Will Blu-ray ever capture 50% of the market?

[stockstar1138]

Please don't take this as a chicken little post, those who know my posting record know that i am one of the most optomistic posters on this board.

I'm not so sure if blu-ray will ever hold over 50% of the home media market. Here's why.

1. Downloads are on the rise. Do I think downloads are a viable format? No. Do I think downloads will ever hold more market share than blu-ray? No. Will the download market continue to grow over the next decade? Yes, and this eats into the market share blu-ray can have. Downloads have decent support from companies, Apple supports downloads, Microsoft supports downloads, and don't be suprised if Sony doesn't jump in by the end of the year. Also, I'm pretty sure that every major movie studio has some form of digital download distribution. There will be plenty of people who say, that movie was alright I don't want to buy the blu-ray for $19.99, because I'm only going to watch it once more, but I'd be happy to download a 720p, dolby digital download for $4.99. Like I said earlier, I don't think that downloads will ever be bigger than blu-ray, but there is demand for them right now, and companies will improve their download services (more titles, faster download times, higher quality), and with in increase in the quality of the service there will be an uptick in consumer support for it. Downloads are not a threat to blu-ray. Its not a competitor, but simply another way for blu-ray/dvd owners to get movies, which eats into market share. Look at it as the next-gen rental solution, which some people will use as their way of getting media or at least their way of getting media the majority of the time.

2. DVD is not going away anytime soon. Roughly 1 in 4 households own an hdtv. It took us nearly a decade to get 25% of the market with HDTVs in their homes and while HDTV growth is on the rise, and on the rise fast, it is going to be another decade before 80% of the market has an HDTV though. This means that there is no need for blu-ray for 20% of the market and thats after a decade from now. and just to point out, we are going into a recession, and that will certainly slow both blu-ray and hdtvs growth for the next few years. You need to realize that when we break 50% adoption, which most likely will not happen til at least 2011, , we are going to be dealing (a majority of the time) with people who have a below average income. HT fans in the bottom half have already gotten in, because its worth it to them. So, we are going to be dealing with people who make below avg. incomes who don't care that much about home theater. The average tv for a J6P right now is 32 inches, 480i, and costs roughly $400. Until you can get an HDTV that is $400 (inflation adjusted of course) and roughly that size and doesn't look like total crap, its going to be difficult for HDTVs to keep increasing market share once we overcome the 50% adopition hurdle. Despite popular belief the move to digital from analog broadcasts is going to cause a massive surge in HDTV adoption, its not. The move is only for people who do not have dish, cable, etc. and the govt. is basically handing out the solution (converters) for free. People that don't have a service, probably don't care that much about home entertainment and if they are offered with a. a free solution or b. buying a $1000 hdtv, that i will feed a SDTV signal into, I think 90% will go with solution A.

Here is my estimation for HDTV growth in America.

Jan 1st 2008 - 1/4th of US households
Jan 2009 1/3
Jan 2011 1/2
Jan 2014 2/3
Jan 2016 3/4
Jan 2018 4/5

please note that this is only for a household to have 1 hdtv in their home, they most likely will still have at least 2 SDTVs too in the house, which they will still use DVD (besides PS3, do blu-ray players have AV outputs). please also note that just because somebody has an hdtv doesn't mean they will support blu-ray. If people have the option of blu-ray quality on 1 tv, but can't play it on their other tvs, or upscaled quality on 1 tv and the option to play it on the other tvs, people are going to go with the later option. also, upconverters will be good enough for many. and especially don't expect people to replace their catalog dvds with blus. For those that do support blu, new releases are all they will probably buy.

Here are my predictions for software adoption

2008 - Blu-ray 1%, Downloads 1%, DVD 98%
2009 - Blu-ray 5%, Downloads 2%, DVD 93%
2011 - Blu-ray 20%, Downloads 5%, DVD 75%
2014 - Blu-ray 35%, Downloads 10%, DVD 55%
2016 - Blu-ray 40%, Downloads 15%, DVD 45%
2018 - Blu-ray 45%, Downloads 20%, DVD 35%

by 2018 we should see a new format on the market, blu-ray will begin to decrease as dvd is at the present time. downloads will begin to level off, and unless some major breakthroughs are done in internet speed, i don't think downloads or streaming is a permanent answer for a long time to come.

as you can see blu-ray does become a very healthy format, that recieves quality titles such as LOTR, Star Wars, ET, Jaws, JP, etc, and near the end of its life it is the most popular format, but never eclipses the 50% mark.

Just to clarify the downloads once again, these are not people who solely rely on downloads, but just total market purchases. for example in the future if their are 5 movies that I want, 4 that I think ill watch multiple times, and 1 that i just want to see once more, Ill download that 1 as a rental for 24 hours and buy the other 4 on blu-ray. Thus, 20% of my purchases are downloads and 80% are blu-ray.

There is only 1 way that blu-ray will become as successful as DVD, and that is, i cannot believe I'm saying this, Combo discs. I think combo discs are the solution to mass adoption, however, hd dvd jumped the gun to early, because they couldn't get the price down and studios still wanted cheap dvds for consumers. If studios only release in combo discs at a below 20 dollar price, blu-ray will take off like DVD did, but unless they do, I don't see blu-ray ever becoming really, really main stream.


thoughts?