Katzenberg: HD is a Niche (1 Viewer)

[Bruce Hedtke]

One of the most misleading aspects of this niche argument is the people that point to all the PS3's sold and how little software is being bought. There is no data one way or the other to say whether a PS3 and HDTV ever got married in that particular household. Of the millions of PS3's sold, how many are hooked up to an HDTV set and capable of actually using the Blu-Ray player? I suspect there are plenty of people who bought a PS3 with the intention of using it as a gaming console, the swine.

Bruce

 

[Ryan-G]

I agree.

I also seriously question the validity of the PS3 arguement in general, because BR play is not it's primary function, and isn't necessarily a factor in purchasing. In honesty, since the 360 and the PS3 share the same target market, they should share one critical factor: The number of people who own a next-gen console, an HDTV, and will use it to play movies.

As the target market is identical, there should be a nearly identical ratio of people who bought the 360 add-on to the people who use the PS3 to play movies. Any discrepency, more PS3 users than add-ons playing movies is indiciative of HD-DVD being perceived as an inferior format, as the ratios should be pretty much identical since it's the same market.

As such, the PS3 arguement really isn't valid for either the niche market or the "PS3 means HD-DVD is dead" arguement. PS3 is first and foremost a game console, and there's no guarantee a gamer is an avid movie watcher. In fact, it's *more* like that as you get into the hardcore gamer levels of gamers, the gamer is most likely a Pirate. Since hardcore gamers are most likely to have multiple platforms, and most likely to be avid PC users. So, whatever portion of the gamer market that is considered Hardcore, is likely to have a very high percentage that is also Pirate.

Poking around various gaming forums reinforces that, check out the BR/HD-DVD news threads on firingsquad for example, which invariably devolves into some kind of DRM or Piracy based rant(DRM rants often proceed Piracy advocation from the same poster from my experience outside of forums like this one.)

Edit: Even the hardware focused Anandtech, when BR/HD-DVD news is posted, quickly devolves into mass piracy support. Hardware focused sites tend to have high percentages of hardcore gamers, because realistically, there's no other reason to build a computer with SLI/Crossfire capability and such except games. Word on a 2.6ghz P4 and word on a C2D runs pretty much the same.

 

[Edwin-S]

Well, I think your argument is fallacious, because BD play is a primary function of the machine. The games are on BD discs. Furthermore, the machine was designed to play movies from the ground up, so its use as a movie player can be considered to be a primary function as well. The XBOX360, on the other hand, is different. The 360 was designed primarily as a game machine. The HD DVD add-on gives the machine a secondary function as a high def. player but only with an additional outlay.

The modularity of the XBOX360 design shoots a hole in your argument that the ratios of people using an add-on should equal that of PS3 users using the machine as a player. Most gamers are probably casual movie watchers. Using the XBOX360 as a HD player requires a gamer to make a concious decision to spend an additional amount of money to add movie playing functionality to his/her game system. For a gamer, the movie function is secondary so why would he/she spend additional funds to add that functionality to the system?

The PS3 has the function built in to the system. The gamer is primarily buying the unit for playing games, but automatically gains the function of a movie player. A PS3 owner may not use the unit as a player, but the function is always available in case the owner changes his/her mind.

It is not an affirmation of HD DVD's inferiority if more PS3s are used to play HD movies. It is just a function of convenience. The PS3 just requires the owner to buy a disc and stick it into the machine. The XBOX360 requires the owner to choose to spend money on adding extra functionality and then requires the owner to spend more money on the media.

Putting it another way. If the function is there it will eventually be used, even if only casually. If the function isn't there then most users won't give a damn and will not go out of their way to add it to the system. In conclusion, both machines can be aimed at the same demographic, but it does not mean that the ratios of owners using the machines as movie players are going to be equal.

 

[Rob Young]

Agreed. People seem to forget it took a while for DVD to be the huge success and many at the time questioned if DVD was worth it over LD or even VHS.

As long as studios keep releasing titles (ala laser disc) I couldn't care less if these next gen formats stay niche or not. The prices are not that much higher than dvd and the quality improvement is worth it.

It is everyone's loss who cares about PQ/SQ and yet hasn't jumped into these new formats. Those of us who do care about these things are enjoying these formats and not worrying about whether it is a niche or not.

 

[MatthewA]

Another thing we should not forget:

Beta came out in 1975.
VHS came out in 1976.
It was several years before either one had a mathematically significant proportion of the population of the USA owning it.

 

[Don May Jr]

Vincent isn't making any real assumptions. As the president of a company that has pursued HD authoring and compression prices, I can confirm that he is right on when he mentions the prices.

Less than a few months ago, I was quoted anywhere between 30K - 50K just for HD authoring for a few of our titles. These prices were similar with three separate companies I had called.... they were all within that range. When I spoke to one company exec about the crazy prices, he told me that it cost close to 30K "just" to create the navigation/graphics on Warner's HARRY POTTER HD DVD... not even including the authoring and compression!

If the numbers that Sony released (referenced earlier in this thread) are accurate (and I've heard they're pretty accurate) then it's safe to say, yeah, much like Sony/PS3 units and Microsoft/XBOX360 units, they are losing money based on some of the titles/numbers that have been sold.

The cost of replication is also rediculous right now, but, of course, that will come down in time if the format actually survives. It's more than TWICE the cost, per piece, of current DVD replication. Also, it is MUCH more expensive right now to replicate BLU-RAY discs as opposed to HD DVD because, unlike Sony, HD DVD replication does not REQUIRE that you pay for the useless encryption (which is already broken). Sony tacks on a per unit charge to add the encryption keys and requires that they are used. Although I haven't confirmed the price myself (I'm not, right now, interested in BLU-RAY personally) I have heard that the per unit cost Sony adds to the replication for the encryption is as high as an extra $3.00 PER unit! That's crazy! With HD DVD, you can chose to use it, or not.

I had high hopes for these new formats but I am VERY curious to see what the studios will be saying at this year's upcoming VSDA convention. Right now, neither HD-DVD nor BLU-RAY are even performing comparably to the numbers we were seeing for the beginning DVD sales over ten years ago. I was involved with one of the very first DVD releases to come out (the original NIGHT OF THE LIVING DEAD) and, even as an independent with much more limited distribution, I can honestly say we sold more than a few thousand units of that when DVD first came out.

When I see that major studios' HD DVD and BLU-RAY releases are selling less now, than we sold of an independent DVD over a decade ago, there's something that definitely NEEDS to be fixed for these formats to start succeeding.

 

[DaViD Boulet]

I can garauntee you that no laserdisc would have ever saw the top-10-movie sales list at amazon.com (had the two overlapped in time).

We've already seen a Blu-ray title find its way onto that list.

Even if HD becomes a "niche", it will be a MUCH BIGGER niche than laserdisc ever was.

 

[Jason Delaney]

I wish there weren't 2 formats. That besides price of a player is the main thing keeping average people and even me away. Too bad there wasn't some kind of agreement made between the two sides before they went retail.

If BRD is supposedly so much better size-wise etc, they should have used that disc technology and then used the HD-DVD name, as I would think to most people it sounds like the next logical step up from DVD.

I know all this stuff has been covered over and over. Just wanted to get my thoughts out there as a HT enthusiast on the lower end of the spectrum.

I have a 30" hdtv and a semi-decent sound setup.

 

[ppltd]

 

[ppltd]

There is very little alike in the numbers between DVD and HD formats, other than HD formats had a much wider initial release and are not doing anywhere near as good as DVD sales with a much more limited release.

 

[Paul.S]

Thanks for the business world reality check, Mr. May. Would you mind sharing any thoughts you may have on Mr. Katzenberg's comments?

 

[Shane Martin]

Laserdisc lasted a long long long time so It's not such a big deal if it's a niche. I'm ok with that. It's less like J6p's demands will get met

Discs are way cheaper in HD compared to Laserdisc so it's a cheaper niche to belong to.

 

[Alistair_M]

Criterion released onto laserdisk and that was a niche format that did fine for videophiles in its time.

I think warners totalhd format would be perfect for a company like criterion - they can release on both formats using one disk, and all I care about is getting criterion quality transfers in high def. I would have thought that the combined userbase of hd-dvd and bluray would be fine for criterion to make a decent profit. I'd buy several dozen of their catalogue in high def!

Hope Criterion start releasing their superb catalogue later in 2007. Any news on criterion in high def? They need to start sooner rather than later as it will take several years of solid releasing before their whole catalogue would be available to collectors. Dreaming about Brief Encounter Criterion, Andrew Rublev, Fanny and Alexander, If..., In the Mood for Love, A night to remember, Picnic at Hanging rock, Ran, Rebecca, Red Shoes, Seven Samurai, Spartacus, Third Man, Yojimbo and so many more in 1080 res, and with the criterion stamp of quality and care.

 

[Sam Davatchi]

I HOPE, I HOPE that it becomes niche, what's the problem with that? No one would longer ask me to borrow my BDs!

 

[ToddJ]

He probably said the same thing about DVD.....

 

[DaViD Boulet]

The downside to a "niche" is that then we'd always be worried that a particular title we wanted wouldn't be produced for HD, or that it would be released long after the usual "window" for consumer-market media like DVD.

That was the problem with laserdisc. Want a movie? Well, it was out on VHS. But often you'd be stuck waiting months (or years, or forever) for the laserdisc release.

 

[willyTass]

ur wish is granted!!

 

[Robert Crawford]

Yet, the chance is still there that HDM remains a niche market.





Crawdaddy

 

[JohnPhi]

no, there are still two formats, dvd and blu ray. This will be a much tougher fight

 

[bigluigi]

Did you see Beowulf in 3D? I have to admit I was greatly impressed...not with the movie, but with the technology. Toward the end when those arrows came flying toward you I instinctively ducked. And no headaches!!!
Twice during the last 5 years I was really impressed with advances in movie technology and that was The last Star Wars film shown in digital form and Beowulf. Combine those two technologies and you got a real winner on your hands. Maybe Beowulf was digital come to think of it.