"Club Penton" - Ask questions to Hollywood insider "Penton-Man"

[HeavyHitter]

Originally Posted by DenonCI

I would like to see pricing lower as well, but do you understand the history of why Blu-ray, and HD DVD for that matter, were developed? It was because the sales of DVD was reaching its peak and the profits margins were getting squeazed on both the software side, and especially the hardware side.

So the hardware makers decided to bring competing HD formats to the forefront with a stupid format war (which may or may not have delayed adoptiong...but it certainly didn't help matters any), in order to sell higher priced players without "cheap" competition from the Chinese.

DVD is a VERY mature market now, which is why prices are so cheap (both hardware and software). Were you an owner of DVD in the beginning (1997)?

I was and not only was software a pain in the ass to find, it was damn expensive. In those days, there really wasn't an rental option, in order to watch movies, you had to buy them. Thankfully the Internet boom created a lot of opportunities to buy things much cheaper, but that wasn't until the format was a couple of years old.

Right now, you can rent Blu-ray from multiple sources (Netflix, Blockbuster, etc.), and buy it online or in B&M stores. Online prices are better because of the lower overhead, but you will pay a big premium to buy locally at Best Buy.
There may be a lot of PS3 owners out there (millions and millions), but THEY AREN'T BUYING MANY MOVIES. Just look at the numbers, they don't lie. We are still in the early adoption phase, not mass adoption. So you won't see mass adoption pricing yet, but it will comes. Warner lowering prices is a good move and hopefully others follow suit, especially FOX. But look at FOX DVD's...they were never the cheapest on the block either.

Good post and facts.

[Joe Cain]

Originally Posted by DenonCI

I would like to see pricing lower as well, but do you understand the history of why Blu-ray, and HD DVD for that matter, were developed? It was because the sales of DVD was reaching its peak and the profits margins were getting squeazed on both the software side, and especially the hardware side.

So the hardware makers decided to bring competing HD formats to the forefront with a stupid format war (which may or may not have delayed adoptiong...but it certainly didn't help matters any), in order to sell higher priced players without "cheap" competition from the Chinese.

DVD is a VERY mature market now, which is why prices are so cheap (both hardware and software). Were you an owner of DVD in the beginning (1997)?

I was and not only was software a pain in the ass to find, it was damn expensive. In those days, there really wasn't an rental option, in order to watch movies, you had to buy them. Thankfully the Internet boom created a lot of opportunities to buy things much cheaper, but that wasn't until the format was a couple of years old.

Right now, you can rent Blu-ray from multiple sources (Netflix, Blockbuster, etc.), and buy it online or in B&M stores. Online prices are better because of the lower overhead, but you will pay a big premium to buy locally at Best Buy.
There may be a lot of PS3 owners out there (millions and millions), but THEY AREN'T BUYING MANY MOVIES. Just look at the numbers, they don't lie. We are still in the early adoption phase, not mass adoption. So you won't see mass adoption pricing yet, but it will comes. Warner lowering prices is a good move and hopefully others follow suit, especially FOX. But look at FOX DVD's...they were never the cheapest on the block either.

There's a good reason PS3 (and other BD player) owners "AREN'T BUYING MANY MOVIES" which has nothing to do with catalog pricing or owner demographics: the titles aren't there. BD has been on the market two years and has yet to break 1000, which number DVD reached after little more than a year. In January of 2000, less than three years after DVD's US debut, there were 5000 titles---at a time when little more than 4 million US households owned DVD players. I'm not suggesting software sales would necessarily rise proportionately if there were 2 or 3 or 4 times the number of BD titles currently on the streets, but consumers can't buy what they can't buy.

[Bobby Henderson]

Originally Posted by DenonCI

I would like to see pricing lower as well, but do you understand the history of why Blu-ray, and HD DVD for that matter, were developed? It was because the sales of DVD was reaching its peak and the profits margins were getting squeazed on both the software side, and especially the hardware side.

Any product development will usually have a profit motive. However, the primary reason why Blu-ray was developed was to fill the need for an optical disc-based high definition video format. DVD was merely standard definition. The D-VHS tape format supported high definition, but had the same drawbacks as any magnetic tape-based playback format.

Development on Blu-ray began years before the sales of DVD began to decline. Some of the first components, such as diodes, were created in 2000. The Blu-ray format name was chosen early in 2002. The first set of physical specifications were settled in 2004. Of course, the actual players didn't start shipping until 2006. Nevertheless, a lot of work on Blu-ray had already been done well before DVD sales had even peaked.

If the movie industry and electronics industry waited until DVD sales had started declining before developing Blu-ray, we wouldn't have finished BD players at this point.

Originally Posted by DenonCI

DVD is a VERY mature market now, which is why prices are so cheap (both hardware and software). Were you an owner of DVD in the beginning (1997)?

DVD player prices are dirt cheap (and mostly unprofitable) because of two things: China and Wal-Mart.

I bought my first DVD player (a Sony S530D) in April of 1999 for roughly $400. I waited 2 years for various problems with 1st and 2nd generation DVD players to be solved (lack of dual layer support, lack of DTS Output support, various technical glithes, etc.). The DiVX thing was also another factor inspiring the wait and see approach. I did the same thing with Blu-ray. When it became clear BD was going to win the format war, I stopped waiting for a good dual format HD-disc player to be developed and bought a PS3 instead.

A couple stores in my town, such as Hastings, were offering DVDs for rent by early 1998. They had a pretty good selection by the time I bought my first DVD player. I waited the same amount of time to get into Blu-ray. If anything, I see fewer BDs for rent at this point than what I saw with DVD in 1999.

Originally Posted by DenonCI

There may be a lot of PS3 owners out there (millions and millions), but THEY AREN'T BUYING MANY MOVIES. Just look at the numbers, they don't lie.

Let's see those numbers.

The "red ants" often mis-characterized PS3 owners as a crowd that only plays video games. The fact is PS3 owners have largely been responsible for the steady two-fold and three-fold disc sales rates Blu-ray had over HD-DVD. The PS3 deserves a great deal of credit for helping Blu-ray win the format war.

The Matrix is often credited for kick-starting the mass-adoption phase of DVD with its sub-$15 pricing back in September of 1999. That happened at the 2 year mark of the DVD format. Blu-ray is also at the 2 year mark. Some huge titles are coming out this fall, and we've already seen some very good pricing deals on certain BDs. However, studios like Fox will have to rethink their pricing policy or their sales levels are going to go into the toilet compared to that of other studios.

[DenonCI]

Attach rates thus far aren't very good.

Also, I know HD optical was in process before BD and HD DVD were even announced. In fact, read DVD Demystified and you will see that while DVD was being developed, they were already talking about the next generation.

Frankly, both formats were launched 2 years too early. There weren't enough HDTV's in the marketplace to kick-start a new format, but neither could wait for fear that the other would get entrenched and then it would be "game over."

300 is the best selling Blu-ray with nearly 500,000 copies sold. There are in the neighborhood of 8 million BD players (I think), yet not one software title has sold over 500,000 copies?

Also, DVD was the right product at the right time. For most people, the jump to Blu-ray isn't a big deal for a couple of reasons:

1. They could give a damn about HD audio because they don't have the system to handle it properly....or even worse, they do but it isn't set up correctly.

2. Unless they have a large display they most likely won't see the difference.

3. The economy is in the shitter right now and people aren't spending money. This makes the "want haves" and the "must haves" change priority in most households.

4. DVD worked with ANY TV. To get the benefit of BD, you need a HDTV. Until more are sold, the market penetration for BD is quite limited (in comparison to DVD).

People who frequent these forums are hobbiest...we aren't the mainstream by any stretch of the imagination. J6P is more worried about losing his house or his job right now, not the next great home entertainment delivery system. Until J6P adopts Blu-ray, you won't be seeing low prices IMO.

[Shinma]

Originally Posted by Penton-Man

The various fourth generation optical storage technologies consist of holography, Multilayer recording schemes and near-field optical recording (which, to the best of my knowledge, appears tapped out at 100 – 200 GB with their double-layer disc).

The way things are going with the above, I have my doubts that consumers with ever see devices in their homes for their commonplace usage like with the Blu-ray players and recorders.

Keep in mind, as the Sony spokesperson said, there are 400 GB prototype Blu-ray discs floating around and Sony keeps a pretty good finger on the pulse of the potential competing optical data/storage technologies, even at the basic science level……….
http://spie.org/optical-data-storage.xml

As you should count how many engineers they have here on various Tech committees…………
http://spie.org/x15614.xml

So, I would have a tendency to trust what the Sony rep is saying.

I’m hoping that another type of physical media comes along before downloading becomes the mainstream method for viewing movies.

I would concur with this. I was at the SPIE event, and am not sure I saw evidence of anything more compelling than what I'm hearing about the multi-layer progress with blu-ray. I've worked a little with holographic storage, and got back up-to-date at the conference, but I'm not sure that the remaining barriers are any easier to overcome than they will be for the blu-ray style format to extend its capabilities to the same point.

No question Sony was there, both sharing committee responsibilities and checking out the competition.

[pellucidity]

Originally Posted by DenonCI

300 is the best selling Blu-ray with nearly 500,000 copies sold. There are in the neighborhood of 8 million BD players (I think), yet not one software title has sold over 500,000 copies?

Not to nitpick your post, but The Dark Knight will shortly be arriving on Blu-ray, and will likely beat that record very quickly. I'm with the many that expect it to be Blu-ray's The Matrix.

[DenonCI]

Originally Posted by pellucidity

Not to nitpick your post, but The Dark Knight will shortly be arriving on Blu-ray, and will likely beat that record very quickly. I'm with the many that expect it to be Blu-ray's The Matrix.

I said the same thing earlier. It better be the best selling title or else the format is in trouble. (halfway joking).

[dialog_gvf]

Originally Posted by Penton-Man

I’m hoping that another type of physical media comes along before downloading becomes the mainstream method for viewing movies.

As you say, for "viewing" movies. If downloads are convenient enough for the mainstream, then they are really VOD, and purchasing to own goes bye bye.

But, the assumption it will become mainstream is just that. Far smaller storage and bandwidth offerings like ebooks and music haven't replaced the physical.

Are we going to have downloads forced down our throat, or is this going to happen because of consumer demand?

Gary

[Bullseye]

Penton what is it with Michael Mann and the colour blue. Its a certain shade of blue which appears in a number of his films including Miami Vice and Manhunter.

[Bobby Henderson]

Originally Posted by DenonCI

Frankly, both formats were launched 2 years too early. There weren't enough HDTV's in the marketplace to kick-start a new format, but neither could wait for fear that the other would get entrenched and then it would be "game over."

HDTV sales were doing very well in 2006. According to numbers by Leichman Research Group posted in a 2006 dated USA Today article, HDTV use grew to 1 in every 6 American homes, up from 1 in 14 two years earlier. Recent sales levels of HDTV monitors has been even better. According to NPD Group, 10 million HDTV monitors were sold in the fourth quarter of 2007.

HDTV unit sales could do even better this fall. The Feb. 17, 2009 cut-off date of OTA analog broadcasts is looming large. Broadcast and cable networks are getting more aggressive in offering HD. There's a lot of big titles being released on Blu-ray this fall. Overall, I'm pretty optimistic for the prospects of Blu-ray this fall.

Originally Posted by DenonCI

Also, DVD was the right product at the right time. For most people, the jump to Blu-ray isn't a big deal for a couple of reasons:

1. They could give a damn about HD audio because they don't have the system to handle it properly....or even worse, they do but it isn't set up correctly.

2. Unless they have a large display they most likely won't see the difference.

3. The economy is in the shitter right now and people aren't spending money. This makes the "want haves" and the "must haves" change priority in most households.

4. DVD worked with ANY TV. To get the benefit of BD, you need a HDTV. Until more are sold, the market penetration for BD is quite limited (in comparison to DVD).

1.: Lots of people have bought DVD players and HDTV sets without setting them up properly. It didn't stop them from buying. The situation just created more work for people ranging from cable/satellite installers, "geek squad" people from electronics stores and gear-head friends who happened to know how to connect/set-up the equipment properly.

2.: People tend to watch smaller TV sets at closer distances. Modest 720p-based televisions still show noticeable improvements in image detail/sharpness when playing Blu-ray versus DVD. The color quality with Blu-ray movies is also better than DVD.

3.: There's a lot of Americans who aren't doing bad financially (particularly in my part of the country). Some even believe the story of the bad economy is being blown out of proportion. I don't agree with that, but that's how those people feel.

Certain Americans are drowning in debt and unable to do things like buy new HDTV monitors or Blu-ray players.A lot of people are simply cutting back on expensive lifestyle habits and pricey vactions to spend more time eating and being entertained at home.

The US economy wasn't doing well when DVD hit its stride. The dot-com boom was cratering when movies like The Matrix and Gladiator sold DVDs in record setting numbers. The 9-11-01 terrorist attacks and following recession didn't prevent the DVD format from making continued gains.

One thing Americans like to do when economic times are tough is watch a lot of movies. They're spending more time at home instead of booking vacations, eating out, etc. The struggling economy isn't necessarily a bad thing for Blu-ray.

4.: To get the full benefit of DVD viewers needed a 16:9 widescreen TV and component video connections. Most DVD player owners didn't have that for a long time.

Most Blu-ray players and Playstation 3 also work with any SD or HD television monitor. They can be set to output 480p and include legacy connections like composite or S-Video.

[Deciazulado]

Originally Posted by Joe Cain

BD has been on the market two years and has yet to break 1000, which number DVD reached after little more than a year. In January of 2000, less than three years after DVD's US debut, there were 5000 titles

By December 1997, over 1 million individual DVD discs were shipped, representing about 530 titles. (First year)

By the end of 1999, over 100 million discs had shipped, representing about 5,000 titles. (3rd year)

Blu-ray had about 290 titles by the first year, and 720 titles by the second year. In those first 24 months it had a very contested format war against HD DVD which preceeded it by 2 months and released about 460 titles.

Blu-ray by next Tuesday, at 26 months and a half old, will have almost 900 titles. Till the format war ended 20-30 titles were added a month, currently we're getting around 60-100 titles a month. Blu-ray will easily have broken a 1000 by Halloween and probably will reach into the 1300's by the end of 2008. (2 and a half years)

Sources: Everything You Ever Wanted to Know about DVD: The Official DVD FAQ, Blu-ray.com database, Apocalist

[DenonCI]

The differences between DVD and VHS were HUGE, that isn't the case between Blu-ray and DVD. Don't get me wrong, I love Blu-ray and refuse to buy any DVDs. When I show BD to friends, they say "it looks great, but I always thought DVD looked great on your projection system."

[DenonCI]

Originally Posted by Bobby Henderson

HDTV sales were doing very well in 2006. According to numbers by Leichman Research Group posted in a 2006 dated USA Today article, HDTV use grew to 1 in every 6 American homes, up from 1 in 14 two years earlier. Recent sales levels of HDTV monitors has been even better. According to NPD Group, 10 million HDTV monitors were sold in the fourth quarter of 2007.

Versus standard TV's in 1997 where the ratio was probably 2+ TV's per household.

HDTV unit sales could do even better this fall. The Feb. 17, 2009 cut-off date of OTA analog broadcasts is looming large. Broadcast and cable networks are getting more aggressive in offering HD. There's a lot of big titles being released on Blu-ray this fall. Overall, I'm pretty optimistic for the prospects of Blu-ray this fall.

Agreed, it will definitely help, especially with bundled deals (free BD player with HDTV purchase). Now the question will be, what profile will the player be? Hopefully at least profile 1.1 since I don't think too many people are going to use Profile 2.0 functions, but I could be wrong.

1.: Lots of people have bought DVD players and HDTV sets without setting them up properly. It didn't stop them from buying. The situation just created more work for people ranging from cable/satellite installers, "geek squad" people from electronics stores and gear-head friends who happened to know how to connect/set-up the equipment properly.

Agreed.

2.: People tend to watch smaller TV sets at closer distances. Modest 720p-based televisions still show noticeable improvements in image detail/sharpness when playing Blu-ray versus DVD. The color quality with Blu-ray movies is also better than DVD.

There will be an increase in quality, but do most consumers care? Maybe, maybe not. At some point the transition from DVD to Blu-ray will need to happen for Blu-ray to become mainstream. Whether that is by delaying DVD releases by a few weeks or having "added" features to Blu-ray to make it a premium purchase. DVD is still a cash cow for the studios and they don't want to kill the golden goose (yet).

3.: There's a lot of Americans who aren't doing bad financially (particularly in my part of the country). Some even believe the story of the bad economy is being blown out of proportion. I don't agree with that, but that's how those people feel.

I agree with you that it isn't as bad as reported, but people can no longer use their homes as ATM machines since their value has dropped. This is curbing spending, especially of the discretionary variety.

Certain Americans are drowning in debt and unable to do things like buy new HDTV monitors or Blu-ray players.A lot of people are simply cutting back on expensive lifestyle habits and pricey vactions to spend more time eating and being entertained at home.

Yes, but will they find "greater" entertainment by upgrading to Blu-ray? Probably not for most people, especially with the premium price for hardware, but at some point, the scales will tip and this will become more likely.

The US economy wasn't doing well when DVD hit its stride. The dot-com boom was cratering when movies like The Matrix and Gladiator sold DVDs in record setting numbers. The 9-11-01 terrorist attacks and following recession didn't prevent the DVD format from making continued gains.

The dot.com meltdown hit in March of 2000 and didn't affect as many people as the current housing crunch is.

One thing Americans like to do when economic times are tough is watch a lot of movies. They're spending more time at home instead of booking vacations, eating out, etc. The struggling economy isn't necessarily a bad thing for Blu-ray.

They are probably renting DVD's from Netflix. Hopefully they will upgrade to Blu-ray this Christmas.

4.: To get the full benefit of DVD viewers needed a 16:9 widescreen TV and component video connections. Most DVD player owners didn't have that for a long time.

Most don't have it now. But to get the full experience from Blu-ray, you have to have a HDTV. If not, then just use DVD (which is what they are doing).

Most Blu-ray players and Playstation 3 also work with any SD or HD television monitor. They can be set to output 480p and include legacy connections like composite or S-Video.

Other than for gamers, this is the minority by far. People aren't buying PS3's to watch Blu-rays on their 20 inch CRT TV's.

***Penton, sorry for hijacking your thread.***

[Penton-Man]

Originally Posted by DenonCI

***Penton, sorry for hijacking your thread.***

No problem.

I don't mind you all doing the talking some of the time (as long as everything is sincere and in good faith) as it gives my fingers a much needed rest.

[DenonCI]

Originally Posted by Penton-Man

No problem.

I don't mind you all doing the talking some of the time (as long as everything is sincere and in good faith) as it gives my fingers a much needed rest.

What's your take on this? If there wasn't the issue of competing formats, do you think waiting until 2008 to release HDM would have been a better move?

I don't BD will truly take off until next Christmas, but I hope I'm wrong.

[MerrickG]

Hey Penton,

Given your Sony connections, any comments on the possibility of a new Ghostbusters film?

AT least let the people at Sony know that we want one!

[Penton-Man]

Originally Posted by Esox50

Enhance is such a better word.

Penton, you da man!!! "Freeeeeeeeeeedom" (did I get all the "e's" in there my man?) on 1/20/09.

Every time I watch that scene it brings tears to my eyes……..and not because of the implied pain but, because of the unwavering courage!

Plus, every time I hear Sophie Marceau speak with her French accent in this movie, my heart melts.

I’ll tell ya.
No matter what the online PQ pundits say regarding the PQ or AQ of this upcoming title, I’ll fork out the dough from my own pocket for this movie without hesitation, because I think if you’re a true film aficionado, some motion pictures just got you by the short hairs, no doubt.

Back in the day, I purchased the VHS tape, then the two disc laser disc set, then the DVD and I’ll surely buy the BD (sight unseen) as soon as it’s available.

[dialog_gvf]

Originally Posted by Joe Cain

There's a good reason PS3 (and other BD player) owners "AREN'T BUYING MANY MOVIES" which has nothing to do with catalog pricing or owner demographics: the titles aren't there. BD has been on the market two years and has yet to break 1000, which number DVD reached after little more than a year. In January of 2000, less than three years after DVD's US debut, there were 5000 titles---at a time when little more than 4 million US households owned DVD players. I'm not suggesting software sales would necessarily rise proportionately if there were 2 or 3 or 4 times the number of BD titles currently on the streets, but consumers can't buy what they can't buy.

But, those figures are wrong. DVD was nowhere near 1000 after one year. I don't even think it had 100% studio support after one year.

BD can't compete against revisionist history.

Gary

Edit: Deciazulado gave the figures.

[Esox50]

Originally Posted by Penton-Man

I’ll tell ya.
No matter what the online PQ pundits say regarding the PQ or AQ of this upcoming title, I’ll fork out the dough from my own pocket for this movie without hesitation, because I think if you’re a true film aficionado, some motion pictures just got you by the short hairs, no doubt.

Agreed 100% regarding this movie. One of my all time favorites.

I gotta ask though, do you know something we don't regarding the A/V quality of this upcoming release, or was it just a general statement?

[Deciazulado]

Originally Posted by Penton-Man

Back in the day, I purchased the VHS tape, then the two disc laser disc set, then the DVD and I’ll surely buy the BD (sight unseen) as soon as it’s available.

I agree. And carrying a 5" Compact Blu-ray Disc in your pocket sure beats carrying the small man sized platter reel of it on your shoulder. The term Truck tire size it not that far away.

Originally Posted by Esox50

Agreed 100% regarding this movie. One of my all time favorites.

I gotta ask though, do you know something we don't regarding the A/V quality of this upcoming release, or was it just a general statement?

Well all I've heard is what a very nice man told me which sounded good if it had to do with this.