Lee Dunbar

Feb

22

With Toshiba bowing out of the battle between their HD DVD technology and Sony’s Blu-ray machine, I have read many articles declaring an outright victory for Sony. I can’t agree.

While on the surface it may look like Sony, backed by the majority of major studios, was victorious when they finally piled so high on Toshiba’s aspirations that they finally turned with tail between legs and ran for cover – to do so would be forgetting two other major sources of competition for the $400+ Blu-ray players.

First, with blazing high speed connections reaching ubiquity in North America, downloading movies (legally) will become the norm. As people become more comfortable with the idea of hooking their media PCs to their 46″ LCD screens and DVD/Hard Drive players are network enabled, this will take a good chunk of the market – especially once some of the larger distributors like Apple jump on the scene. Cable and satellite distributors have made on-demand movie rentals as easy as selecting a movie and punching in a password – all right from the comfort of your couch. HD pay-per-view movies are already available and I wouldn’t think that HD on-demand is that far behind. But I still don’t see this as the largest competition for Blu-ray.

The second, and deepest entrenched front I see in the HD market, is against upconverting 1080i and 1080p DVD players. I foresee that a large part of the market will not be able to justify dropping another $400 or more on a player when they are already getting a pretty damn good picture with their current DVD player. Apathy and inertia are a marketer’s two most dangerous foes – and I see this to be the largest potential stumbling block for the Blu-ray.

So in effect, what we have is a situation where the true bleeding edge crowd will likely jump into the virtual/download space while the mass market will likely be quite happy keeping their current upconverting DVD player until they need to upgrade it – and by then they might just go directly to the hard drive or PC model.

Somewhere in the middle is the market that is left for the Blu-ray. Unfortunately, the HD war took so long that many people were turned off buying a player until one format took hold. A large portion of the window for the HD technology was missed as was opportunity to really market these players to the hoards of consumers drooling at the mere thought of picking up a nice HD player to hook to their new HDTV.

The people who have already bought their big screen are seeing pretty good results with the upconverting DVD players, and the techies are already seeing how close the next wave is coming over the hill.

The war isn’t over for the Blu-ray – just one battle has been won. The war for consumer dollars is still very much in play, and I would think the next battle will be even harder to win.

The Blu-ray does have a couple things going for it, and a couple potential strategies.

For $400, the Play Station 3 will play Blu-ray disks, (the optional $25 remote would be a good idea), and you get to play games with smokin’ hot graphics too!

If they are smart, the studios will provide content exclusively on the Blu-ray versions of their releases – and what about adding downloadable versions for the iPod or PSP – it’s all about the added value.

And the best market is obviously the thousands of consumers who have been chomping at the bit waiting for the HD war to end. I would suspect that their will be an initial ‘blip’ in sales and then again at Christmas (when prices are reportedly going to go down) – gotta love the low-hanging fruit.

Tags: Business Stuff, Experience Design Stuff, Marketing Stuff, Retail Stuff, Technology Stuff

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