Study finds high prices, hamstrung players limiting Blu-ray's dominance
by Darren Murph, posted Apr 29th 2008 at 5:52PM
ABI Research has just confirmed feelings that
we've had for months: Blu-ray just isn't going to
dominate the market until
prices sink down from the stratosphere and players emerge that are fully-featured. A new study from the previously mentioned firm has suggested that we still have "12 to 18 months" before the BD market really kicks into gear, and it specifies that "fully-featured" decks need to come in at $200 or below before the general public will consider coughing up the cash required to make the jump to high-definition media. It's also noted that many are perfectly satisfied with the quality of DVD, and until prices make it manageable to switch, the outfit feels that huge chunks of consumers will simply stay put. Additionally, we're told that PS3s will "make up over 85-percent of the BD players in the field" during 2008, and we won't see Sony's console fall from the top until 2013 when the installed base of standalone decks / PC-based BD players overtake the installed base of PlayStation 3s. Yeah, you're
hearing echoes on that last tidbit.
[Image courtesy of
LA Times]
Filed under: Industry, Blu-ray, Players
Tags: abi research, AbiResearch, adoption, bd live, bd-live, BdLive, data, high prices, HighPrices, interactive, interactivity, market share, MarketShare, pricing, research, study, survey
Reader Comments (Page 1 of 2)
jlmcp @ Apr 29th 2008 5:56PM
Why is it that HD DVD lost again?
Jimmy @ Apr 29th 2008 8:31PM
The honest answer is that HD DVD lost because Toshiba ran all of the profit out of the technology. There was no reason for any CE company to make HD DVD because they could not make a profit.
In the aftermath of HD DVD's demise, Toshiba's own financial reports show this to be the case. The Nikkei reported that Toshiba's losses on HD DVD totaled $982 million USD in just 2007. That is a loss of over $100 per HD DVD player sold.
Blu-ray devices are expensive but every Blu-ray stand alone device is being sold at a profit. The exception is the PS3 which is a gaming console. And this is the third generation in a row that Sony has sold the Playstation as a loss leader.
When it comes down to it Toshiba backed themselves into a corner. They subsidized the cost of the hardware with no real plan to recoup that money. Movie studios did not want to move to a hardware platform that was essentially a monopoly. Hardware makers did not want to manufacture players that would have to be sold at a loss.
why not the LS2LS7? @ Apr 29th 2008 9:46PM
HD-DVD lost because there was only one hardware manufacturer and there could only be one hardware manufacturer. Toshiba was taking a huge loss on each player sold, which was bad for them, but also made it impossible for any other manufacturer to come in and make money selling players either.
HD-DVD didn't lose, it was never in the running.
Doc @ Apr 29th 2008 11:34PM
HD-DVD lost because of toshiba IMO, and they can only blame themselves for it. They like other's here have pointed out by their own fault only made the players themselves, very bad move if your goal(which it should be in the first case) is market penetration. I think that everyone here understand in fine details about these HD formats, bit rates, resolutions, ect.., but joe 6-pack doesn't and the thing that toshiba didn't do or take advantage of was informing potential buyers what was so special about these new disks.
Sony is at least talking about resolution factor, but with upscaling dvd players out there joe 6-pack takes one look at juno on dvd then laughs when he see that the HD version is $34. One thing that I'm not sure of , but think I remember hearing is if sony takes a royalty on every blu-ray and if so what the damages are for studios? I wonder if that makes any difference on the price?
Nfinity @ Apr 29th 2008 6:10PM
And understanding of market economy shows us that prices can't fall if you have limited production.
This is obviously no shocker. Sony and BDA is doing exactly the same thing they did with movies on PSPs, which was ultimate failure.
Again, one more proof that Blu-Ray, unlike HD DVD, wasn't consumer choice.
Well I guess, by 2010 all these HD digital distribution venues will be flawless thus making Blu-Ray a dud anyways.
joe @ Apr 29th 2008 9:10PM
Nfinity- I think that there are still some pretty sever challenges for BD bit this is totally different than the psp model.
First of all there are many players by many makers. Right now Sony dominates the market but they don't own it.
Psp movies required that you view them on a psp. Initially you could only view them on a 3" screen. That is a big limitation.
Sony worked hard to get Hollywood on board with BD. The psp only took Sony movies. BD players work with anyones movies.
HD-DVD for all it's supporters wasn't able to hit mass market even with vastly lower prices.
Sony seems to have done the market research right. Gamers drove HD-TV adoption. They also rate highly on media purchases. The mass market wasn't and still isn't ready to adopt HD movies at any price.
BD has time to get ready. I've seen less than $250 BD players and most movies cost me around 20$.
That is pretty comparable to the price I paid for my first dvd player but BDs are less than I paid for dvds in 1999. Comparably BD is costing me less than DVD's when I factor in inflation.
Even if there was a perfect mode of digital distribution today it would take years to catch on. BD is doing just fine for now.
Wait for Christmas 08 and the DTV switchover in 09 for the real indication of BD success.
EQC @ Apr 29th 2008 9:07PM
Nfinity: HD digital distribution has many hoops to jump through before it can take over anything.
1) Price: the majority of people don't want to pay full price for a non-physical copy. That's just silly. The requirement for a lower price is made stronger by the next two points: quality and DRM.
2) Quality/Bandwidth: these two go together. People need a fat internet pipe to download lots of HD-quality video. The US still sucks for real broadband penetration and speeds. So, *legal* HD-downloads will likely be lower-quality for quite some time until bandwidth is easily available and cheap. Why would anybody want to spend $100/month for top-notch internet and $25 per lower-quality movie when they could just buy the true 1080p movie for $25 at the local store?
3) DRM must be gotten rid of. There have been enough situations already in which DRM'ed music has been killed because somebody decided to turn off the servers that validate the DRM. Even big companies like Microsoft, apparently, aren't reliable enough to let DRM'ed purchases actually be purchases. If I'm spending $25 on a movie, I want to know its mine forever. With a disk, that's guaranteed as long as I don't lose it...with DRM'ed electronic copies, there is no guarantee of anything.
4) Multi-device friendliness: They need to make it fast and easy for me to take a downloaded copy and play it on my computer, in my living room home theater, on my bedroom TV, etc. Disks do that now. Downloads do not unless you're significantly tech-savvy and willing to break some rules.
h0mi @ Apr 29th 2008 9:35PM
Your PSP reference ignores 1 major issue that UMD had. Well, 2 really.
1- The UMD was worthless since a consumer was limited just to using it on a PSP that could not (then) output to a TV.
2- The ability to rip DVDs onto UMD discs and convert other video sources into PSP friendly formats without the need for (at the time, relatively) difficult homebrew methods.
UMDs don't offer any value over DVD when priced the same (and UMDs usually were $10+ more). At $5? The UMDs sold and were pretty nice to pick up, even if you could find a DVD for $10 or less.
worldbfree4me @ Apr 29th 2008 11:57PM
This is all hogwash really, because down on main street where I live with about 2OO+ Million other people, HD anything is just not in the cards. Most of the people I know that have an XBox or PS3 use a normal SD set for the display. Sure, they would love to own an HD set or player, but at what cost? $300-$400 for the set, $50-$100 for the player and $5-$10 for the media? And by then the next gen hardware will already be here and priced accordingly. As far as digital downloads go, the Cable and Sat providers will be Trojan horse that makes this so called fantasy a reality in the near future as mass adaptation to digital set top boxes that is being spear headed by your Uncle Sam as a way to make my Grand Ma and Pa get rid of there 20 inch floor model that was built to last 20+ years, so they say, will already be in place by the time the technology matures. And if one can simply stream or download an actual copy of HD/SD content for a reasonable price from there local media provider or cop it over the air legally or illegally, then this I believe will be the catalyst that will slowly began to displace both the stand alone player and disc as the media of choice in our homes as there will be no need to own these extra pieces of soon to be obsolete hardware. If this was true for games currently, I would would definitely sign up as a customer. Imagine if you could simply log on at a connected Home or Hotel, PC or TV and play any game you want for a monthly fee. It may happen my friends, because I am probably not alone when I say that I am sick of accumulating obsolete media hardware...ie Video Game Player, Video Movie Player, or any other so called Multi Media Player at unreasonable prices. $10-$50 monthly for indefinitely instead of $700 here, $500 there, would save me and the planet a lot of space and clutter!
Vcize @ Apr 29th 2008 6:32PM
As I've said all along. The prices will drop into a reasonable range *IF* Blu-ray catches on, not *WHEN* Blu-ray catches on as all the overly arrogant fanboys and Sony execs seem to be imagining.
So let's get those prices down and put DVD out of it's misery already.
why not the LS2LS7? @ Apr 29th 2008 9:50PM
Adoption is not the barrier to prices coming down. It's the huge amount of hardware in a player. Thanks to the lead from HD-DVD, you have to have two HD video decoders in there just for starters.
Player prices will come down as the chips which can perform the functions necessary in a BluRay player become less exotic. This will come as designs mature and as the reduction in process feature size (65mn, etc.) makes the chips smaller and thus cheaper.
madgamer @ Apr 29th 2008 6:36PM
I would certainly buy more movies if they were 20-25$ instead of 35$. I think that this is easily as big of an obstacle as the player prices for adoption.
Mr. E @ Apr 29th 2008 7:55PM
Almost every BD is under $25 at Amazon. The exception are Fox with their insistence on a $39.99 MSRP across the board. They generally come in at $27.99 on Amazon. I personally draw the line at around $22, unless it's something I *really* want to get.
Kumar @ Apr 30th 2008 9:08AM
I love (read: am always annoyed by) the excuse 'it's cheaper on Amazon'. It was used by the HD camp for the combo discs and now being used here to justify high BD prices. You have to remember that most people still go B&Ms for their purchases. I'm sure you'll find a nice correlation of early adopters also shopping on amazon, but just about everyone else checks the Sunday ads to see how much they have to pay for discs.
Achilles @ Apr 29th 2008 6:38PM
I've said this from the beginning and I get yelled at!!! lol
Hopefully, BluRay (and their manufacturers will get the memo and address this)
Let's not forget, studio's releasing crappy movies in BR are not helping the issue....
Franssu @ Apr 30th 2008 9:39AM
Amen to that. I still buy more HD DVDs than Blu-rays, even if there are so much more blue boxes than red ones in shops right now... So much overpriced crap is sold in blue boxes right now. Yes, Disney and Fox, I'm looking at you.
And 30$+ for a HD disc ? Gimme a fracking break.
Darth_Tubbie @ Apr 29th 2008 6:48PM
This is pretty much a common sense find. Pricing has always been a factor in newly introduced consumer electronics. It has already been demonstrated on the PS3 vs the Wii battle front.
Nfinity @ Apr 29th 2008 7:13PM
Well not really..
Sony and Blu-Ray fanboys have been screaming how pricing isn't really an issue at all since the competition and current pricing will be ok, since it worked for DVD.
We've heard this logic so many times, that obviously never had any connection to reality.
A perfect example of what the outcome for Blu-Ray might be is PSP movies. It was expensive, the device was expensive (the choice of movies was so so, but it had movies) and it failed miserably.
The real question that a logical and normal person would pose at this moment is, why was it allowed for HD DVD to be killed then? If Blu-Ray is supposed to be starting it's REAL life in 12-18 months (read 2 years) why did everyone so anxiously wanted HD DVD destroyed that had everything a year a half ago.
When you answer this objectively you will understand why Blu-Ray will be eventually a failure if they don't drop prices quite a bit.
XDragon @ Apr 29th 2008 8:13PM
People wanted 1 format because having a choice was preventing either from progressing.
As for pricing, things will need to improve for Blu to be more widely purchased but for now, there are plenty of PS3 owners to keep it going even if its slower than people would like.
joe @ Apr 29th 2008 9:11PM
Nfinity-
While it will take years for BD to hit true mass market there is still a lot of money to me made in the run-up.
It was essential for the format war to be decided so that a format had the chance to be mass market. The movie studios had vested interests in making sure that the product they sell gets the most margins.
Having to make a DVD,HD-DVD and BD product available was expensive. The disks are cheap but then you have online features to serve,packaging, store space and promotion. It also required Hollywood to make future predictions on the popularity of a movie and the popularity of the format. So not only would they need to figure out how many copies of I Am Legend would sell but how many HD-DVD vs BDs
The stakes for picking the wrong side in a protracted format war could have realistically meant closing a studio.
The consumers weren't ready but Hollywood found it long overdue,except for the few players that held out for cash.
If Toshiba could have done a better job with the movie studios they would have won.
XDragon @ Apr 29th 2008 7:00PM
Did someone get paid for this research?
All I have to say is duh, no kidding, etc.
This is what everyone already knows and some loser got paid for stating the obvious.
Also, it says 6 comments and I see zero so E-HD, you still suck at posting within a reasonable time.
Anthony Pivac @ Apr 29th 2008 7:20PM
Didn't Toshiba/ HD DVD have sub $200 players....
wysiwyg @ Apr 29th 2008 9:02PM
Yea...this means that even at sub-$200, it's not low enough for blu-ray players to reach mass adoption. it's gotta be sub-$100 in this economical recession time.
DenverBob @ Apr 29th 2008 7:20PM
One would think that the MBAs would have heard of price elasticity of demand. Then again, I never met an MBA that knew much of anything about micro economics (or macro, for that matter).
Leave it to a sociologist to know these things.
Actually, I'm waiting for the next technology: mpeg4 HD DVD recorder.
david farmer @ Apr 29th 2008 7:58PM
My PS3 plays them great, BUT lack of content is a real problem. I'm cancelling my Netflix subscription because there is nothing decent to rent....let alone buy.
I'm ready to buy ANOTHER PS3 IF they release some good movies and a decent back catalog!
Gus @ Apr 29th 2008 7:58PM
Geez, you don't have to be a rocket scientist to have worked this one out!
HD DVD supporters have been saying this long before the end of the format war, blu ray is to expensive for the masses and will be until they stop the deliberate price gouging policy and fully license production to the Chinese, prices should be market friendly about 2097.
I went through the entire BR catalog yesterday, there is 4 movies in total that interest me, why people would pay the exorbitant prices for old and tired movies is beyond me, new releases perhaps, but upscaled DVD is definitely good enough for 99% of the boring BR catalog.
Blu ray should change it's name to "PS3 ray" because without it , BR is stone cold dead. Blind Freddy can see this product is going the route of most sony controlled proprietary products. Unless you own a PS3 and a HD TV in combination, this format is dead in the water, way to expensive, to restrictive, under featured, and unless it is very cheap, no reason for the masses to want it.
Seig52 @ Apr 29th 2008 9:23PM
Toshiba never licensed to the Chinese despite all of the rumors. Toshiba would have never been able to sell a player below $200 and make a profit. The problem was that they were not in the market to make a profit, they wanted to kill blu-ray at any cost, which still did not work. I would love to see low prices right now but I also do not live in a dream world. I know that until dropping prices makes economic sense for a CE company then they will not drop prices. People are assuming that as soon as hd dvd is gone that blu-ray will suddenly be $150 and movies would be $15-$20. This doesn't happen in the real world. I have no problem with criticizing blu-ray because they have made quite a few mistakes, but this unrealistic criticism and people praying for blu to fail because they went hd dvd is ridiculous.
Mr. E @ Apr 29th 2008 8:00PM
Yawn. What ridiculously non-revealing "research". Oh my heavens, you mean consumers aren't ALL early adopters? Some actually wait for lower prices and better features? GASP, call the newspapers, send out a press release!
chestnu1 @ Apr 29th 2008 8:00PM
I think the discs cost so much is because there are so few places equiped to make them so they can charge a lot.
Truth Teller @ Apr 29th 2008 8:56PM
Oh my.
How can this be?
I thought everyone knew that most if not all of the US consumers were going to spend all their tax rebate $ on PS3s & that Blu-ray was growing to the majority movie format after just reaching 8% of the movie disc market already!?
Seems like I'm not the only one doubting that Blu-ray will be going anywhere anytime soon.
Clearly the bit 'the - BD - industry' is terrified of admitting is that when they are seriously throwing dates like 2013 around etc etc then it's already way too late.
Blu-ray is an expensive niche the mass-market will ignore until the product is finished & the prices get to where they were with HD DVD (and I mean at the end of HD DVD).....which isn't going to happen anything like quick enough.
HD DVD already proved that far too few in the mass-market is going to pay $150+ for their new DVD player nor $25+ for their movies when the DVD alternative is so cheap, you need sub $100 prices & sub $20 movies.
......and the other little home truth the PS3/Blu-ray zealots keep ignoring is that not only is HD TV currently the minority share of the domestic TV market but no matter what happens there not everyone either can nor wants to turn their homes into a mini-ciniplex.
This means that the benefits of high def (on the mainstream 32" - 50" HD TVs) compared to upscaled SD DVD are nothing like as pronounced nor in the view of many 'worth' the heafty premium Blu-ray demands, ditto the audio improvements.
I'm all for high def but Blu-ray is the really stupid route to it.
Blu-ray guarantees high def is mainly a high margin high cost niche and is largely excluded from the mainstream.
No wonder they used a bunch of f*ckwit football-type game console kiddies as their primary 'supporters' for this idiotic venture.
dukefan @ Apr 29th 2008 8:58PM
all blu rays at costco are 26.99 or less so really i dont have a problem with the prices. on the other hand at best buy every blu ray is 35.99 or 39.99 unless theyve been out for a year they are 25.99. but really who wants to wait that long?
Gus @ Apr 29th 2008 10:06PM
The problem is dukefan, for most of the old and tired PS3 ray movie catalog, they can be purchased for $5 on DVD
why not the LS2LS7? @ Apr 29th 2008 9:48PM
Hamstrung players? As the article says, 85% of players are PS3s and they are fully 2.0 compliant. How then are player problems holding BluRay back?
I do agree high prices is a problem. $400 is a big barrier to entry. BluRay is actually doing pretty well considering the cost of players, but on an absolute scale, it's clearly not a big factor in the video market yet.
Truth Teller @ Apr 30th 2008 8:44AM
I know some people find this a shock & beyond being able to grasp but there's a whole world out there that have zero interest in the PS3, for anything.
Many will NEVER buy a game console no matter how 'great' the PS3 gang claim it to be.
No point howling at the moon & complaining about that, that's just how it is.
David Susilo @ Apr 29th 2008 9:51PM
"Blu-ray just isn't going to dominate the market until prices sink down from the stratosphere and players emerge that are fully-featured."
No $#!+ Sherlock!
Jim @ Apr 29th 2008 10:13PM
Blu-ray won the battle for one simple reason: BR has a 96% market share of HD players in Japan. To be more in depth, 2 out of every 3 new game console sold in Japan is a PS3.
Sony=Godlike in Japan! BR already has an established base. As such, it will thrive quite nicely.
I think what is really irking people is that the good ole' USA wasn't a real factor in the format war.
WebDev511 @ Apr 30th 2008 1:22AM
Mini-Disc had a huge installed base in Japan too, but that means SQUAT in the rest of the world.
Blu is likely to languish because both discs and players are too expensive for an economy in recession/stagflation to adopt. If it can survive until the market bounces back it has a chance to make it out of niche mode. If not we'll have LaserDisc 2.0 for sure. Granted there will be more players and hopefully titles, but it won't look anything like DVD does today.
I just makes me wonder what the result would have been if Toshiba could sustained the $100 entry level player through the end of 2007.
Keith Benedict @ Apr 29th 2008 11:05PM
This is anything but shocking. As I've been saying all along, until/unless prices of the players come down to earth so that the average Joe can afford them, Blu-ray will flounder. If the the manufacturers wait too long to drop prices, Blu-ray will remain a niche product. If studios don't release more software for the players, that would be another strike against them.
If all parties involved are not careful, this could wind up being just like the high definition CD format that Sony tried to launch.
Jeff N. @ Apr 29th 2008 11:24PM
It took awhile for HDTV sets to come down in price, the same is for Blu-ray players. The technology is still in it's infancy. Prices will tumble in the next year and a half. Remember 4 head VHS Hi-Fi VCR's were $500.
in the late 1980's and early 1990.
DrXym @ Apr 30th 2008 4:38AM
I think its fairly obvious that high prices affect take up. It's also fairly obvious that DVD and other technologies went through a similar price curve.
1st gen DVD players cost a fortune, more than many Blu Ray players. Manufacturers sell at a profit and as their margins improve the prices drop. There are new players from various manufacturers coming out over the next few months which means the market is going to awash with models which means lower prices. On top of that there is at least one Chinese manufacturer (Funai) due to launch a sub $300 model soon.
The market is clearly maturing and is due a price drop. I expect by Christmas that mainstream players will be obtainable for around $300 and at least a few Chinese no-names for cheaper again.
DrXym @ Apr 30th 2008 9:03AM
Correction, Funai is Japanese, but Gowell is Chinese.
foxb @ Apr 30th 2008 7:44AM
DrXym,
I guess you never follow any news. There will be no Chinese BD players in near future. Sony refuse to license BD to Chinese Makers.
DrXym @ Apr 30th 2008 9:00AM
Oh really?
http://www.gowellent.net/2008.html
There are also cheap no-name models coming from Funai who may not be Chinese but target a similar market.
Kumar @ Apr 30th 2008 9:22AM
There really is no good comparison between BD prices coming down and HDTV prices coming down.
Analog tv is going away, so we all know HDTV is here for to stay. Also old analog tvs can't be made anymore, unlike DVD production, which is still in full swing.
kurt @ Apr 30th 2008 9:49AM
Studios should release titles on BD a few days before the release on DVD.
Price is a barrier, but wouldn't be a major barrier to uptake IF consumers had a strong incentive to buy a BD player. Picture quality clearly isn't enough.
I am somewhat surprised that the movie studies haven't been pushing BD as a way to limit piracy. If studies were to release new movies on BD a few days before they were released on standard DVD, sales of hardware would shoot through the roof.
Don't get me wrong, I'm no lover of DRM, but viewing things from the perspective of the studios, this would seem like a smart move. Although BD's DRM has been cracked, it would still make the movies significantly more difficult/inconvenient/expensive to crack.
An impulse purchase of a BD player will be much more likely if having a new machine is the only way people can see a new release.
solodragon @ Apr 30th 2008 10:04AM
This is why I only buy my Blu Ray discs used--generally from Amazon. I won't pay over $20.
John @ Apr 30th 2008 10:25AM
@Jim
Where do you get your PS3 sales numbers? 2 out of 3 consoles sold are PS3's? Really?
Last week's console sales numbers in Japan.
- Wii: 44,241
- PS3: 7,438
- PS2: 6,545
- Xbox 360: 1,076
Even adding the PS2 and PS3 sales together doesn't equale 2 out of 3.
kcmurphy88 @ Apr 30th 2008 10:57AM
One reason not to buy a PS3: If you have kids, do you hook the PS3 to the main TV? If so, when do the parents get to watch something? WHo needs another point of conflict?
VinylVision @ Apr 30th 2008 6:57PM
I will not join/purchase BluRay until all playback via HTPC home computer enables full audio playback capabilities AND use of two concurrent hdmi outputs (one for audio and another for video). I want to route audio and video to separate components simultaneously. Cost is not the problem for me. And True HD audio playback via PC currently cannot be done.
horngreen @ Apr 30th 2008 7:26PM
two hundred even with a recorder is still expensive. the players should be selling sub one hundred - even then who is going to buy with media prices^