he's talking about.

 

[scooby_dooby]

I hate to do this to you Scooby (I'm lying I loving every minute of it) but I gotta bring you back down to earth. We KNOW FOR A FACT that the PS3 will be cheaper than the first HD-DVD players because Toshiba has already said so.

Now do you expect the PS3 to be anywhere near $910? Give it up man and just realize the facts. It will hurt a lot less if you just accept it. Oh and notice that NEC has decided to make Blu-ray players too. This was not always the case. It looks like they are seeing the light too.

Link http://www.pcworld.com/news/article/0,aid,117123,00.asp

No you don't know ANYTHING for a fact. So enjoy it all you want, you make no sense.

One company has stated an "estimated" street price, for February, that tells you nothing about the street price in fall of 2006, nor does it tell you the prices that might be available from competitors.

Do you understand? Feb? November? Estimates? There's no way to know what the costs of HD-DVD players will be next X-mas, the fact you take that press release as FACT speaks volumes about your ability to be objective(it's non-existant).

You make a conscious desision to read a press release stating an estimated $900 price tage, in february and toss out ALL common sense, ignore the fact this is an ESTIMATE, ignore the fact there will be multiple manufacturers, ignore the fact that HD-DVD is fighting a price war, ignore the fact prices will decrease over 10 months, and make the assertion that all HD-DVD players 10 months later will cost $900. That's some great reasoning there MckMass, thx for showing my the light.

You're not bringing me back down to earth, because I haven't made any claims at all , maybe re-read my posts and try and better understand what I'm trying to say. I'm saying we don't KNOW that PS3 will be cheaper than HD-DVD players, and we don't KNOW whether BR players will be in the same price range as HD-DVD players next fall.

Stick to the facts. You're so eager to pronounce BR teh winner, and do your happy little "l love sony" dance, that you can't even accept that there are still multiple possible outcomes here, and nothing has been decided yet.

 

[mckmas8808]

Ok you're right HD-DVD player's price probably will fall 50% in a mere few months. Yep Toshiba doesn't have to try to make their money back with actually following traditional tech pricing. They can launch at $900 and a few months later drop the price 50% just to compete with the PS3. I bet you think this will happen too.

Do you expect them to actually make any money doing this? What product do you know comes out fresh and drops 50% in a few months in the tech area? None. But yep you do know more than what 50 years worth of technology history has given us.

Great job chief.

 

[scooby_dooby]

I don't know what will happen, but I'm not foolish enough to claim things are factual when they are merely speculation.

Toshiba wants it's technology to succeed, that will require aggressive pricing. Does it make sens for Toshiba if payers are $900 and they don't sell any? Think about it.

Anyways, signing off on this thread, let the happy dances resume

 

[randycat99]

Ok, so with the "Scooby model", we have HD-DVD players dropping in price by $500 in less than a year. The flipside to this is that if it is known that you could save yourself $500 by simply waiting a year and buying, who's going to bother buying it at the debut price??? Fanatic early-adopters? Sure! Casual adopters? No way. Not only would the casual adopter crowd be naturally repelled by the $900 price tag, but even the ones who are aware of an eminent crash'n'burn price scenario would rather wait and save $500. So HD-DVD will debut with a stunning 1% of its potential marketbase captured, with presumably people flocking in droves at the 11th hour of the year (assuming HD-DVD is not already considered a tremendous flop after its 1% captured debut). This falls together nicely with the "first-to-market advantage" amounting to exactly nill. What's the point?

The point is there is no sane CEO in da HD-DVD biz that would even ponder the "Scooby model" w/o dropping to the floor in uncontrolled hysterical laughter. It's not fact, per se, but I think it's purrrdy safe to have a considerably amount of confidence with the scenario.