Another bit of bad news for Talkys BDA buddies

[Feanor]

I think your market stratification angle would be very plausable. If not for 1 minor issue: The bulk of the money in this product is not going to come from selling players, it's going to go to the BDA and other stakeholders through licensing via the sales of the BluRay titles themselves.

Every single manufacturers might actually prefer stratification to yield a higher margin, but they're not going to be able to enjoy that for the simple reason that Sony is holds both cards in this case. If competitors don't fight on price, Sony will grow its market share substantially because it could subsidize the hardware to support the cash cow that is the software! They've already done this somewhat (and successfully) with the PS3.

I also think there's pressure from other stakeholders to move on from DVD, something the likes of Panasonic, Denon, Pioneer, etc have no control over - the evil movie studios, who want to sell you the same movie yet again, to force upon you more copy protection, and to own a piece of your home like a Fief Lord.

The telling point might be that Sony is among the "evil movie studios" in addition to being a hardware maker like Panasonic, Denon, Pioneer, etc.

On the other hand Blue Ray Disc Association includes other interests than Sony so Sony doesn't entirely run the show. According Wikipedia, the 18 board members as of January 2008 were:

• Apple Inc.
• Dell Inc.
• Hewlett-Packard Company
• Hitachi, Ltd.
• LG Electronics
• Mitsubishi Electric
• Panasonic (Matsush!ta Electric)
• Pioneer Corporation
• Royal Philips Electronics
• Samsung Electronics
• Sharp Corporation
• Sony Corporation
• Sun Microsystems
• TDK Corporation
• Thomson SA
• Twentieth Century Fox
• Walt Disney Motion Pictures Group / Walt Disney Studios Home
• Entertainment
• Warner Bros. Entertainment, Inc.

That's a pretty broad representation of both hardware manufacturers and media producers. In addtion "contributors", officially eligible to be directors, include both h/w and s/w producers, e.g.

• MGM, Universal:
• DTS, Inc.
• Electronic Arts Inc.
• InterVideo Inc.
• Lionsgate Entertainment
• Metro Goldwyn Mayer
• Paramount Pictures/Viacom
• Universal Music Group
• Victor Company of Japan, Ltd. (JVC)

I'd still guess most are interested in stratification at this point in time, including the media producers who can still demand some premium for the Blu-Ray versions.

[kexodusc]

The telling point might be that Sony is among the "evil movie studios" in addition to being a hardware maker like Panasonic, Denon, Pioneer, etc.

I'd still guess most are interested in stratification at this point in time, including the media producers who can still demand some premium for the Blu-Ray versions.

Or I could be wrong..


There's plenty of people with vested interest in BluRay, but I think we'll see it slowly take over from DVD in the next few years. I'm not sure the industry is propping up DVD for stratification as much as they are taking great care to maximize the profitability of DVD as part of its exit strategy, while simultaneously maximizing the profitabilty of BluRay in it's growth phase. Most of the BDA group have a vested interest in DVD as well, so they'll take great pains not to cannibalize DVD on the way out, and vice versa.

I can say anecdotedly that the local Blockbuster and Futurshops have been completely caught off guard by the stronger than anticipated demand for new releases on BluRay. When my little city can completely sell out of BluRay titles, that's a good sign.

Feanor, you could be right too, however. I'm not 100% sure what global demand for BluRay is, but I suspect outside of North America, Japan, and a few European countries, the market for DVD is much greater than it is for BluRay. What exactly is the market saturation of HDTV's in countries like Guatemala and Slovakia, anyway? If they don't have a capable HDTV, there's not much benefit to having a BluRay player, is there? But, as with many other products, the global demand might very well be 99.9% concentrated in 3 or 4 countries, making that point moot. I don't know to be honest.

As a niche product, BluRay is taking a funny approach though - prices are very mainstream friendly and the product is readily accessible - you usually don't get that in the audio/video world for "upmarket" products.

[Sir Terrence the Terrible]

Or I could be wrong..


There's plenty of people with vested interest in BluRay, but I think we'll see it slowly take over from DVD in the next few years. I'm not sure the industry is propping up DVD for stratification as much as they are taking great care to maximize the profitability of DVD as part of its exit strategy, while simultaneously maximizing the profitabilty of BluRay in it's growth phase. Most of the BDA group have a vested interest in DVD as well, so they'll take great pains not to cannibalize DVD on the way out, and vice versa.

This is excellent analysis, and dead accurate as well.

I can say anecdotedly that the local Blockbuster and Futurshops have been completely caught off guard by the stronger than anticipated demand for new releases on BluRay. When my little city can completely sell out of BluRay titles, that's a good sign.

And take that with Paramount sadly underestimating how many people would use BD-Live on Iron Man, and players in short supply, it looks like everyone is caught off guard by the stronger than anticipated sales of the player and discs. Two of my local best buys have had a very difficult time keeping players on the shelves.

Feanor, you could be right too, however. I'm not 100% sure what global demand for BluRay is, but I suspect outside of North America, Japan, and a few European countries, the market for DVD is much greater than it is for BluRay. What exactly is the market saturation of HDTV's in countries like Guatemala and Slovakia, anyway? If they don't have a capable HDTV, there's not much benefit to having a BluRay player, is there? But, as with many other products, the global demand might very well be 99.9% concentrated in 3 or 4 countries, making that point moot. I don't know to be honest.

You are right, the demand is in NA, Japan, and Europe. However its the volume of the demand that is startling. DVD still is in great demand all over the world, but both player and disc sales are falling, especially in NA, Japan and Europe. India and China are still big DVD markets.

As a niche product, BluRay is taking a funny approach though - prices are very mainstream friendly and the product is readily accessible - you usually don't get that in the audio/video world for "upmarket" products.

Fortunately Bluray passed being a niche product several million players ago. It has FAR outsold the last niche video product; the laserdisc about 6 million players ago.