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Blu-ray, Say Hello to iMovies, in HD

by January 15, 2008
Apple TV - BD and HD DVD buster?

Apple TV - BD and HD DVD buster?

After just finishing at CES with the apparent win over rival physical format HD DVD, Blu-ray will again be challenged for title home video successor to the DVD. The latest threat is from Apple’s iTunes:

Steve Jobs has opened Macworld 2008 with an announcement that iTunes has deals in place to rent movies from every major Hollywood studio and that rentals will be available in HD. Currently, iTunes already claims more than 7 million movie download sales, a number that exceeds sales of both physical HD formats.

Apple states that the rental service is slated to begin in February with a claim of more than 1000 titles available, which also exceeds the nearly 800 titles available on both physical formats combined and all new release titles available 30 days after the DVD hits store shelves.

Apple has also disclosed rental terms with pricing for new titles and catalog titles at $3.99 and $2.99 respectively with a $1.00 surcharge for the titles in HD after an iTunes software update. Renters will have 30 days to begin watching a title and 24 hours to finish a title once viewing has begun. Renters are said to be able to watch the movies on Macs and PCs as well as the iPod and the iPhone.

Meanwhile, back at CES, the recent BDA press conference was quite bullish and featured claims of expected strong growth for the Blu-ray format in 2008. The BDA cited conservative projections for hardware sales of 2 million set top BD players and 4 million PS3s. Combined with the 3.7 million PS3s and 0.5 million set tops currently in the US, the BDA expects to top 10 million players by years end.

The BDA press conference was followed by a bear of an NPD conference that illustrated the problems Blu-ray will have to deal with before mass adoption will occur. Consumer confusion remains high with NPD surveys showing that 80% of people claiming to have bought HD media had not because the titles were presently unreleased. This consumer confusion was also true of people making claims of purchasing an HD player. NPD also found that the format war itself was not the real barrier to buying into one of the new formats. Of the participants in a survey of people who were unlikely to buy an HD player:

  • 72% wanted the prices to come down
  • 70% didn’t need to replace their DVD player
  • 54% were waiting for the format war to end

Numbers like these related to HD player price coupled with no desire to replace perfectly good DVD players should certainly lead to questions of why Warner would chose to back Blu-ray as the way forward to jump starting mainstream HD disc sales when they require more expensive players. Mainstream consumers really don’t care about the format war per se, but they do care how much it is going to cost to upgrade to the new player, especially when there is nothing wrong with the old one.

Statistics from Black Friday show that HD optical discs players have a long way to go with only a 10% market share of player sales compared with SD DVD even with the best sale pricing of the year to move players.

After smiting HD DVD based on title availability, what will Blu-ray have to compete with as far as titles available for rental from iTunes?

Apple’s studio list is said to include:

  • Touchstone
  • MGM
  • Miramax
  • New Line
  • Lionsgate
  • Fox
  • Warner Brothers
  • Disney
  • Paramount
  • Universal
  • Sony

Wait, aren’t most of these studios on one side or the other in the optical disc format war?

Well, yes.

With every major studio on board, BD will effectively have to fight the equivalent combined might of itself in addition to the exclusive titles available on HD DVD.

Just goes to show that if one sales pitch to sell movies does not work, the studios will abandon any consumers who did spend money for the next greatest thing in a second. Looks like Warner wants to make sure it can cash in on physical discs while the opportunity still exists.

This should be interesting for Sony who, who unlike the other studios, also has a direct interest in the competing Blu-ray hardware format. The uncomfortable damned if you do damned if you don’t position for Sony is that the studio side of the business has to go along with the download model or risk early growth revenue while risking the R&D investment by competing with Blu-ray.

About the author:
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Professionally, David engineers building structures. He is also a musician and audio enthusiast. David gives his perspective about loudspeakers and complex audio topics from his mechanical engineering and HAA Certified Level I training.

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