Jul 23 Podcast #435: Can Blu-ray pull it off?
Blu-ray would like to supplant DVD and take over as the dominant video format in households all around the world. We see the advantage from a pure quality perspective, but believe that costs have to line up for it to actually happen. With so many forces pulling against it, can Blu-ray really become the successor to DVD?
Listen to the show
Today's Show:
News:
- Netflix To Launch Canadian Service for Streaming Movies and TV Episodes Later This Year
- Redbox Plots Internet Movie Strategy in Challenge to Netflix on Home Turf
- Blu-ray, Digital Up As Video Sales Dip
- Blu-ray player shipments to surpass 62.5 million next year
- Netflix CEO: Hulu Plus Still 'Too Small to Matter'
Other:
- Jump into Standup Paddleboarding with both feet at The Standup Connection
Can Blu-ray pull it off?
Blu-ray would like to supplant DVD and take over as the dominant video format in households all around the world. We see the advantage from a pure quality perspective, but believe that costs have to line up for it to actually happen. With so many forces pulling against it, can Blu-ray really become the successor to DVD?
Player prices
Here in the US, the magic number, in our minds at least, has always been $100. Once players could get down into the sub-$100 price range, the difference between a DVD player and a Blu-ray player would be small enough for most people to just bite the bullet and pay it. We seem to be there now. What do you really get for that price?
Braden recently purchased a Samsung BD-P1590 for $89. Sure it was refurbished, so it’s a bit of a roll of the dice, but it works flawlessly. For that price, you get a Blu-ray player that supports 1080p, BD-Live, DTS HD and Dolby True HD, and has built-in Ethernet for Netflix, Blockbuster Pandora and YouTube Streaming.
So not only do you get a great upscaling DVD player with HDMI capabilities, you also get a bunch of options for streaming music, movies and TV shows. and to top it all of, it will play Blu-ray discs as well. The player needed updated firmware, which seems to be a Blu-ray curse, so setup took quite a while. But once it was setup, it works great.
Disc prices
Many also believe that the disc prices need to be on par with DVD prices before Blu-ray will really take off. We aren’t so sure that’s true. Every Blu-ray player will also play DVDs, so if you want to save money, you can just buy the DVD. A buyer could choose to reserve Blu-ray disc purchases for those movies that really benefit from the enhance audio-visual experience.
That said, how much is the premium for Blu-ray right now? Looking back at a few of the more popular new releases from the last few weeks at Amazon: Cop Out with Bruce Willis and Tracy Morgan costs $16.99 on DVD and $19.99 on Blu-ray. But the Blu-ray includes the DVD and a digital copy. The Losers with Zoe Saldana and The Bounty Hunter with Gerard Butler and Jennifer Aniston are both priced exactly the same. The Losers includes the DVD and digital copy with The Bounty Hunter does not.
There are many other cases just like this. The percentage increase sounds high, an 18% premium for Blu-ray. But in truth, it’s only $3 - less than most people spend at Starbucks. Not only is it only $3, but you also get the DVD and a digital copy for easily throwing on your iPod or cell phone. For $3, especially considering you get the DVD in the package, it seems like a pretty simple choice to go ahead and pull the trigger for the Blu-ray.
Other factors
There are still a few hardware devices that are conspicuously absent. We haven’t seen Blu-ray take off in the automobile or the portable device markets. Sure the screens are too small to get any real benefit from Blu-ray, but if you expect people to buy Blu-ray disc instead of DVDs, they need to be able to play them anywhere they play DVDs now.
We don’t have any real theories on why those devices haven’t quite ever materialized. But we’d like to theorize that movies studios have come up with the triple play package to cover for this lack of options with Blu-ray discs. You don’t have to worry about the Blu-ray only playing at home of the package includes a DVD for your car and a digital copy for your iPad or Zune.
Streaming
Perhaps the biggest threat to Blu-ray isn’t DVD, but streaming video. Streaming may be the thing that takes over for DVD, eliminating the physical media altogether. Many believe this is the reason Netflix is being so aggressive in establishing itself as the preeminent destination for video streaming. In a few years they won’t need to mail discs to your home, Blu-ray or otherwise.
We’ve long held that the convenience factor for streamed content is by far its biggest upside. That convenience typically comes at the cost of quality and overall experience. Many believe that streaming will never take over for DVD, and especially not Blu-ray, because of the sacrifice in quality. Many early detractors thought the same thing about MP3, but iTunes sales continue to soar while CD sales have plummeted.
And to be perfectly honest, most movies are great rentals. By the time we’re older than 8 or 9, we don’t sit around and watch the same movie over and over again. We watch it once and mail it back. Streaming is perfect for that. In many cases, streamed quality is good enough. For the movies we mentioned before, you really don’t get too much benefit from the Blu-ray format, so DVD, quality will more than suffice.
Conclusion
Blu-ray seems to have hit that sweet spot we’ve been waiting for, but we’re yet to see it really take over for DVD. It shows signs of life, but not the dramatic adoption some were hoping for. Unfortunately for Blu-ray, the stars may have just aligned against it. The war with HD-DVD in its early days didn’t help anything, but ultimately people are content with DVD and probably won’t migrate away from it in droves until there’s a compelling reason to do so. Will streaming be that reason? We aren’t sure, but Blu-ray should probably keep an eye on it.
Reader Comments (15)
The biggest problem with that logic is that not everyone has the Internet, and thus, limiting the audience.
You should do a Blue Ray player roundup (I think it has been a long time since you've done one) - maybe with high end, middle, and bargain categories. Perhaps for the holidays.
Brian
I wonder if internet bandwidth limits may eventually influence this argument as Telcos and Cable Providers continue pushing to be the one stop shop source for content and bandwith.
Not everyone buys off of Amazon to get those cheaper Blu Ray prices. A large portion of buyers come from stores like Wal Mart. (I do buy from Amazon) Most New Release Blu Ray cost $24.99 at my store and I refuse to pay that much for any movie. The Best Buy in my area charges $23-$25 for newer releases also. That article is a little flawed as far as reality goes for most people. $8 price difference for Blu is more realistic. I think that price is what is really holding it back from taking off. Not to mention the wonderful sate of our economy. I honestly love Blu and hope it is here to stay for awhile.
As far as the digital copy... who cares? I have no use for it. If i want to play it a portable device I will just rip the disc or download it. Extra DVD copy... again who cares? Why do I want the DVD if I have it on Blu? I can understand with family films so you can let the kids destroy the dvd copy and keep the Blu for the main collection. Dont give me all that extra useless junk and pass on the savings.
Streaming is a joke also. There is also many areas that do not get high speed internet yet so sales will be lost there. Not to mention Bandwidth issues. If physical media goes away imaging how much that would suck up during the evenings when everyone is in front of the tube. Streaming is nice but it irritates me to no end when it freezes and stutters. There needs to be a lot of infrastructure upgrading in order for that one to reach full full potential and I do not see that happening anytime soon. And besides Streaming Netflix looks nowhere near as good as a full blown Blu Ray in 1080P pumping out lossless audio. I will stick with physical media until they pry it out of my hands!
I'll stick with DVD along with my Toshiba HD-XA2 (Reon chip) that upconverts to near blu-ray quality on reg DVDs. Don't feel blu-ray is worth the big $$$.
If Sony had their way, BD would become the de facto physical media distribution format. Unfortunately for them, Toshiba is not interested in ending the billion dollar a year stream of royalties revenue DVD provides.
As far as the average consumer who knows very little about HD, BD, and all the tech we love to nitpick is concerned, DVD plays just fine on their tv. So does basic cable and non-HD programming although for some reason the shows looked stretched so that people are shorter and fatter. As far as they know, having an HD tv means you are watching HD.
Here lies the true roadblock:
1. DVD continues to be very profitable and successful and the preferred choice for physical media for those without broadband.
2. Consumers don't see any difference or care about the difference enough to matter.
3. The youngest generation to hold the power over the future of media distribution prefers streaming and downloads to having to wait for a disk to show up in a mailbox.
BluRay is the modern LaserDisc.
Echoing some of what many have said already, having a movie on a BD will have a bitrate and compression that is better than streaming for years to come. And when the infrastructure catches up, including higher bitrate and less compression from the streaming providers, we'll have BD+ or something to that effect, with higher quality. If I could get EXACTLY the same quality by extreme buffering, I might consider that -- but from what I can see, none of the streaming providers give me all those extras that are on a disc, which I do occasionally like to see, such as deleted scenes, director commentary, and so forth.
As far as watching "throwaway" or "one-time" movies on DVD versus BD, I'll still pick BD even for movies like "Final Destination 4" if at all possible. Even if a movie is complete crap, I still want to see it in 1080P!
I failed to see the logic in the argument that streaming is going to take over. Maybe in a decade, but not anytime soon. I work in the IT field and understand how the internet works. Who is going to pay for all of the required infrastructure upgrades to allow 1 million plus people to stream content at one time? Is Verizon or any telco going to allow this massive amount of traffic over there networks. The short answer is no. Comcast and others have already voted on this solution by imposing caps on their service. I have Netflix streaming and use it regularly, but it is not a solution for everyone. Almost all of my relatives do not even know what streaming is.
Disagree with the dvd being good enough to placate bluray player buyers who are sticker shocked by bluray disc prices. Its like saying to someone who bought a cd player that you can just buy tape cassettes of less important music while the cd's remain expensive. Once you get a new superior format spending any money on the old product is felt as much more wasteful. Its like buying vhs when dvd was expensive..i'd just rather hold off.
Here in Germany Blu-rays are by and large way more expensive than regular DVDs.
You do get the occasional bargain between 10 and 13 Euros, but most titles are still firmly in the 18-28 Euro range.
Compare that to DVD prices which are between 7 and 10 Euros for the bulk of the titles, and you can get many catalog titles for even less.
Player prices have come way down, but as long as discs are still that much more expensive, Blu-ray disc purchases will remain limited.
That said, compelling streaming options are still pretty much absent over here, so DVD will remain the dominant video content delivery method for several years to come.
I do hope Blu-ray prices will finally come down on a broader scale - the picture quality increase is quite substantial.
Forget all those silly overpriced blue ray players, VCR, Laser Disc, DVD, etc etc, after the developement period the format changes on the adverage every 3-4 years, after all the manufacters have to sell boxes, right ! so you upgrade your system to keep up with the technology, you then sell those obsolete boxes for silly money or accumuate them which become worthless. I bit the bullet and built myself a HTPC which Im proud of ,
it streams , plays DVD, Plays Blue Ray, watch tv, records, and of course the Internet, picture qualitiy is as good as my now defunced Meridian dvd player which cost me six years ago ( $5180 ).
Thought this link was interesting on the decline of 3D at the theaters?
http://gizmodo.com/5592956/is-3d-already-dying
NetFlix in Canada is a great idea. The only problem is the Internet provider bandwidth caps in Canada. Some providers (BELL Internet) are as low as 25GB per month (6Mbps profile), and the average is about 60GB per month. You can blow your cap very quickly streaming video content. Not sure if the bandwidth caps in the U.S. are as aggressive, but Netflix may have a hard time in Canada with the bandwidth caps......
I wonder how many people are affected by defective firmware updates that cripple some or all of the capabilities of their machine. I have a Samsung BDP-3600 which got an update to firmware version 2.9 at the end of May. After the update I have had problems getting newer blu ray titles, from certain studios, to play. Searching the internet, I've found there are a lot of people making the same complaint, but as of yet Samsung has not released a fix.
I considered getting a new machine from a different manufacturer. It occurred to me though that this is likely a problem not unique to Samsung. With the constantly changing DRM keys, I can't imagine how we could expect all of the manufacturers to get every update right all of the time. It makes me wonder if that may be what keeps blu ray from taking over. If it becomes standard that every year or so you have to spend a couple of months not being able to watch new movies because of a faulty update, will the public give up on the format?
I'm sorry, but I doubt that streaming will become the solution until bandwidth limits (in both download speed and download capacity limits) are removed and everyone goes to IPv6 Internet addressing. I think even Steve Jobs at Apple is aware of this, given the very poor sales of the Apple TV box.
Besides, with 40" LCD panels dropping under US$500 in price and name-brand Blu-ray players that are Profile 2.0 compatible dropping under US$150 in price, why go through the whole rigmarole of setting up streaming movies--which is not as simple setting up as some people think. Given that most broadband in the USA is under five megabits per second download speed (we're not Japan or South Korea, where 80-100 megabits per second download speeds on landline connections are common), streaming video with NetFlix is not that viable an option for many users.
By the way, if you want to get a good brand of Blu-ray players that won't frustrate you with constant need for firmware updates, get a Sony player. I have a Sony BDP-S370 and I've only had to update the firmware once, primarily to fix known issues with streaming video from the Internet.