Hype No Help: Blu-ray, HD DVD Disc Sales Go Ker-Plunk

HD Disc Wars
Written by Video Savant
Friday, 07 September 2007
The annual CEDIA trade show is undoubtedly one of the most anticipated events on the calendars of home video and audio lovers in the US. This year's 4-day event officially kicked into gear on Thursday in Denver, but already it's clear that ringleaders Sony and Toshiba plan to do everything they can to make the Blu-ray versus HD DVD format war the centerpiece of CEDIA Expo 2007. Sony got things rolling early in the pre-show proceedings on Wednesday by claiming that over the past 9 weeks, sales of dedicated Blu-ray players had passed sales of dedicated players for the Toshiba-backed HD DVD format. This was interesting news, primarily because Toshiba, since the launch of the HD DVD format, had focused mostly on sales of standalone players, while Sony mostly relied on sales of the PlayStation 3 game console with its integrated Blu-ray disc player. In addition, Sony and its Blu-ray partners focused on maintaining high prices for early adopter buyers, while Toshiba has been much more aggressive on the price of single-purpose HD DVD players, although it too worked the game console angle with an budget-priced add-on HD DVD player for Microsoft Xbox 360 owners. No one was surprised on Thursday when Toshiba countered the Sony claims by presenting statistics that indicate that Toshiba HD DVD players command 55% market share, with Sony holding just 42% of the market. That doesn't really refute the Sony claims, but it does provide some helpful context. But as it turns out, probably the most interesting and relevant HD DVD vs Blu-ray factoid to emerge so far from CEDIA is that disc sales are not following the trend for hardware sales. Even as sales of players -- both in standalone and game console form -- are increasing, sales of Blu-ray and HD DVD discs are on a downtrend that resembles a freefall. As reported by ars technica: From their peaks at the end of 2006, both formats have seen a rather precipitous sales decline. According to Sony, Blu-ray sold nearly 70,000 discs per week during the last weeks of 2006. But by mid-May, the last week for which Sony provided data, that had slipped to less than 35,000 per week. HD DVD saw a similar decline, but not as steep, going from around 43,000 discs to a bit more than 20,000. At one point towards the end of April, sales of Blu-ray and HD DVD discs were in a virtual dead heat. One of the key things to bear in mind here is that we are dealing with initial hardware and software sales numbers that are very small. Thus, it's somewhat inevitable that there will be erratic bumps and dips in the data from one reporting period to another. For example, end-2006 sales were probably inflated to some extent by holiday stocking-stuffer gift-buying ; in addition, the releases at the end of the year may have been tweaked to ensure that holiday selling opportunity was fully realized. But still, this must be very disturbing news for both the Sony and Toshiba camps. With hardware sales continuing to grow and -- if the hype is true -- accelerate, disc sales are headed in the opposite direction. It is certainly possible that this is just one of those statistical anomalies that occur in the life cycle of a new product. But if this trend continues for another quarter, this would be a full-fledged disaster for both formats. Elsewhere in the ars technica article there's a graphic, based on Toshiba-provided data, that shows that 33% of consumers considering the purchase of an HD disc player are leaning toward HD DVD, while only 16% are tipping in the direction of a Blu-ray player. But much more conspicuous are the "Don't Know" replies, totaling more than 50% of all respondents. You have to wonder how many of those "Don't Knows" are really votes for "Don't Care." And, more to the point, considering recent disc sales numbers, what percentage of current Blu-ray and HD DVD owners have settled into the "Don't Care" camp, despite the investment they've already made. Trackback(0) TrackBack URI for this entry Comments (3) Mastertech, Could it be that this time around HD disc pl September 09, 2007 Could it be that this time around HD disc player buyers are renting the discs instead of buying? Geez, at some point the public is going to catch on and start renting. For me the expense would have been tremendous! VHS, Laserdisc, Super VHS, DVD, D-Theater, and now the HD disc battle? I stopped buying after laserdisc! I guess I saw the future... LOL Another point is I can count on one hand how many HD disc movies we have watched from being too busy... Out last talk was how in the world are we going to find the time to watch all our TV shows this season. HD disc watching took a huge hit last TV season for us due to a lack of time. Through out the year now we change our rental plan with netflix to reflect the TV season. Set for 5 discs in the home for the summer and inbetweens but only 2 discs during TV season. Richard \| 68.217.120.215 ..., Mastertech, I think it's certainly possible that m September 10, 2007 Mastertech, I think it's certainly possible that many people who invested heavily in a standard DVD collection will be guarded about building a new HD disc collection, or replacing their old DVDs with Blu-ray and HD DVD titles (as they become available). But unless this is a very recent revelation that has hit early adopters en masse, I don't think it explains why recent disc sales are trending downward as the number of players is increasing. Again, it's still very early on in the product cycle for these products, so there could be a lot of minor factors causing this that aren't really cause for long-term concern. For instance, maybe the earliest adopters were simply much more aggressive buyers of discs for the new players than subsequent buyers. There could be a related factor here, too, in that the earliest buyers have already cherry-picked the available catalogs to the point where there's little of remaining interest to them. Yet another possibility is that because many players are now sold with a bundle of free discs that these bundles are putting an artificial lid on near-term demand. Presumably, these bundles sale volumes are not included in the POS sales data. So again, we can't really know, because there isn't enough data to make any definitive conclusions. But if player sales continue to grow over the next quarter or two, and that growth doesn't translate to obvious upticks for disc sales, then one or both formats could be on thin ice. Clearly Resolved \| 71.11.134.202 Owner, There is an old joke that goes: "A head of lettuc September 11, 2007 There is an old joke that goes: "A head of lettuce walks into a bar and orders a martini. The barkeep says "That'll be $10...and by the way, we don't get a lot of heads of lettuce in here!" And the lettuce replies "At $10 a martini, you won't see many more!" The COST of the discs is ourageous and the titles are uninteresting. Until they roll out the "Harry Potter" or "Lord of the Rings" movies of the world in true High Definition, people will just RENT titles in HD/BD from Netflix or Block Buster. Besides, my Toshiba HD DVD plays standard DVD's so well its like, Who Needs Hi Def? I watched Star Wars III (Revenge of the Sith) on standard DVD and it was excellent when upconvereted by the HD-A1. As for the format war: as long as the consumer is confused he will do one predictable thing: NOthing. coastcalibration \| 63.199.243.118 Write comment Show/Hide comment form You must be logged in to a comment. Please register if you do not have an account yet.

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