DVD Dead in 18 Months? We Don't Think So.

Now that the high-definition disc format war is over, there is a lot of speculation about what exactly will happen next. Will Blu-ray players drop in price enough to really motivate consumers to get on board? Will the studios get behind those who would make downloadable content the new media? Will digital cable and satellite pave the way for high definition content direct to consumers' homes? Or, as John Cox, President of Xperinet Inc boldly predicts, will the DVD be dead in 18 months.

Asphinctersayswhat? DVD dead in 18 months?

We've heard some bold claims in our time, but never one so... well, inherently, ignorantly wrong. Here's the quote in context:

"The DVD will be dead in 18 months," predicted John T. Cox, President and CEO of Xperinet. "Now that the format war has been resolved, the Studios are chomping at the bit to implement another wholesale format change. This means big money for them, as consumers start replacing their DVD libraries with Blu-ray."

Dead is a strong word. Dead implies a dearth of sales. Dead puts forth images of a failed format and rapidly shrinking consumer base to sustain sales of the format.

Dead isn't happening to DVD any time soon.

While some out there wish Blu-ray were the quick replacement of DVD, a country only just getting itself into the full throes of high definition television isn't going to throw out their DVD players and flock to Blu-ray. Not yet.

Nielsen released a 2007-inclusive report which found that only 13.7% of TV households in the United States (roughly 15.5 million out of 112.8 million total U.S. TV households) are equipped with HD televisions and HD tuners capable of receiving HDTV signals, a status Nielsen described as “HD Capable.”

Remember that many consumers believe they have HDTV when they in fact, need to understand how to get HDTV signals on their new television. With this in mind, the country is largely still watching standard definition content. And DVD penetration is over 80%. This effectively means that if you have a phone or a television, you probably have DVD.

Now we can understand how a company that wants to sell consumers media servers and clients would love to see all of the content in HD. Right now that means Blu-ray for media-based movie content. But don't think for a minute that wanting something to be true means it will happen any faster than history tells us. This is the biggest foot-in-mouth example I've seen in years. And it gets worse:

"The transition from DVD to Blu-ray represents the biggest quality improvement of any media change to date," continued Cox. "It's a difference you can really see, and once accustomed to it, anything less is unwatchable." Xperinet believes this dramatic step in picture quality will drive the 30 million households in America who own High Definition televisions to rapidly move on replacing their existing libraries of DVDs.

I guess we just redefined the "death" of DVD by saying that if 30 million houses who have HDTV dump their DVD players then the other 250+ million homes with DVD players will be forced to follow suit. Not without two very important things occurring:

• Hardware manufacturers must provide entry-level prices for Blu-ray players to the tune of generic $50 players you can find at Wal-mart these days. That is unlikely to happen for a number of years.
• Studios must cease production of DVDs and set up a timetable to do so. This is highly unlikely as the DVD sales market is tremendous for studios right now and the Blu-ray market is a very small portion of this. The Studios have always been reactionary in their behaviors and moves. They will not preempt the market before the CE industry causes change.

The release continues to make the P[resident of Xperinet look even more foolish:

"We anticipate Studios will begin publishing new movies on exclusively on Blu-ray as early as Christmas of this year, and will use the broadcast transition to HD as a justification for the move," continued Cox. "This will prove a boon for Blu-ray player manufacturers, as hold-out DVD customers are forced to upgrade. We expect by the fall of 2009, DVDs will rapidly disappear from retail stores, just as LPs did in 1987."

Utter hogwash. They then go on to pimp their media servers and how support for Blu-ray makes them better than the competition. It all comes down to a blatant scare tactic designed to convince anyone looking to purchase a media server-client solution that DVDs are quickly going away and that their company is therefore superior.

Our advice: Don't burn your DVD players just yet. There's a much longer and more flexible transition period coming in the next few years.