Top four reasons Blu-ray Disc will tank

IDG News Service — Wed, 27 Feb 2008 10:02:24 -0800

And then there was one: Blu-ray.

The battle between the next-generation, high-definition optical disc formats was an exciting, if exasperating, contest to follow. But now that the smoke is clearing, and Blu-ray has officially kicked HD DVD's proverbial butt, why am I still waiting to buy a Blu-ray player? I mean, my colleague spent US$1,000 dollars a year ago so that he could be the first one his the block to own one, and today, Blu-ray players are less than half that price.

Why doesn't my local Blockbuster carry Blu-ray Disc movies? In fact, why are my trips to Blockbuster so infrequent these days?

I'm thinking that Blu-ray -- and high-definition optical disc ownership in general -- just isn't that appealing. I've watched Blu-ray movies on the best televisions money can buy in Circuit City, Best Buy and Tweeter, and while the picture looks terrific, it just doesn't have me reaching for my wallet the way DVDs did when they were first introduced. Maybe it's because it's an evolutionary improvement in video quality and not the revolutionary jump that occurred when DVDs overtook VHS tapes.

So I've come up with these four reasons why I -- and probably most of America -- won't be heading down to Wal-Mart to buy a Blu-ray player anytime soon:

1. Blu-ray players are more than four times the cost of standard DVD players. In fact, Sony just announced Wednesday that it will be releasing its next-generation player for a cool $400 this summer. Still too much. Experts say the magic number that will spur real consumer adoption of optical disc technology is $199. Some analysts predict we may see Blu-ray players for $199 by the holiday season, but I'm not holding my breath.

I've had a certain disdain for Blu-ray Disc from the beginning (even though I figured it would win the format war) because of the high price of the players. I know this is partly due to the fact that, unlike HD DVD, manufacturers had to change out their DVD platter-pressing equipment for the new format. But I can't help but consider that Sony and others may be keeping the prices artificially high because they knew from the beginning they had a leg up on HD DVD when it came to studio support.

2. Upgraded DVD players offer near-HD quality for a fraction of the price. Have you been in your local Best Buy, Sears or Circuit City lately? That's right, 480i, 480p, 720p, 1080i, 1080p output are all offered on these inexpensive players, and you can purchase upgraded DVD burners as well for about half the cost of a Blu-ray player.

According to industry analysts, the sweet spot for high-definition televisions is from 32-in. to 46-in. screens. If you're sitting eight or more feet away from one of those televisions, I don't believe you're going to notice enough of a difference to convince you to spend a couple hundred more dollars on a Blu-ray player.

3. Why buy when you can rent? There was a time when I loved being able to grab a VHS tape or DVD out of my collection to watch a movie over and over again, because going out to the video store was a pain and got expensive over time. But that was before video-on-demand. Now, all I have to do if I want to watch my favorite movie once or twice a year is pay $1.99, and I don't have to store to stupid thing. Sure, I still have a few dozen of my very favorite DVDs (The Treasure of the Sierra Madre, Blade Runner, Crouching Tiger, Hidden Dragon, The Lord of the Rings), but it's not like I've built up a library akin to the 200-plus VHS tapes I once owned. It's just not as appealing anymore. Even my colleague with the Blu-ray player says he doesn't buy movies. In a year, he's bought just six.

These days, I prefer the video-on-demand services I get off my set-top cable box. They're cheap and easy to use. According to Michael Cai, director of broadband and gaming issues at media research firm Park Associates in Dallas, Internet movie downloads and video-on-demand rentals will represent a $1 billion market in two years. If you include advertising dollars, it will represent a $7 billion market in 2010.

Also coming down the pike is the ability to buy movies from your cable provider and store them either on your set-top DVR box or store them with your cable provider just like any online storage service offers free capacity today, according to Cai.

"Cable service providers with video-on-demand services are a strong contender to Internet video downloads," he says. "If you can fairly easily rent or buy a movie through a cable box, you'd probably rather do that than ordering a movie through an Internet site."

4. Downloads. While currently not up to speed, hardware like the Xbox 360 allows you to download movies in the background while playing games, so you won't pull your hair out as they trickle in overnight. But over time, cable provider bandwidth will increase -- and so will Internet downloads. My current fiber optic cable service offers 30Mbit./sec. downloads.

Obviously, I prefer my big television screen to an iPod or PC monitor, but I think the ability to transfer those downloads to a DVR box, Apple TV or some other hard drive will advance quickly. And, don't think Blu-ray champion Sony doesn't know that. According to a recent Wall Street Journal article, Sony CEO Howard Stringer is getting ready to challenge Apple in video-downloading services.

Though he doesn't have proof, Cai suspects that movie studios may be working at artificially slowing the advancement of movie downloads in order to maintain control of content. They learned a lesson from the music download industry after watching Apple dominate that market. Also, there's more of a profit margin in retail sales of Blu-ray Disc players and movies. For that reason alone, I'm more partial to supporting downloads once they're a viable option.

Related news, commentary, and predictions:

Prediction: Microsoft will announce Xbox/Blu-ray integration plans this month
Analysis: The home server in your pocket
News: Microsoft stays mum on Blu-ray Disc support
News: Toshiba halts HD DVD production, mulling future

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Top four reasons Blu-ray Disc will tank