Katzenberg: HD is a Niche (1 Viewer)

[Duncan Harvey]

Do these numbers include on-line sales?

Also, what proportion of HD discs are sold in places like Walmart, which IIRC the survey does not cover.

I've imported over 130 discs from the USA, and I suspect many other UK based enthusiasts have done the same, so I cant really believe sales are so miniscule.

A niche yes, no denying that.

 

[Marc Colella]

This is an excellent point and something I've been saying for a while now.

I purchased an HDTV because I knew my DVDs (with progressive scan DVD player) would like great on it. To this day I still think it looks incredible, and I'm pickier than the average consumer on video quality. The average consumer has an older 20-30" set and an HDTV will be a tremendous upgrade in video quality with their current DVD collection. They aren't even thinking of HD content.

Another reason they're buying HDTV's is that "bigger is better". Before HDTVs were released people would call them "big screens", and even though they're not calling them that now - the size is a definite factor. I know people who purchased a 60" widescreen over a better quality brand 50" simply because it was bigger. Optimizing quality isn't a concern to them since almost any HDTV will be an upgrade in quality anyways. The members of this forum are examples of people who look to get the best quality possible, and we are in the definite minority.

The HD-DVD and Blu-Ray groups are in for a rude awakening if they still think the average consumer will be jumping on their formats. Backers of each format will be losing a lot of money. Sony will be the biggest losers in all this as they've sacrificied a nice share of the console market simply because they included a Blu-Ray player in the PS3 to try and win what appears to be a niche market. They'll soon realize that they made a huge mistake.

 

[Norman Matthews]

I have to agree with Marc and Alistair in their skepticism that more HD sets sold necessarily translates to proportionally higher hi-def sales. On another message board I frequent that has nothing to do with home theater or even movies in general, the topic of HD television sets came up. In an informal poll of the thread, just over 20 posters owned an HD set (it's obviously not a very big board). As the conversation continued, it turned to hi-def content, and a subsequent poll revealed that fewer than half of those people with HD sets were actually receiving any hi-def content for their TVs, be it cable or satellite! They loved their sets for DVDs and video games and that was good enough for them. The extra 20 bucks or so a month to get hi-def channels from their cable company just didn't seem worth it to them. And if they're blanching at 20 bucks a month for everything that's available on HD cable, I can only imagine what happens when they look at the prices for hi-def players and discs, if they even look at all.

I think both these formats have a much longer haul ahead of them than many of the enthusiasts here would like to admit to themselves.

 

[Vincent_P]

HAPPY FEET only sold one copy? Things are getting even worse!



Seriously though, I'm sure that was an error on the part of whoever compiled that original list, but I have to agree with Alistair- those numbers are really bad. Given the cost of mastering High-Def discs alone, not to mention the pressing of the discs themselves, these numbers are pretty abysmal. And for a fan of cult films like myself who was hoping companies like Anchor Bay might take the plunge, numbers like these make this seem highly unlikely.

Vincent

 

[Cavan.B]

Good post Alistair. I agree on all your points; the average consumer doesn't care enough at this point (and may never) to make the jump. Even when prices fall to reasonable levels, they may just stick with tried-and-true DVD. I am sitting the war out mainly because of cost, but the dueling formats and uncertainty of longevity are also a concern. If that's enough to keep me out, then the average Joe will not give it a second thought.

 

[Alistair_M]

The next argument often mentioned by the marketting guys for hd-dvd or blu-ray is that the hardware prices are stopping the mass market move to high def.

Well I think thats another bogus story in that in the UK, where everything consumer electrical is always at a ripoff price - you can buy a hd-dvd player for £270 which to most UK consumers is very standard and would not seem expensive, they are not selling well - nothing like mass market. The Xbox360 addon is £129 and is also viewed to be an inexpensive consumer item here in the uK and its also not selling highly. These are prices that mainstream consumers in the UK would not walk away from if it was something that they felt was worth having in itself. The PS3 is priced at £425 and that is viewed as expensive. I think there is a pychological barrier when spending over £300 on something electrical in the UK, so its seemed as pretty expensive.

But generally, certainly for hd-dvd the prices are not expensive.

But its not selling in high quantities. Because...people just don't see enough of a difference to change the movie watching system that they are now used to .. ie dvds on standard and upconverting dvd players.

I can't see how changing the prices etc is going to make much difference, unless the prices go really low. But then all profit for the consumer electrical companies eg panasonic, etc would go out of the window.

Catch 22 for blu-ray/hd-dvd supporters I think. You can't get mass market without losing all your profits! But if you keep prices so that you get a decent profit - you don't get enough of a market to sell to.

Catch 22 for the studios. The people want you to release lots of your catalogue, but there's not much profit in doing so as the sell numbers are low. Also as you release product, your high def 1920x1080 masters are being cracked and copied on the internet. So do you keep releasing more and more to try and make the market for high def bigger, or will high def fail anyway, meaning no big sales, and all your masters will be on the net decrypted and re-encoded by the hackers and pirates, so you would lose your control of the crowned jewells of your top movies!

Anyway.. back to our normal scheduled programming.... in standard def

 

[Dave Mack]

It's not just HD downloading, there's streaming which doesn't require any waiting or computer. Our Comcast has a bunch of free HD films you can watch instantly like "The Crow", "Escape From New York" and believe it or not, the quality is not bad at all. Maybe not BD or HDdvd quality but WAY beyond SD. Sure between the new films that they charge for and the freebies there is only maybe 40-50 HD films available now but that will I'm sure increase.
Once again, instantly. I want to watch The Crow or The Quick and The Dead tonite in HD, click, there it is.

 

[Douglas Monce]

I honestly think that as soon as you see Blueray or HD-DVD players in Walmart for under $150 you'll start seeing the sales number going up. Frankly the first year of DVD wasn't much different.

I spent the first 3 or 4 years of owning a DVD player explaining to people what it was and how it worked. People would ask, "DVD whats that? It looks like a CD." But as soon as players dropped under that magic $200, and were available in Walmart, suddenly everyone had one.

Doug

 

[Duncan Harvey]

Alistair - I dont agree that they dont see enough difference. Frankly I suspect that 99.9% of them simply havent seen any HD at all and hence wouldnt be able to make a valid comparison at all.

Currys have been showing (stretched 4:3 of course) upscaled DVD on their HD ready sets for much of the last 2 years, and of course, it looks exactly the same as SD because thats what it is!

The only real HD I've seen in shops has been a distributed Sky HD signal in a Sony shop and a couple of PCs showing HD content off hard disc in Comet.

If you watch the BBC HD channel and compare it to SD then you'd have to be blind not to notice the difference. I dont "buy" upscaling one little bit - all this does is make an SD signal look "ok" on an HD set, it certainly doesnt add detail.

But frankly the UK market is so backward that HD is pretty much irrelevant over here. Which is why my HD-DVD and BD kit is all sourced from the US. Whilst the US of course will have tens of millions of people who are totally indifferent to HD (maybe hundreds of millions), the niche in the US is still large enough to have critical mass. Something which the UK simply doesnt have.

 

[Marc Colella]

However that's not an apples-to-apples comparison.

DVD was a HUGE leap from VHS. Right off the bat DVD offered so much more than what VHS offered. The advantages were numerous and right there in your face.

What does Blu-Ray/HD-DVD offer over DVD? Better picture quality... that's it essentially. Hell, even the physical disc looks the same.

The small improvement in PQ (in the average consumer's opinion) isn't enough reason to abandon their current DVD collection and spend more money on expensive players and discs. This is even harder to do when you realize that the DVD format has only been for 10 years, and most of the average consumers bought into DVD within the last 4 or 5 years.

Buying in is too much to ask of the average consumer... and they aren't biting.

 

[Douglas Monce]

All true but, if the average person finds that they can pick up a high def player that can also play their standard DVDs for not much more money than a good quality DVD player, I think you'll see them start to move off the shelves.

Doug

 

[Marc Colella]

That's under the assumption they don't have a DVD player already, otherwise a HiDef player requires further investment that they may not want to make. Add to the fact that they're used to discount-bin type pricing for DVDs and would have to spend more money for HD content.

Over time the price of HiDef players and content will drop, but DVD players and movies will always be cheaper. HiDef will have a hard time selling enough players/movies to be able to bring their costs down to DVD levels - since DVD will remain the default video format.

 

[Jim_K]

What is the U.S. household penetration of HDTV's? Compare that to the penetration of both standalone HD/BD players and PS3/360 add-ons and you'll come up with a much more telling market penetration of these formats. I'd be very interested in seeing such data.

Comparing HD/BD software sales against SD-DVD sales is meaningless. Did anybody really expect the growth rate of these formats to exceed HDTV adoption?

Does anybody realistically expect the average Dee-Vee-Dee buyer to run out and pick up a HD/BD player for the improved PQ on their standard definition tv?

HDTV is a "niche" so of course these HD software formats would be the same.

 

[Vincent_P]

Which is why these formats might die thanks to the very expensive authoring costs. If the studios can't even recoup their mastering costs (and I don't see how they can when in many cases they're selling less than 1000 copies of a title), how long do you think they'll keep supporting these formats? What about the indie labels like Criterion or Anchor Bay? I don't see them spending $50,000 to author a title for HD disc if they can only expect to move a thousand or so units. So what does that leave us? Nothing but mainstream, Hollywood titles? No thanks.

Vincent

 

[RickER]

That didnt stop the LD market. LD had about a million and a half players in the US, or so i read, in the 25, or so, years it existed. I had many titles that only sold 7 or 8 hundred, or less. Of course the price of an LD was about $30-$40 for a single platter (cept FOX was much higher), and up to about $100 for the mega box sets (again FOX was higher). Those were prices in the 80s and 90s! Those exact same boxsets were about $25 on DVD. It just means the prices of HD discs wont be going as low as DVD, but they still beat the prices of LDs back in the day!
Shoot they beat the price of VIDEO TAPE back in the day.

 

[Jim_K]

How exactly do you know the studios aren't recouping their costs? Is there a cost of mastering a title when they already strike a HD transfer for the SD anyway?

Where are you getting your $50k estimate per title?

If not it only comes down to the cost of replication and packaging.

Do we know the cost of replication?

I'll admit I'm not privy to the figures but I'm sure the studios know and I'm pretty we wouldn't be seeing any upcoming releases on these formats if the studios were bleeding money on them.

A lot of assumptions being made here.

 

[Cees Alons]

That's much too early to say.

Even if the comparison wasn't apples to apples, the break-through of DVD (which was a huge step forward) came much later. So when you argue that HD DVD won't have the same impact (in 2 or 3 years), you cannot conclude that from the current sales figures.

Personally, I think HD will get some real momentum after a significant amount of HD TV-sets have been sold.

And in the meantime, I myself enjoy the huge improvement I get, PQ-wise and audio wise, of HD (and my SDVDs upconverted), whether the products I'm buying are supposed to be part of a niche market or not.


Cees

 

[Douglas Monce]

Yes but most people have a DVD player they paid under $100 for. Replacing it isn't really that big a deal IF, and it is a big if, they can see the advantage of buying a new player that will play their existing DVD collection AND the new advanced high def discs. This is really a matter of the powers that be selling the public on the advantages of high def.

They seem to have already sold them to some extent on the TVs. In the forth quarter of 2006 more than 3.2 million flat-panel HDTV were sold according to Pacific Media Associates. Thats the forth quarter alone. So there are quite a few HDTVs out there ready for a high def player.

Doug

 

[RickER]

I know a number of people with widescreen sets that watch their pan and scan DVDs in stretch or zoom mode! When i have told a few what they are doing, well, they dont care.

 

[Douglas Monce]

I didn't say they would know how to view them correctly....I just said they might buy them. Frankly most people don't care if they are doing it right, but never underestimate the "keeping up with the Joneses" effect.

Doug