BPN 1209 When will Blu-ray be over

It is interesting to hear how the consumer electronics manufacturers are looking for the next golden egg in the compact disc technology. At the consumer electronics fair IFA in Berlin the manufacturers are sending out messages. Sony and Philips tell the consumer that Blu-ray will be a mass product in two years time, while Panasonic says that DVD will be terminated soon. And the loser of the race for the successor to DVD, Toshiba, is still selling a High Definition booster to the DVD. In short, the DVD generation is nearing the end of its commercial DVD lifecycle.

It is almost 15 years ago that Philips boss Jaap Timmer, supported by IBM, banged the heads of the rivals and told them to set a common standard. Toshiba gave in and the DVD could get a fast start. After 10 years there was a new round for specifications of the next generation of DVDs, which was going to include more volume, but especially High Definition. This time Toshiba, NEC, Matsusishu and Microsoft did not give in and started to develop their own next generation DVD format. But they had to give up as sales were not impressive and the movie world held back. In the end Sony won the race with Blu-ray.

So now Philips has become a Blu-ray missionary, as many of its patents have been brought into the technical specification and says that Blue-ray will be a mass product within two years. It gambles that the film fans will start playing their DVD collection on the Blu-ray player and eventually will buy the Blu-ray version of the movie. After that wave the masses will follow. Sony on the other hand serves already the market of game consoles with Blu-ray and of course will also sell Blu-ray players to the movie loving audience. In fact Sony will have the Blu-ray version of the new James Bond movie Quantum of Solace.

Will the Blu-ray really be a mass product in two years? The introduction of CD-ROM from the lab to the commercial market took three years and it was a success almost five years later. The introduction of the DVD from the lab to the commercial market took also three years and it was a success almost four years later. The Blu-Ray came on the market in 2005 and did not make much impact so far. Now after three years it looks like it will pick up. The movie industry does not have to make a choice any longer and neither has the consumer. So the consumer gets more volume, a better picture and an online link BD Live.

But the customer follows the industry. Presently there are roughly 200 movies on Blu-ray. This will not be enough to convince people to buy a Blu-ray player. A portfolio of at least 750 movies is needed to get the traffic in the consumer electronics shops going. Whether that portfolio will be reached in two years time is debateable.

There are two factors influencing the acceptance of Blu-ray: the portfolio and the introduction of disruptive technology. Big movie firms release between the 450 and 600 new movies every year. So in numbers the portfolio can be put together; however not every movie will automatically be released on Blu-ray. My guess is that by 2012 the Blu-ray will sell as DVD is selling presently. And in the background of course lure the disruptive technology of broadband. How fast will Hollywood release movies in HD quality over broadband? I do not think that Blu-ray will be the last offline movie medium to be replaced by online. But once the speeds are up, the online distribution of movies might become more interesting. I guess that the games world is already predicting that trend.

Blog Posting Number: 1209

Tags: DVD, Blu-ray, broadband

DVD Forum anniversary party rudely disturbed

This month the DVD Forum celebrates its 10th anniversary. And the members of this international organization that defines formats for DVD products and technologies, took care of the fire crackers: Paramount will exclusively use the HD-DVD format for releasing its movies for one year.

The Forum is a collaboration between the consumer electronics, IT and entertainment industries and was founded in August 1997. It assumed and extended the work of the DVD Consortium, the ten-company organization that initially developed the DVD format. When it started its work in developing the DVD format and promoting its widespread dissemination, the DVD Forum counted 86 members. Today, it has about 220 member companies, drawn from all over the world.

The launch of DVD was one of the most successful consumer product launches in history. An immediate hit with consumers around the world, DVD brought new and exciting capabilities to home entertainment, computing and gaming, and created an immense global market: 2006 demand for DVD players and recorders stood at over 110 million units, and reached about 290 million units for DVD drives. In the same year, 1.7 billion DVD movie discs were shipped in the North America, while shipments of recordable discs climbed to 5.1 billion discs globally.

In an anniversary message, it reads: This extraordinary success rests on the concerted efforts and long-term support of the DVD Forum. The Forum assured the versatility and wide-ranging applicability of DVD by defining key specifications that met diverse needs, including those for DVD-ROM, DVD-Video, DVD-R, DVD-RAM, DVD-Audio, DVD-RW, and DVD-Video Recording(5). The Forum continues to define the future for DVD, and is now promoting development of HD DVD, the next generation DVD format -- based on blue laser -- and working on the development of an integrated networking environment -- extending DVD formats to adapt to the expanding online world.

But the anniversary party has been rudely disturbed by the fire crackers of Paramount movie studios and its subsidiary Dreamworks. Paramount has chosen to release movies in the HD-DVD format only for one year. The company hopes to force a format dominance on the market. Paramount follows the lead of Universal Pictures which had exclusively chosen for HD-DVD as its only release format. According to The Wall Street Journal, Paramount will get money and promotion assistance for one year in lieu for the format exclusivity. (from what company will it get money? Microsoft?).

This fight has always been immanent since the two DVD format parties of HD-DVD and Blu-Ray could not agree. They nicely went ahead, but both knew that the fight was going to be on the commercial battlefield: the consumer will decide. Dreamworks indicated that it chose for the HD-DVD format not for the financial support the studios get for it, but because the HD-DVD player costs less than 300 dollar. The cheapest Blu-Ray player costs 449 dollars.

Is that argument valid? I do not think so. Mr Katzenberg of Dreamworks should know his classics and remember that the video tape fight in 1980 was won by the company which had the most content, regardless the genre. Can Universal and Paramount offer the consumer so much content in only HD-DVD format, that Blu-Ray will wither? Forget it. For the DVD is not only a movie format, but also a game format. Sony uses Blu-Ray for its Playstation and Microsoft’s Xbox plays HD-DVD.

The battle field is larger than the movie industry and Universal Pictures and Paramount will not o dictate the format. The HD-DVD camp with Masushita, Microsoft, Universal and Paramount will battle the Blu-Ray camp of Philips/Sony, Walt Disney and News Corp. Which company will have the largest offer of entertainment products; that is the question.

Paramount will review its stance after a year. By then the company will find itself in isolation and will have lost a lot of money by not selling its movies to the Blu-Ray community or it will have gained a dominance in the movie world, but not in the gaming world, which has other buying rules. In both cases the consumer will loose.

Blog Posting Number: 846

Tags: DVD format