Blu-ray/HD-DVD format war discussion thread.......

[BrianD]

To try to better sum up my point, I find it interesting that you claim the polls of "future shoppers" must be wrong because it doesn't match the trend of "current owners". The poll may in fact be wrong, but it doesn't seem to work to equate those two groups of consumers.

[Mizzou B-ball fan]

Originally Posted by BrianD

I agree with what you said, I just find it interesting that new shoppers are leaning in a direction away from the current installed leaders. Whether this means that future sales will trend in the opposite direction as past sales remains to be seen. I wouldn't use this one poll to say that HD-DVD is going to end up winning the war, but it does make me wonder why new shoppers aren't thinking along the lines of the current trends.

The problem with a poll like this sometimes has to do with the phrasing of the question. You can get just about any response you like depending on the wording. While the articles about this poll cite the percentages, I haven't seen the actual poll question listed anywhere. Also, many of the respondants, depending on their tech background, may or may not know about the BR capabilities in the PS3.

Similarly, due to 'DVD' being in the HD-DVD name, there's a lot of people who are not fully aware of the HD-DVD market that assume that DVD and HD-DVD are the same thing. Certainly can't fault Toshiba for that as it helps their name recognition, but I'm not totally sure that it translates to sales in the end.

[Mizzou B-ball fan]

Originally Posted by BrianD

To try to better sum up my point, I find it interesting that you claim the polls of "future shoppers" must be wrong because it doesn't match the trend of "current owners". The poll may in fact be wrong, but it doesn't seem to work to equate those two groups of consumers.

The problem in this case is that 'future shoppers' doesn't qualify just how 'ready' these people are to make the jump into the HD movie market. If the majority of these people don't want to make the jump until 12-24 months from now, that's a huge problem for HD-DVD as they need the numbers to come right now. You are right in that these survey numbers are very general and tough to translate. We have to speculate a lot to draw the true meaning of these numbers without the full information that we need.

[Bee]

Originally Posted by Mizzou B-ball fan

But once again, you can't measure equipment sales by just stand-alone players. The PS3 is actually regarded as one of the best BR players on the market, especially in the sub-$1000 category. People do actually buy the PS3 for just the BR player.

As far as the movie studios go, they could generally care less about the installed base of a given HD media player. They don't make a dime off those sales. They make money when movies sell. Right now, BR is providing better sales numbers than HD-DVD. That's what they'll look at in the end when making business decisions.

The survey isn't about stand-alone players, it's about which format people looking to buy a HD player are favoring. That would include people buying a PS3 just for a BR player.

I think in addition to current sales, any executive worth his salt would be tracking future trends as well. Betamax outsold VHS tapes after the first year, but we know how that turned out.

[Daimyo]

The 3 million to 1 million on total players is a little misleading though as some percentage of the 3 million installed BR players won't purchase a BR disc. We can't really use the 300k to 1 million for dedicated players either because we know that a percentage of the PS3s are used as BR players.

The war is still pretty far from over... HDDVD players are now cheap enough to compete against the good upscaling DVD players on price and are really starting to move hardware. We still don't know if the people buying the cheap HDDVD players will buy enough media to make a difference though... if they start buying media, HDDVD could catch up quickly. It looked like it was starting to happen last week, but then BR had the two big releases this week.

[Bee]

Originally Posted by BrianD

I agree with what you said, I just find it interesting that new shoppers are leaning in a direction away from the current installed leaders. Whether this means that future sales will trend in the opposite direction as past sales remains to be seen. I wouldn't use this one poll to say that HD-DVD is going to end up winning the war, but it does make me wonder why new shoppers aren't thinking along the lines of the current trends.

On the PS3/360 side, there would have been a point in time where the PS3 wasn't showing increased sales numbers yet the new shoppers were starting to lean in that direction. I don't mean to fully equate the two situations, but I do still wonder why the polling results (for that one poll) are they way they are.

That was pretty much my point as well. I was surprised by the numbers and that's the reason I posted the survey.

[Mizzou B-ball fan]

Originally Posted by Bee

Betamax outsold VHS tapes after the first year, but we know how that turned out.

Absolutely, but that battle was very similar to this one. In the end, VHS won because of a key player in the form of the porn industry. Those porn movies single-handedly won that battle because of the high demand for those movies. By the same token, BR has the majority of the movie studios in their court in this battle and may add Warner in the near future. If that's the case, BR will win this battle the same way VHS won its battle: get the movies that people want on your media.

[BrianD]

Originally Posted by Mizzou B-ball fan

The problem with a poll like this sometimes has to do with the phrasing of the question. You can get just about any response you like depending on the wording. While the articles about this poll cite the percentages, I haven't seen the actual poll question listed anywhere. Also, many of the respondants, depending on their tech background, may or may not know about the BR capabilities in the PS3.

Similarly, due to 'DVD' being in the HD-DVD name, there's a lot of people who are not fully aware of the HD-DVD market that assume that DVD and HD-DVD are the same thing. Certainly can't fault Toshiba for that as it helps their name recognition, but I'm not totally sure that it translates to sales in the end.

I think everyone is fully aware of how polls can be constructed to elicit a particular response. I think everyone is also fully aware of how statistics can be manipulated to show whatever you want them to show. At least your responses above deal with the poll itself and don't just say that the poll is wrong because future shoppers don't match past shoppers. Of course, you are clearly starting with the assumption that the poll is incorrect...

[Mizzou B-ball fan]

Originally Posted by BrianD

At least your responses above deal with the poll itself and don't just say that the poll is wrong because future shoppers don't match past shoppers. Of course, you are clearly starting with the assumption that the poll is incorrect...

Polls to me are a way to tilt situations in the favor of one side or another and little more. Similarly, I despise press releases from companies stating percentages rather than giving the hard numbers behind those percentages.

A perfect example of that was Sony's press release stating that 'PS3 sales numbers were up 192% over Black Friday weekend'. I didn't post it in the console discussion for a reason. If Sony knows that sales are up 192%, why not just say that they sold XX,XXX consoles instead of use percentages that appear to inflate the results?

Similarly, I dislike percentages in polls without the specific question and poll count listed. I feel like they're giving me an incomplete picture of what they're saying. Hard numbers provide a much better situation than any poll. Until those people smack down their hard-earned dollars, their possible sale doesn't do anything for a company.

[BrianD]

Originally Posted by Mizzou B-ball fan

Hard numbers provide a much better situation than any poll. Until those people smack down their hard-earned dollars, their possible sale doesn't do anything for a company.

This is all well and good, but I'm not part of a company - at least not one involved in this industry. I am a (potential) consumer, so I do find thoughts of other potential consumers interesting. I wouldn't make a decision based on just one poll, but I would dismiss it out of hand either. I also wouldn't just use polls but also reviews of current owners.

[Bee]

Originally Posted by Mizzou B-ball fan

By the same token, BR has the majority of the movie studios in their court in this battle and may add Warner in the near future.

I was just looking at the numbers and was surprised BR didn't have a larger lead in exclusive titles. Currently BR has 268 exclusive titles and HD-DVD has 210. In my mind BR had a much bigger lead than that.

[BrianD]

Originally Posted by Bee

I was just looking at the numbers and was surprised BR didn't have a larger lead in exclusive titles. Currently BR has 268 exclusive titles and HD-DVD has 210. In my mind BR had a much bigger lead than that.

Is there a website somewhere listing the different studios and their current status (exclusive/shared) with different formats? As HD is still in an early adopter phase, I'm curious how the studios line up with respect to catalogs enticing to early adopters.

[Mizzou B-ball fan]

Originally Posted by Bee

I was just looking at the numbers and was surprised BR didn't have a larger lead in exclusive titles. Currently BR has 268 exclusive titles and HD-DVD has 210. In my mind BR had a much bigger lead than that.

Remember that HD-DVD came out 6 months earlier than BR. HD-DVD had quite a few exclusive titles right off the bat when the technology was introduced. The margin of exclusive titles is wider than that in favor of BR since the head-to-head battle began.

[Mizzou B-ball fan]

Originally Posted by BrianD

Is there a website somewhere listing the different studios and their current status (exclusive/shared) with different formats? As HD is still in an early adopter phase, I'm curious how the studios line up with respect to catalogs enticing to early adopters.

Here's a list of the exclusive studios (Warner is the only remaining neutral 'big' studio):

BR:

Lionsgate
Sony
Fox
Disney

HD-DVD:

Paramount/Dreamworks
Universal

[BrianD]

Originally Posted by Mizzou B-ball fan

Here's a list of the exclusive studios (Warner is the only remaining neutral 'big' studio):

BR:

Lionsgate
Sony
Fox
Disney

HD-DVD:

Paramount/Dreamworks
Universal

Interestingly, if WB ever decided to go exclusive to HD-DVD, this would be the same breakdown as during the DVD/DIVX format war with BR having the same studios as DIVX. This is meaningless since DIVX was a different business model while BR is just a different format, but it is still interesting.

[Bee]

Originally Posted by BrianD

Is there a website somewhere listing the different studios and their current status (exclusive/shared) with different formats? As HD is still in an early adopter phase, I'm curious how the studios line up with respect to catalogs enticing to early adopters.

Yes, but I no longer have the website opened up. I think the name was something like blu-ray statistics dot com or something like that. (Sorry I can't be of more help).

The website actually gave all the studios (beyond the major ones that MBBF posted above) and how many releases they each have.

[Mizzou B-ball fan]

Originally Posted by Bee

Yes, but I no longer have the website opened up. I think the name was something like blu-ray statistics dot com or something like that. (Sorry I can't be of more help).

The website actually gave all the studios (beyond the major ones that MBBF posted above) and how many releases they each have.

Yep, here's the sites you're referring to.......

hxxp://www.hddvdstats.com
hxxp://www.blu-raystats.com

[Daimyo]

Adding in percentage of market:

BR:
Lionsgate - 4.2%
Sony - 13.7%
Fox - 9.5%
Disney - 13.5%
TOTAL: 40.9%

HD-DVD:
Paramount/Dreamworks - 16.5%
Universal - 12.0%
TOTAL: 28.5%


Warner Bros is worth 13.4% to whoever can get it (if it does go exclusive).
(admittedly this is based on box office sales in 2007, and not DVD sales, but it should be a solid proxy and was easy to find.)

[Mizzou B-ball fan]

Originally Posted by Daimyo

Adding in percentage of market:

BR:
Lionsgate - 4.2%
Sony - 13.7%
Fox - 9.5%
Disney - 13.5%
TOTAL: 40.9%

HD-DVD:
Paramount/Dreamworks - 16.5%
Universal - 12.0%
TOTAL: 28.5%


Warner Bros is worth 13.4% to whoever can get it (if it does go exclusive).
(admittedly this is based on box office sales in 2007, and not DVD sales, but it should be a solid proxy and was easy to find.)

Part of the problem for HD-DVD thus far this year has been Universal's lack of big hits. They've spent most of the year without a top 20 sales title. It's one of the major reasons why the Paramount/Dreamworks deal was so big for Toshiba to stay in the race. They got instant sales hits with Transformers and Shrek the Third, something Universal was having trouble doing.

[cartman]

Something to ponder as well in the race for studios is indeed which studios are currently doing well at the box office. Since current next-gen players do a great job of upconverting existing DVD titles, there isn't much impetus for people to repurchase titles they currently own. They are going to purchase next-gen media going forward. And the past couple of years, there have only been a handful of great movies to come out, and with the small install base of next gen players, that small sample size can make it look like one format or the other has a great advantage.

It is almost impossible to determine based on the numbers that are out there, but I would be very interested to see the total sales figures for all non-exclusive titles from Warner Bros. and see if they mirror the two to one or three to one BR over HD-DVD overall figures.

[Arles]

I went to two Best Buys and one Target last night looking for the Blu-ray version of the HP box set. None of the four stores had any, but the Best Buys still had a ton of the HD-DVD version. It's a tiny sample, but I had the guy at BB check other stores for the HP box blu-ray and only 1 had one (and it was across the city). It could be because more HD-DVDs were made, but it's certainly a lot tougher to find the Blu-Ray version (I ended up ordering it from Amazon).

I also wonder about the PS3. Both myself and three guys from work all trade Blu-Ray titles to watch (and I get much of mine from rentals on BB.com). None of us have a "stand alone" player, we all have PS3s - but I bet we own about 40-50 Blu-Ray DVDs all together. IMO, most of the people that have purchased a PS3 in the past 2 years had to have done so with Blu-Ray on the brain. I own both a 360 and PS3 (and a Wii) and there is no reason I would have purchased the PS3 over the 360 if I had to choose just on gaming. In fact, if it didn't have a Blu-Ray, I would not have bought it at all.

[Daimyo]

For Amazon at least it looks like the HD-DVD version of Order of Phoenix is selling more than the Blu-Ray version, but for the box set its reversed:

http://www.amazon.com/gp/bestsellers..._zg_hrsr_d_3_4

[stevew]

dunno if this is Sears exclusive, or if it's nation wide w/ other retailers.

Buy a 46" W series(2299) or a 52" W Series(2999) and get the basic sony blu ray player for free. Buy the 40" for 1750 and get the player for 199.99.

As a stand alone, the player is 299 at sears this week.

Finally moved my 2nd and 3rd blu ray players at work this week(in a year)...my personal next gen dvd war now stands at BD:3, HDDVD:2.

[Mizzou B-ball fan]

Originally Posted by Daimyo

Sure, HD-DVD still trails, but they've been moving hardware much faster over the last few weeks and their huge lead in dedicated hardware eventually needs to translate into movie sales or they will fail. The interesting thing about them pulling to 58:42 is that it wasn't powered by a single big release which may indicate that the hardware advantage is finally starting to play out with people buying from the long tail/back catalog. If that is a trend HD-DVD could steadily start making gains and it would be the first sign their mass market pricing strategy is starting to work. If it drops back to 65:35 or something like that, I'd say they're in huge trouble.

New numbers for week ending December 16th are in. Looks like the first Harry Potter week went to Blu-ray with a 61% to 39% advantage. More info concerning the specific titles should be in soon, but it appears that the new Bourne movie on HD-DVD didn't nearly as well as they expected.

[Mizzou B-ball fan]

Originally Posted by stevew

dunno if this is Sears exclusive, or if it's nation wide w/ other retailers.

Buy a 46" W series(2299) or a 52" W Series(2999) and get the basic sony blu ray player for free. Buy the 40" for 1750 and get the player for 199.99.

As a stand alone, the player is 299 at sears this week.

I'm not sure that it's nationwide yet, but several retailers are offering free BR players with a Bravia TV purchase.

There are now 2 Blu-ray stand-alone players at the $299 price point.

[Daimyo]

Originally Posted by Mizzou B-ball fan

New numbers for week ending December 16th are in. Looks like the first Harry Potter week went to Blu-ray with a 61% to 39% advantage. More info concerning the specific titles should be in soon, but it appears that the new Bourne movie on HD-DVD didn't nearly as well as they expected.

Link? (funny that you have to be asked for a link as you're the one always harping on it.)

I usually get it from engadget and they specifically mentioned a lack of numbers so far in the most recent post.

[Daimyo]

DOLA, the few numbers they have contradict your post... according to them Bourne outsold Harry Potter 2-to-1 on HD-DVD.

http://www.engadgethd.com/2007/12/20...-sales-charts/

[Mizzou B-ball fan]

Originally Posted by Daimyo

Link? (funny that you have to be asked for a link as you're the one always harping on it.)

I usually get it from engadget and they specifically mentioned a lack of numbers so far in the most recent post.

Info is actually from a poster over on the Hi-Def Digest message board. He always posts the numbers a few days before they are released by Nielsen. He evidently works for them or has someone feed him the numbers. Here's the text from his post:

Bourne Ultimatum wins the week handily selling 3 discs for every 2 discs of second place POTC 3, which will show very strong sales in week 2 and pass Casino Royale in total sales.

On the Harry Potter front, sales will be a bit disappointing for such a big blockbuster. For every one HD DVD, the BD will sell 1.2 copies. HD DVD fans will see this as a “win”, but the fact remains, it will still sell more on BD in the first week.

The box sets in each of the formats will have similar results, but the BD’s will sell slightly better by a 1.3 margin. This will most likely be due to some people buying HP 4 from Europe, but who knows. Overall though, box set sales will be about 20% of the single unit sales.

Planet Earth will continue to show very strong sales on both HD DVD and BD, but for the week the HD DVD will sell almost 1.8 copies for every one 1 on BD as it surpasses the six figure mark in sales since it was first released. The BD should surpass this mark in 3-4 weeks if the trends continue.

So, for the week, 6 of the top 20 titles will be red, but Blu dominates again with 14 titles and handily wins the week 61% to 39% on what will be a record volume of sales for both formats.

[Mizzou B-ball fan]

New numbers for Week ending December 23rd were leaked. Blu-ray wins the week by a 61-39 margin.

Top 10 titles for week ending December 23rd:

1. The Bourne Ultimatum (HD)
2. The Simpson’s (BR)
3. Pirates 3 (BR)
4. Harry Potter (BR)
5. Harry Potter (HD)
6. Planet Earth (BR)
7. Spiderman 3 (BR)
8. Transformers (HD)
9. 300 (BR)
10. Planet Earth (HD)

[Mizzou B-ball fan]

Great new deals on HD movies at Amazon. Buy one, get one free deal on HD-DVD's......

http://www.amazon.com/gp/feature.htm...rd_i=193642011

Blu-ray appears to have the better buy one, get one free this time around. Harry Potter movies are included in the latest BR deal, meaning you can pick up all 4 Harry Potter movies in HD for around $40 shipped.

http://www.amazon.com/gp/feature.htm...rd_i=193640011

[Daimyo]

The Harry Potter HDDVDs were originally included in the HDDVD BOGO, but not anymore.

In fact last week the HDDVD versions of the first four Harry Potter movies ranked 1-4 in Amazon's DVD rankings (not just HD discs, but among all DVD, HDDVD, and BR). No HD disc had ever ranked #1 on Amazon's sales charts before with 300 coming closest at #2 during its release week.

[Logan]

The HP movies were available, among others, in the HD-DVD format a few days ago but were removed from the list.

[Daimyo]

DOLA...

heh, now that the BR versions are BOGO they've duplicated the feat.

http://www.amazon.com/gp/bestsellers...f=pd_dp_ts_d_1

[Mizzou B-ball fan]

Originally Posted by Daimyo

DOLA...

heh, now that the BR versions are BOGO they've duplicated the feat.

http://www.amazon.com/gp/bestsellers...f=pd_dp_ts_d_1

Yeah, the BOGO deals on both format have really helped the sales numbers on both formats to the point where they are competitive even against some of the DVD counterparts. It's hard to beat getting 2 HD movies for $20. The DVD versions cost that much, if not more.

[SackAttack]

I'm trying to refrain from buying the HP's right now. I'd love to have them at that price, but I really shouldn't spend the money right this moment.

[Daimyo]

BR has actually had BOGO deals several times over the last year (and not just limited to Amazon like this one)... Many point to them as one of the factors fueling BR's disc sales lead. HDDVD is just recently, finally starting to get into the game.

[Mizzou B-ball fan]

Interesting article discussing how little 'suggested retail price' factors into the buying decision of a retail purchaser.........

http://www.thedigitalbits.com/articl...ial010108.html

A Retail Perspective on the Format War

Editorial by Jeff Kleist of The Digital Bits

As the high-definition format war rages on, one thing I keep hearing over and over in various interviews and discussion forums is the phrase "let the consumer decide." But that's actually more of a marketing term than an actual practice or truth when it comes to the retail industry. As a former video buyer for a chain of audio/video media stores that catered to enthusiasts, I hope I can provide a unique perspective on this notion that hasn't had a lot of discussion thus far.

When I used to sit down with my order book to try and make buying decisions, I would often use Video Store News (now Home Media Magazine) and Variety to consider factors like the box office take of a film. I also looked at enthusiast magazines and websites to find those "video specials" to take a chance on - titles like Equilibrium or the upcoming Sunshine - that have great response from fans, but had a small and fast box office run. Of course, you always had a decent idea that blockbuster titles like Transformers or the latest Matrix film would sell based on prior big movies, but the real skill was in anticipating the small titles that boom.

A major factor in how many of those titles I could purchase for our chain, and how many I could stock, was the physical space I had available to put them in. Sure, I could order 15 copies of Sunshine, but can I move them inside of a couple weeks? Because I need space for the 60-70 copies of Saw IV I'm going to get in. Achieving that balance point between the evergreen catalog titles (steady sellers), the slow moving catalog titles (you need to have them, but they don't sell every week), the new releases and the eclectic stuff (that takes forever to sell, but it's worth the smile on the person's face when they find it in your store), is the goal of every buyer. But hitting that balance point means that you're not going to have a lot of shelf space to play with, and if you guess wrong, then you're up a creek without a paddle for a week or more, with either the back room overflowing with product, or empty shelves and annoyed customers.

All this brings me to my point: The big box retailers like Best Buy or Wal-Mart are the primary conduits through which video titles move to the general public. Like it or not, home video HAS to be a mainstream product for the studios to make money. Wal-Mart alone moves about 30-40% of all home video product (though Best Buy and Amazon are moving more high-definition software right now because enthusiasts tend to shop online). Less than 1 in 5 DVDs are sold online.

Recently, Best Buy has reconfigured their high-definition software areas to either a 2 to 1 or 3 to 1 Blu-ray Disc vs. HD-DVD split, depending on the store's sales. Typically, this is now filling around a full aisle on both sides. Given the number of units that high-definition media is currently shifting, it's unlikely they will be willing to expand past this aisle in the near future. So now that the Christmas shopping season is over, they'll have to start making a choice: Which format is going to start losing shelf space?

A decision like that, for a large retailer, is more complicated than just what the split of media sales is. There are other questions to be asked. For example: How well does the format support the rest of their product lines? Which format helps them move more TVs, cables, and furniture? Which generates more profit on average? Any retailer worth his salt right now would rather move 1 Blu-ray player a week with a $150 profit margin (35% is standard markup at retail), than 5 HD-DVD players that they make a reported $30-50 margin on (a number that's reportedly been maintained even with the recent fire sales). Why? Because it costs less to store and ship 1 player as opposed to 5, given those profit margins, and it also requires far less of an investment in terms of your purchasing budget. The large margin also allows for active discounting to bundle the player with TVs and other accessories, and to drive sales across the board. In addition, the large number of manufacturers and products associated with Blu-ray (from the PS3, to laptops and desktops with drives, to set top players and TVs) results in exponentially more ad buys in the circular, and more end cap displays in the stores. Right now many Best Buy stores have 6 standalone displays featuring Blu-ray Disc, and just 2 for HD-DVD (counting LG's combo player as 1 each).

So in the end, this notion of "letting the consumer decide" is something of a fallacy. It's the retailers who actually decide what products consumers get to chose from, and they're going to pick and stock the products that bring them the most money for the least amount of work. If they don't stock something, you can't buy it. What's more, if they aren't stocking a product, the chances are good that mainstream consumers will never notice that it's missing. Fewer consumers still (outside of early adopters who are heavily invested and pay close attention to such things) will have the motivation to go seek it out online.

Right now, in the wake of the Christmas shopping season, all of the signs (from industry insider rumblings to how high-definition hardware and software are being pushed in stores) tell me that the major retailers will call the ball on this format war very soon, and those signs are all pointing in Blu-ray Disc's favor. Consider that despite the $169 HD-DVD player at Sears on Black Friday, Blu-ray Disc players that were over twice as expensive outsold it 2 to 1. How long did it take for the Hollywood studios to completely dump VHS (in favor of DVD) after Best Buy and Wal-Mart did? About a year, and they dumped VCRs without built-in DVD drives about a year after that.

For high-definition media to thrive, anyone with experience in the retail industry knows that one of these formats must live and one must die, and that's going to happen sooner rather than later, no matter what Toshiba or Sony or Microsoft or the Blu-ray Disc Association or the HD-DVD Promotions Group want. If one of these formats isn't ultimately chosen by the studios and manufacturers, then sooner or later the big box stores will decide that neither of them is worth the effort, and that won't be good for anyone - not the studios, not the retailers and especially not the consumer.

[BrianD]

Is this the same guy at The Digital Bits that chastised Toshiba for the Black Friday sales because they should just be giving up so Blu-Ray can win and the format war will end? I was a big fan of The Digital Bits during the early days of DVD but they have turned into such a group of Sony/Blu-Ray fanboys that I refuse to visit the site anymore. They may still deal in decent facts, but they have lost the appearance of objectivity.

[Daimyo]

Originally Posted by Mizzou B-ball fan

Consider that despite the $169 HD-DVD player at Sears on Black Friday, Blu-ray Disc players that were over twice as expensive outsold it 2 to 1

He must be counting PS3 sales in that metric which makes it pretty much worthless. *shurg*

[cartman]

That columnist must have failed Macroeconomics 101.

[Mizzou B-ball fan]

Originally Posted by BrianD

Is this the same guy at The Digital Bits that chastised Toshiba for the Black Friday sales because they should just be giving up so Blu-Ray can win and the format war will end? I was a big fan of The Digital Bits during the early days of DVD but they have turned into such a group of Sony/Blu-Ray fanboys that I refuse to visit the site anymore. They may still deal in decent facts, but they have lost the appearance of objectivity.

Pretty sure that was the founder of the site. The writer of this editorial is not the same person, though you are correct that it is the same website.

I think that article was written out of frustration more than anything else. This format war has gone on far longer than it ever should have gone.

[Mizzou B-ball fan]

Originally Posted by cartman

That columnist must have failed Macroeconomics 101.

Why do you say that? Hard to agree or disagree with you since you didn't give specifics. Which parts do you believe to be inaccurate?

It should be noted that this is an editorial, however, that doesn't give the writer a license to put incorrect information in his article if you believe that to be the case.

[Mizzou B-ball fan]

Originally Posted by Daimyo

He must be counting PS3 sales in that metric which makes it pretty much worthless. *shurg*

Herein lies the sudden quandry that is faced. The constant argument from the HD-DVD camp has been that the PS3 doesn't have any effect on BR disc sales. As I mentioned before, I think it does have some effect, though not nearly as direct as the sale of a stand-alone player.

If the new HD-DVD 360 comes to pass at CES 2008, that argument is pretty much out the window as they would appear to be conceding that a packaged HD media drive does have an effect on sales, hence the reason they're including it in the 360. In that case, the comparison becomes apples to apples and that reasoning is no longer applicable to the argument.

[cartman]

Originally Posted by Mizzou B-ball fan

Why do you say that? Hard to agree or disagree with you since you didn't give specifics. Which parts do you believe to be inaccurate?

It should be noted that this is an editorial, however, that doesn't give the writer a license to put incorrect information in his article if you believe that to be the case.

Anyone with understanding of Macroeconomics can see the holes in the editorial. He says that the reason people can't buy VHS players anymore is because stores don't sell them. If he left it at that, it'd be ok. But he rationalized it by saying that demand went away when they were pulled from the shelves. In reality, demand had been waning for quite sometime, and when it was no longer cost effective to keep them in stock, the big box retailers pulled them.

That is why trying to use that analogy to compare Blu-Ray/HD-DVD is false. Both camps volume of sales are growing, and keeping about the 1.5 to 1 title sales ratio between the two on increasing sales each month. But by his own admission, the amount of shelf space devoted to the two groups is in far excess of their piece of the overall market. DVD players and titles are still far outpacing those of high-def players.

To say the big box retailers are going to dump HD-DVD, when the sales are still growing, goes against his whole argument. A big reason Blu-ray had more shelf space recently is because they were paying for it, not because of a great uptick in consumer demand or because the big box retailers were trying to deep six HD-DVD.

[Mizzou B-ball fan]

Originally Posted by cartman

Anyone with understanding of Macroeconomics can see the holes in the editorial. He says that the reason people can't buy VHS players anymore is because stores don't sell them. If he left it at that, it'd be ok. But he rationalized it by saying that demand went away when they were pulled from the shelves. In reality, demand had been waning for quite sometime, and when it was no longer cost effective to keep them in stock, the big box retailers pulled them.

That is why trying to use that analogy to compare Blu-Ray/HD-DVD is false. Both camps volume of sales are growing, and keeping about the 1.5 to 1 title sales ratio between the two on increasing sales each month. But by his own admission, the amount of shelf space devoted to the two groups is in far excess of their piece of the overall market. DVD players and titles are still far outpacing those of high-def players.

To say the big box retailers are going to dump HD-DVD, when the sales are still growing, goes against his whole argument. A big reason Blu-ray had more shelf space recently is because they were paying for it, not because of a great uptick in consumer demand or because the big box retailers were trying to deep six HD-DVD.

I'd generally agree with most of this except for the last set of statements. While comment about shelf space and Sony paying for it is correct, that's part of the price of doing business and it will cause an increase in business (they're not adding that shelf space just for looks). For that matter, if Paramount/Dreamworks wasn't paid for HD-DVD exclusivity, this format war WOULD be all but over.

I'd also generally agree that the retailers tend to react to trends. Currently, several of the major HDTV companies are offering free BR players (PS3 is one of those options) with the purchase of a HDTV. No similar offers exist for HD-DVD. I have no doubts that Sony is assisting with that as well, but that's another deal that's going to increase their installed base.

[Daimyo]

Originally Posted by Mizzou B-ball fan

Herein lies the sudden quandry that is faced. The constant argument from the HD-DVD camp has been that the PS3 doesn't have any effect on BR disc sales. As I mentioned before, I think it does have some effect, though not nearly as direct as the sale of a stand-alone player.

If the new HD-DVD 360 comes to pass at CES 2008, that argument is pretty much out the window as they would appear to be conceding that a packaged HD media drive does have an effect on sales, hence the reason they're including it in the 360. In that case, the comparison becomes apples to apples and that reasoning is no longer applicable to the argument.

The thing is there is room for the middle ground. PS3s obviously don't count equally as standalone players and they obviously don't count for nothing. They count as some percentage of a standalone player. Saying BR players outsold HDDVD players 2 to 1 is worthless since almost all those BR players were PS3s.

For example, assume 90% of the BR player sales were PS3s and a PS3 counts as 20% of a standalone player (in terms of HDM consumption)... that 2 to 1 ratio now becomes 0.56 to 1 and what appeared to be a huge "win" for BR is actually a huge win for HDDVD. In that scenario each PS3 would have to count as 44% of a standalone player for BR player sales to be even...

[Mizzou B-ball fan]

Originally Posted by Daimyo

The thing is there is room for the middle ground. PS3s obviously don't count equally as standalone players and they obviously don't count for nothing. They count as some percentage of a standalone player. Saying BR players outsold HDDVD players 2 to 1 is worthless since almost all those BR players were PS3s.

For example, assume 90% of the BR player sales were PS3s and a PS3 counts as 20% of a standalone player (in terms of HDM consumption)... that 2 to 1 ratio now becomes 0.56 to 1 and what appeared to be a huge "win" for BR is actually a huge win for HDDVD. In that scenario each PS3 would have to count as 44% of a standalone player for BR player sales to be even...

I agree that including the PS3's fully isn't any better than comparing the stand-alone players and declaring HD-DVD in the lead. In an ideal situation, assigning a percentage would work well. But there's no way to measure that ratio accurately. You could get a poll, but the margin of error would be pretty large in this situation. Also, the percentage of PS3 owners who do use it for movie purposes will likely go up as adoption rates increase, so it's a moving target.

With that not being a viable option, the next best measure is movie sales. As much as people like to talk about the installed bases (no matter which way you measure it), the real profit/royalties are made on the unit sales, especially when it reaches a mass market level similar to DVD, hence the reason that the sooner this format war is over, the better it is for the companies involved.

[Daimyo]

Unfortunately disc sales numbers are heavily influenced by discounts and BOGOs so they're also a bit unreliable... the best measure would be adjusted sales that only count discs paid for (ie, BOGO count as a single sale instead of as two sales).

BR has "won" every week this year, but at least one week (Transformers) the only reason they won was because of a Disney BOGO sale. I'm sure the studios are much more interested in profits than raw unit sales... unfortunately those numbers don't get released.

[Atocep]

Sony has also been much more aggressive with the BOGO offers and Walmart numbers are not included so there's no way anyone can say the 1.5-1 is an accurate reflection of movie sales.

Its safe to say the sales numbers are closer than 1.5-1, but its impossible to know how much closer.

[Mizzou B-ball fan]

Originally Posted by Atocep

Sony has also been much more aggressive with the BOGO offers and Walmart numbers are not included so there's no way anyone can say the 1.5-1 is an accurate reflection of movie sales.

Its safe to say the sales numbers are closer than 1.5-1, but its impossible to know how much closer.

I agree that those sales influence the numbers, but you can't discount that purchase just because it was a sale. Sales are created to move units. They're moving units to try to win the format war. I didn't see anyone commenting how the sales of the $99 HD-DVD players should be discounted as not full sales because they were clearance priced to significantly boost the number of stand-alone HD-DVD players. It would be just as silly to state that 150-180K of the HD-DVD units don't count because they were sold at well under the suggested retail price.

Those sales aren't dirty pool nor are they inaccurate numbers. That's the price of doing business and beating out your competitor. You take the smaller profits now with the long term goal of winning the war and making lots of money in a year or two. Dismissing sales because they were sold at a reduced profit or break-even is a very weak stance.