1.Nobody likes false starts
With the debut of HD DVD at an underwhelming 720p/1080i, coupled with a buggy interface and a transport that makes boiling water seem like a speedy event, the entrance of high definition DVD into the mainstream came out of the starting gate lame and hobbled. For Toshiba to release a player that didn’t support true HD at 1080p (even though the software does), and with no lossless audio format to accompany the video track, the high definition wave was more of a ripple. Add to this the delay of HDMI 1.3, lack of market penetration and supply, and a dearth amount of software titles and you have a very unimpressive product launch.
2.Format Wars Don’t Sell Players
The only reason Sony’s Playstation, Microsoft’s Xbox and the Nintendo GameCube can sell so well simultaneously is because of the prevalence of excellent software titles. People want to buy the hardware just so they can play the software. This is not a format war – it is choice, just like Chevy and Ford (and just like the gaming systems, some people have one of each). The high definition DVD formats, however are really just the same source material packaged in two different wrappers- not to provide choice, mind you, but because the two camps simply are too greedy to combine forces, and not innovative enough to drive two truly separate products successfully. Take careful note – a format war is NOT competition, it is a hindrance and the bane of high definition DVDs.
3.HD DVD and Blu-ray are NOT Quantum Leaps in Technology
Consumers came over in droves when CDs were released back in 1982. The new format offered not only a new digital media, but also a way to instantly access tracks across an entire “album”. Convenience, not technology, drove this format to almost instant consumer adoption. Fast forward a bit to 1997 when the first DVD player was released. Again, convenience, not technology, drove people to the market en masse. Unlike VHS tapes, the new DVD format was smaller, easily navigated and would not wear down over time like existing tape-based formats. Heck, the concept of a shiny plastic disc was new – and quite frankly, it was the coolest thing to hit the technological shelf since solid state technology. In comparison, the high definition DVD formats, save the color of the business side of the disc, look exactly the same… and consumer confusion will surely follow.
What do the new high definition DVD formats offer consumers over DVD? Technology and more storage. Is this enough? Not on your life. Consumers, most of whom rarely know how to properly configure their players or home theater systems, are perfectly content with their current DVD players (and indeed some have just jumped on board to DVD in the last several years). While the potential for more extras and alternate endings exists due to increased storage on the new media, there is no compelling reason for consumers to migrate over to the new high definition DVD formats in large numbers.
4.Studios are Conservative, Greedy and Unmotivated
Studios are so conservative in their practices as to consistently miss out on market advances – even those that can make them money (ie. Why is a computer company running the world’s most successful online music store?) The studios are not jumping on board the high definition DVD bandwagon just yet – and you can see the lack of titles to prove it. If the movie studios decided that HD DVD or Blu-ray (or both) was to be the next dominant format, it need only to flood the market with software titles and present a plan to roll back on DVD production over the next 10 years. Even though this would grant them the secure format that they seem to want (HD DVDs and Blu-ray discs promise to be much harder to rip or duplicate) there is no indication in the industry that this is taking place or even in the works. The studios are making money hand over fist with DVD they cannot seem to bring themselves to seriously initiate a new, unproven technology – even if it saves them from some other copyright headaches.
Add to this the fact that new titles are coming out at $30 a pop (and this down from an initial $35/title) and you have a really hard sell for consumers who are used to $15 titles at Wal-mart and the large electronics chains.
5.Playstation3 Cannot Save the World
We have consistently heard it said that the Playstation3 will “jump start” the market by flooding it with millions of gaming systems capable of handling Blu-ray Disc software. The problem with this theory is that the PS3 is not being marketed as a home theater component and, if current installations prove the rule, most will not be situated in the average consumer’s living room. The result is that the PS3 will primarily be a *gasp* gaming system. Maybe I have a more traditional group of parents in my association of friends, but, taking into account #4 above, I do not think that Blu-ray will make any major leaps forward in market penetration as a home video format – at least not anytime soon.
History is bearing this out, as the HTPC market, though driven hard by such manufacturers as Microsoft, Dell and HP, has struggled to find a place in the living room. Nearly every gaming system of the past: PS2, Xbox, and even the legendary 3DO system have been touted as “set-top boxes” but in reality find themselves situated in more “gaming-centric” environments playing… you guessed it, games.
6.Those Who Ignore History…
For years we’ve heard about the evils of MP3 and illegal downloading. All the while the RIAA and music industry had two formats that could have prevented any illegal copying – at least for all but the most dedicated crackers: DVD-Audio and SACD. These formats proved to be higher quality than CD, presented much enhanced copy protection schemes and were easily used as alternative formats to CD. Yet both formats failed miserably to achieve any significant market penetration. Why? Without an artificial “shove” from the record industry – which never materialized – technology alone is never enough to push a new format into the hands of consumers. In terms of convenience and ease of use, DVD-Audio and SACD offered nothing to consumers. In fact, they made listening to music more complex, since most hardware was unable to correctly decode and provide adequate bass management for the new formats.
Could these formats have succeeded? Absolutely. If the recording industry had presented a plan to phase out CDs and the “format war” had been avoided (simply by the industry picking one format over the other) we would all be using DVD-Audio players and illegal downloadable music would be mostly confined to analogue rips or older music. Is this a stretch? Perhaps, but only because history shows us that corporate greed causes most companies to miss the long term economical gains over a short term loss of licensing revenues.
7.People Want Technology that’s 15 Minutes Ahead of Its Time
For many people, getting into HDTV is all about the widescreen and being able to see their DVDs with more clarity than ever before. When Billy Bob comes home with his new high definition 720p display, the difference between that and his older SD TV is amazing – at least when he’s watching DVDs. You see, that’s the problem – and it’s two-fold. While most consumers are still getting into the HDTV craze, they’re already impressed. And the difference between SD TV and HDTV is more amazing than the difference between 480p DVDs and 1080i downrezzed high definition discs.
The other side of the coin is the lack of HD content available on TV – and this is a biggie. While Billy Bob is impressed by his DVD player, he is dumbfounded by his cable TV – which actually looks worse than it did on his old set (mostly because it’s bigger). You see, nobody told Billy Bob that he’d have to get an antenna or subscribe to HD service from his cable/satellite provider. He was also not told that most of his favorite shows (Billy likes sitcoms and the Sci-Fi Channel) aren’t yet available in HD, regardless of technology or service provider. As a result, many Americans are underwhelmed or feel like they got burned by HDTV. The last thing they’re going to do is rush out and buy the next greatest thing.
8.Enthusiasts Are Getting Tired (and Smarter)
While some home theater audio- and videophiles have the money and inclination to rush out and buy the latest and greatest toys as soon as they are available, many more are becoming more cautious. Burned by 8-track, laserdisc, SACD, and DVD-Audio (and possibly soon non-HDCP HDTV) – these war-weary consumers are going to think long and hard before jumping onto any new technological bandwagons. This leaves a shrunken market of even the bleeding-edge consumers, and that means even less sales to early-adopters.
9.A Skeptical News Media Doesn’t Help
I’ll admit it, we’re part of the “problem” (though I’d like to think we’re saving consumers from making the next big mistake). An increasingly skeptical news media isn’t buying into the hype of HD DVD and Blu-ray, especially not after wasting millions of editorial words on DVD-Audio and SACD, only to watch the software and technology dwindle into obscurity. Even after almost 6 years, most consumers continue to proffer puzzled looks when these audio formats are mentioned. The new DVD formats are getting plenty of press, mind you, but with the Toshiba flop and lack of software, the fact that the Emperor has no clothes (at least not yet) is hard to avoid.
10.Broadband and IPTV to Compete?
With Verizon, AOL, Time Warner and others jumping to provide HD on-demand services for the consumer it is a very likely event that high definition DVD will be something that isn’t relevant in a service-directed marketplace. Add to this Apple Computer’s recent push for video downloads and we may find that consumers are far more interested in quantity, portability, and ease of use over high quality source material. Even with respect to high definition formats, downloadable files burned to consumer-supplied media may make data high definition DVDs more significant than the retail formats. This consumer model is being readied for testing in South Carolina’s head-end for Time Warner Cable this year.
