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Blu-ray Movie Sales Are Not Taking Off Like a Rocket

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After winning the war for the dominant high definition format against Toshiba’s HD DVD format in February of 2008, many pundits expected Blu-ray players to take off like a rocket. After all, many had said that the main reasons for poor high definition player sales were uncertainty regarding which format, HD DVD or Blu-ray, would dominate in the long term. Also, high definition player prices were too high. Player prices needed to come down before sales would take off. The “experts” were wrong on both of these claims.

While there is some merit to both of these claims, neither was the primary reason regarding sluggish sales for Blu-ray movies. We have said it before and we will say it again: The primary issue with consumers is the cost of the Blu-ray movies, not the cost of the players.

Format wars are not just a recent event. Sony’s Betamax was the first consumer video tape format that was introduced in 1975. Its launch was followed by JVC’s VHS format in 1976. The first videotape format war was launched and even though the Betamax format was superior in many ways, it lost and VHS became the dominant format.

For those of you who do not remember or were not yet a living member of planet, VHS player prices were over $500 per unit for many years. I paid $600 for my first Mitsubishi VHS player, and that was not a top-of-the-line model. The same situation prevailed for DVD players. It did take a few years for DVD sales to ramp up, but the largest driver for the sales of both players and movies was the cost of the movies. People were spending $500+ for players and the market began growing fairly rapidly after the price for VHS movies became reasonable.

When VHS movies were first introduced, the price for a VHS movie was about $75. That is what launched and drove the tape rental market for many years, because people were not willing to spend $75 for a movie. VHS movie sales never took off until the price per movie dropped to under $20. At that price point movies were considered to be affordable and sales of VHS movies skyrocketed.

When DVDs were introduced around 1997, the price per movie was in the $40 to $50 range. It took a few years for DVD sales to grow. It was once again primarily a rental market until the price per movie dropped below $20. $20 seems to be the proven magic number where consumers feel that movies are a bargain and worth the price.

So why don’t the movie studios understand this? Today there is significant competition working against Blu-ray sales other than rental options from brick-and-mortar stores and online rental companies, such as Netflix and Blockbuster.

  1. Thus far only 1% of USA households own a high definition player. People are not likely to buy more players until they feel they can afford movies.
  2. There is an emerging VOD (video on demand) market being driven by Apple, Netflix and Amazon.com, where movies can be downloaded or viewed as streaming media. This technology may ultimately dominate the market and may eliminate the need for the Blu-ray DVD format altogether. Some industry analysts are currently saying the the Blu-ray format may only survive for 2 to 5 years. Once enough consumers have reliable broadband Internet access and the licensing and royalty issues are resolved with the movie studios, it could become far cheaper and more convenient to order whatever movie you wish to see whenever you wish to watch it.
  3. Sony and the Blu-ray developers appear focused on adding pretty much useless “bells and whistles” type features to Blu-ray, rather than focusing on fixing the current issues with many Blu-ray players and disks. Blu-ray technology continues to evolve, which is why firmware is upgradeable on Blu-ray players. Nonetheless, numerous incompatibility problems are emerging with some players that have a difficult time playing the latest Blu-ray movies without a glitch. We see emerging features such as BD Live, which allows users to set up Internet chats and access additional movie information online while viewing a movie to be nothing more than fluff that adds cost. Hellooooo! Focus on fixing the problems rather than adding features to justify the high cost.
  4. Sony’s relatively inexpensive (~$400) PlayStation 3 game console already includes a Blu-ray player that does a pretty good job when connected to an HDTV. Sony expects to sell 10 million PlayStation 3 units in 2008. While the PlayStation 3 was a primary factor in Sony’s conquest in the HD format war with Toshiba, it should have also been a major factor in driving Blu-ray movie sales.
  5. Many surveys indicate that most consumers feel that the standard DVD format is “good enough”. Add that to the fact that all current Blu-ray players upconvert standard DVDs to near high definition quality and you have another reason for not paying a premium price for a Blu-ray movie.
  6. The current economic situation will stifle sales further. Most consumers will not pay a premium price for any technology that does not offer a significant advantage. If most consumers feel that standard DVDs are good enough, then it is hard to justify paying a premium price.

So where does this leave Sony and Blu-ray? Sony is already downgrading their sales forecasts for Blu-ray movies. This could easily be turned around if the price for Blu-ray movies is lowered blow the proven $20 threshold.

There is a little more to the price issue than simply Hollywood and Sony greed. Blu-ray manufacturing technology is significantly different that standard DVD technology, which required the building of new manufacturing facilities and a lot of additional up-front expense. Nonetheless, the street prices must come down before Blu-ray movie sales will take off. If Sony does not find a way to do this soon, the technology may be swept aside in favor of VOD or another technology yet to emerge.

Comments

  1. I totally agree with what you said.
    Right now the price of Blu-Ray Disc is absurd and consumers must co-operate and pass the correct signal that no one is going to buy the Blu-ray disc movie when it is so expensively priced.
    For the time being i am satisfied with my DVD Home Theatre system that does a reasonably good job at upscaling the DVD disc and me and my family enjoy watching DVD movies and when we like to collect them we buy and treasure movies like “Transformers”, “Spider Man”, “Matrix”, etc. We buy these DVD’s because they are affordably priced.
    So for a long time, i am just going to stick with DVD’s and wait till the price of Blu-rays come down to earth before considering switching to Blu-ray.

    Thank you for your informative article and
    You have a nice day!

    George Martin

  2. I don’t find the BluRay discs to be that much better than a regular DVD. Your article is right on point too… bring down the price and people will change format. The publishers are greedy as usual.

  3. I’d be more than willing to buy Bluray movies, even with the prices at their current level. (allthough I also think they’re way overpriced) However, there’s only been a few of my purchases that satisfied me. There’s a lot of Bluray movies on the market that are simply DVD quality on a Bluray disc. Big disappointment when you’d expect High Def… I had started to replace some of my favorite DVD’s, because I would have loved to see them in HD. I stopped after the first few disappointments. Getting the same results with some new movies now makes me weary to buy any Bluray disc.

    In short: the producers did it to themselfs… In their eagerness to get as many movies out there as possible they undermined the sense of quality about Bluray. It seems to be no more than a new medium, for the same old same old… At least that’s how I experience it.

    Martin

  4. Its useless to purchase blu-ray disc of movies that were made before 2002. If they were not shot in hi-def they cant really be made hi def.

  5. I just purchased a B-ray player the BD prices are out of control! Honestly I buy used BD I have an HD DVD player THe prices are good w/them now being obsolete and all but i will continue to buy HD DVD I rather spend cheap on HD DVD disc than wait for it to come out on BD and pay double triple the price.

    And to ppl that think there is no difference, BIG difference!!! Especially while viewing on a 100′ screen, But HD @ any size is fantastic! But they must come down in price. THanx for this site.

  6. Toshiba’s format hd-dvd would of been the best hd format if it had won out on the format war.
    A. it was regionally uncoded
    b. it was cheaper to make disc’s and players
    c. disc’s and players would then be cheaper to the public
    d. it used a better compression system
    e. it had none of this upgrade/edition nonsense.
    Sony just wanted to bully there way into finally winning a format war and they have come unstuck, the ps3 is a flop and blu ray will die as streaming hd films will now take over as well as dvd upscaler’s that do quite a good job for a hell of a cheaper price.
    And i’m not anti sony, i happen to be a broadcast engineer that see this a long time ago.
    Sony should of accepted hd-dvd when it was first accepted by the dvd forum instead there greed has persited.

  7. I won’t deny that Blu-Ray can give you higher quality images.

    Blu-Ray quality, even at its best, isn’t a whole lot better than an Upscaled DVD. And then there’s the fact that no movies shot before 2002 will have been shot in HD anyway – and not all of them after that. Your choice is drastically reduced – as is the range of movies Sony will be able to sell.

    Prices are too high, and while I can see them coming down, I can’t see them coming lower than DVDs are now. So even when Blu-Ray DOES come down it will still have to fight the lower prices of DVD. It’s not just a battle against regular DVDs either – Blu-Ray also needs to win against Upscaling, which is considerably less. When I replaced my broken DVD player, I did so with an Upscaler. Nobody who has decided that upscaling is enough for them will care to go for Blu-Ray.

    It’s not about comparing frozen screens. It’s about comparing playing movies with sound.

    It’s not about the quality of the picture. It’s about all the nasty little restrictions that Sony has added to their Blu-Ray discs and players for no reason other than the Purpose Of Making Money.

    It’s not about comparing the price of a DVD player vs a Blu-Ray player. It’s about comparing the price of an Upscaling DVD player vs the price of a Blu-Ray player, new discs, a 40 inch HDTV, and a new sound system.

    It’s not about sales of players. It’s about sales of movies – you only buy one player, but you buy many, many movies. The PS3 won the first format battle for Sony, but it’s unlikely to win the war.

    Eventually something will come along that will replace both DVDs and Upscaling-DVDs. But it is unlikely to be Blu-Ray.

  8. It looks like the next wave will be downloadable movies, but poor bandwidth and bandwidth restrictions current limits the ability of most Internet connections to download streaming audio and video in high defintion without any problems.

    Several companies, including Netflix, already offer streaming media players for watching movies, but good quality high definition is not yet available. If Internet connectons can be improved, Blu-ray discs could fall by the wayside.

  9. I have ONE DVD Upscaler. It cost me £70. I have ONE HDTV 23″. It cost £150. I have over 350 DVDs, at an average of, lets say £10 each. YOU do the math on what REALLY makes the money for the media companies.

    Also, Sony hasn’t even finished developing the Blu-Ray player yet. I’ve heard stories about people wanting to watch a quick movie but first having to get the upgrades – which are usually a load of bells and whistles with nothing to do with watching movies. Or even being interrupted in the middle of a movie with a demand to upgrade. Why should I buy a player that hasn’t even finished development yet?

    Range of movies is another issue. New movies are coming out on Blu-Ray. But I don’t see box sets of TV shows coming out for them. And the reason for that is the Blu-Ray’s loading time. You can’t just sit down and watch a 20 minute episode of The Simpsons on Blu-Ray; you’d have to wait 5 minutes to get to the title screen. Even if you didn’t have to spend 10 minutes with its upgrades.

    And that’s a matter of even if TV box sets started coming out on Blu-Ray. With the disks at current prices, they just wouldn’t sell. A box set of a season of The Simpsons is about £40 in shops (without discounts). Will you really feel like paying about £80 for it?

    Sure, you can get Blu-Ray a lot cheaper on places like Amazon now. But they’re still not cheaper than DVDs on Amazon. And they still lack the same choice.

  10. This is the way I see it. This is NOT a repeat of VHS to DVD. When we went through that change, we had old VHS tapes of films that were wearing out anyway. So, it made sense to replace it with dvd. (Something that wouldn’t have to be replaced again.) To this day, I am still replacing some of my VHS tapes with DVD. But this Blu Ray thing is totally different. (And not for the better!) The slightly better picture is not worth paying twice as much for the film. It’s certainly not worth buying a whole new tv for. And add to that, people who have blu ray are complaining about the fact that blu ray to go through a registration process which is long and annoying.

    I don’t see Blu Ray pushing out DVD. And I do feel consumers are starting to resent how the industry keeps wanting them to buy the same film over and over on a different format.

    Oh wait, and there are choices! A DVD Upgrader eliminates all these problems and gives better quality. And we have the choice of streaming now! Granted, some people prefer a physical media. But dvd is good enough for most people. In my opinion, the best blu ray can do now is hope for a small percentage of users. (And it will probably do a lot worse!)

  11. Hi Wade

    This is a very old post from 2008. Today, Blu-ray sales are taking off and DVD sales are dying. It is not the industry that is forcing that. It is choices being made by consumers. Like I said in 2008, when the prices for Blu-ray players get reasonable and the cost for movies dips below $20, people will start buying. The same thing happened with VHS tapes and DVDs.

    You make a good point about the industry repeatedly changing formats and phasing out the old ones, but that is the way that all technology works. DVDs are far superior to VHS tapes in quality, durability and longevity. Blu-ray simply improves the visual quality of DVDs. A better mouse trap will always come along and take over the market.

    The upscaling feature in all Blu-ray players does do a good job of improving the quality. We still buy DVDs for most movies, but we buy Blu-ray for the action movies where the quality does make a difference. In perhaps 2 years DVDs will be obsolete and something better will come along that will start to replace Blu-ray. It is called evolution.

  12. Hi Doogie. Well, wherever I shop, it seems Blu Ray stock has shrunk since the year before. In my opinion, it doesn’t even make sense to go Blu Ray and pay not only twice as much for the film, but wonder if it’s even out on Blu Ray. Even if I were that fussy about my films (which I’m not) but if I were, I would just buy a $70. upgrader and avoid this Blu Ray nonsense.

    By the confession of Blu Ray owners, it doesn’t even make sense to look for a Blu Ray version of something that was made before 2002. (Since anything before 2002 wasn’t shot in 3d.)

    + Why would I want to buy a twice as expensive disc that won’t play on my computers?

    It’s not just about quality. We know DVD was very consumer friendly. The question is: “Does Blu Ray satisfy the need of the customer, or does it create problems for the customer?”

    In my opinion, it creates problems. And like many other consumers, I’m starting to resent the industry expecting us to buy our films over each time a new format comes out.

    But I’ll be fair. You want me to upgrade? Then have your format SOLVE problems. NOT create them. Offer me a good reason to upgrade. Is your product less expensive? Is it more convenient?

    Blu Ray can fall to the gutter, and that’s fine with me. DVD is good enough. Maybe I will look into streaming. But Blu Ray is an in-between and un-needed format, that will probably be passed over. All data says people are going right from DVD to Streaming.

    The industry of course expects us to stop at every step. But why should we stop at Blu Ray when streaming is already the next big thing?

  13. Hi Wade

    I’m not sure where you live, but the statistics are saying the Blu-ray is finally taking over. The retailers and studios may be pushing that, because when I go to Best Buy or another major store., there are now 1 or 2 isles of DVDs and about 5 to 10 for Blu-ray.

    No one says that you have to upgrade. I’m not dumping my DVD collection, but when a new movie comes out that I like, I look for a Blu-ray price under $20. Blu-ray players do improve the visual quality of DVDs, and the players are currently very cheap. Whether you use Blu-ray or not, it can be worthwhile to upgrade your player. Standard DVDs work with all Blu-ray players and the quality is improved due to upscaling.

    There actually were several movies shot in 3D going all the way back to the 1950s, but the new Blu-ray 3D standard has only been out for about 2 years. Prior to this you had to wear colored glasses and the 3D effects were not very good.

    It is expensive to upgrade to the current 3D standard and it is not doing very well with consumers because of this. I do think it was a dumb move on the part of the manufacturers to require consumers to buy an entirely new system just to watch Blu-ray 3D movies.

  14. From what I’ve seen Blu Ray is disappearing. I’m seeing less and less of it, and good riddance.

    Blu Ray is a corrupt scam. When PS 3 came out, it was backwards compatible. But when people continued to buy PS 2 games, SONY got dirty and stopped making PS 3 backwards compatible. Right now Nintendo and X BOX have kicked PS 3 down. Good for Nintendo and X BOX.

    The biggest store I know of has less than 1/10 dedicated to Blu Ray. Not exactly a big thing.

    Sony is so corrupt that they would gladly stop making Blu Ray backwards compatible.

    Even people who have Blu Ray aren’t happy witgh it.

    Micro Soft and Apple refuse to back Blu Ray and I take my hat off to them.

    True, Blu Ray had a brief spurt in 2010, but it has been losing its way since. DVD lost about a 3rd of its sales and Blu Ray (which didn’t have much room to fall) lost 40 %.

    Why? Streaming is taking over.

    SONY and Blu Ray can both fall to the gutter, and that’s fine with me.