OPINION: Two better than one?
By Paul Sweeting -- Video Business,04/20/2007
APRIL 20 | SONY PICTURES Home Entertainment released some data on Blu-ray and HD DVD software sales the other day, courtesy of Nielsen/VideoScan’s retail point-of-sale data collection system.
Paul Sweeting is editor of Content Agenda
Given studios’ typical reticence to release that sort of information, we can assume Sony felt the numbers tell a story it wants the world to hear, namely that Blu-ray releases are outselling HD DVD releases by a large and growing margin.
That would fit with the Blu-ray camp’s No. 1 talking point at the moment: The format war is over, and Blu-ray has won.
Indeed, of the Top 25 next-gen releases in 2007 through the middle of March, 23 were Blu-ray releases. The only straight-up HD DVD release to crack the Top 25 was Warner Home Video’s Batman Begins.
Yet it’s the one other HD DVD release to appear in the Top 25 that hints at the real story in the numbers, and it’s probably not the one Sony intended.
Warner’s The Departed was ranked No. 1 and No. 3 on Blu-ray and HD DVD, respectively. Combined, the sales to date of The Departed more than double sales of Sony’s Casino Royale, the biggest selling Blu-ray-only title to date. And Departed did it with $30 million less in domestic box-office behind it.
The Departed isn’t the only dual-format release to beat the best-selling single-format releases, either. Superman Returns, released in 2006 against a smaller hardware base, also outsold Casino Royale, according to sources familiar with the data. So did Happy Feet, released in March.
The point is not that two formats are better than one. Everyone unquestionably would be better off if either Blu-ray or HD DVD “won” the format war and there were only one high-def format.
But given the current market realities, the best high-def strategy for a studio is to release movies in both formats.
IT’S NOT HARD to understand why Sony is pushing the “Blu-ray has won” line.
But from the perspective of a studio without a direct financial stake in a particular format there’s no clear victor in sight.
Toshiba has dropped the price of its entry-level HD DVD player to $399 in anticipation of competition from low-priced players from China by the fourth quarter. And on Friday, a news report out of Asia indicated that Wal-Mart has placed orders for 2 million HD DVD players from Chinese manufacturers to be delivered this year with a target retail price of $299.
Sony said last month it would slash the price of its stand-alone Blu-ray player from $999 to $599 later this year. Last week, it confirmed it is eliminating the low-end PlayStation 3 model, which, among other things, will clear the field for stand-alone Blu-ray players from other manufacturers in the $500 to $600 price range.
Clearly, both of the principal format backers are committed to fighting it out at least through the fourth quarter of this year. As a practical matter, that means there will be product from both in the market through the end of the first quarter of 2008, no matter what happens over Christmas.
Samsung also plans to start shipping its dual-format player in time for the fourth quarter, which means it will still be selling it well into 2008.
Meanwhile, with Blu-ray embedded in PS3, the Blu-ray hardware base continues to grow inexorably, while Microsoft’s HD DVD add-on for the Xbox 360 continues handily to outsell any stand-alone player in either format.
At a minimum, the hardware format war will be with us for the next 12 to 18 months. Even if one side or the other were to stumble badly this fourth quarter, neither will vanish from the market until the middle of next year at the earliest.
In the face of those ground-level facts, it’s hard to see a basis for continuing to release movies only in one format.
At this point, a single-format strategy by any given studio is not affecting the course of the hardware format battle, which is moving under its own internal momentum.
The only measurable result—as the Sony data makes clear—is that single-format studios are leaving money on the table and getting nothing in return.
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| Submitted by: | Steven Burke 4/25/2007 9:13:54 AM PT |
| Location: | Canada |
| Occupation: | Labourer |
The Departed would have had to sell 119,360 copies in order to double the 21st 007 movie. It sold less that 85,000 copies. How do you deduce then that Departed sold more than double?
| Submitted by: | Steven Burke 4/25/2007 9:12:14 AM PT |
| Location: | Canada |
| Occupation: | Labourer |
How can I post anything when it says I can't include common terms?
| Submitted by: | Pierce Johnson 4/25/2007 8:21:47 AM PT |
| Location: | Maryland |
| Occupation: | Video Rental Owner |
Way to go Paul! The only way to truly determine a winner is to put things on an even keel. Placing movies on both formats will aid consumers in adopting the product. Right now many consumers are waiting it out because they want movie A (only on HD-DVD) and movie B (a BD only release). What are they to do? They continue to purchase the standard definition releases. If all movies were equally available then the consumers would be free to choose which format they feel is best. They would not be FORCED by SONY to go a particular way because of content. Here is a note to ALL studios, if you want to make the most money put out your discs on both formats. Consumers will respect you for respecting them and letting them choose. Right now they feel they are being dictated to go with something they may feel inferior because of the content available. A note for the HD-DVD camp, you are getting slaughtered in terms of content, open the flood gates and put some product out or you will be out.
| Submitted by: | Scott Humpert 4/25/2007 6:21:51 AM PT |
| Location: | Fort Worth, Texas |
| Occupation: | Engineer |
Paul, you should be ashamed of yourself... and you can feel bad all the way to the bank when you cash your check from Microsoft.
Now that the HD-DVD fanbois see that they can not beat down the behemouth that is BD, they are falling back from their position of dominance to a position of "why can't we all just get along". This is a falacy of the highest order. Sustaining dual formats doubles production costs (have to maintain two production lines) doubles retailer costs (have to finance twice as much unsold stock until it is sold), and will prevent the average user from adopting either format, instead wating for a clear winner.
The one thing sustaining two formats will surely do is postpone general adoption of a unified format long enough for Microsoft to perfect/implement download of HD content, a market which would be dominated by those "good" people in Redmond.
Articles like yours only serve to keep the spin of FUD (fear uncertainty and doubt) going. Shame on you!
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