Sony won the Blu-Ray battle, but did they win the war? (1 Viewer)

[Kevin Collins]

While I was deeply in the HD DVD trenches during the epic format war, the fact of the matter was that Sony paying off Warner and Fox to change the tipping point and end the format war. Thus consumers never did make a choice, the choice was made for them by "big money".Sony just warned shareholders to expect poor financial results for its fiscal year ending March 31, 2014. They were previously expected to pull in an operating income of $782M over the fiscal year, but adjusted that figure down to $254M.The sharp reduction — the new operating income estimates are 68 percent down from a February forecast — can be attributed to a pair of somewhat unexpected events. The first is due to Sony selling off it's PC division. The second is due to what Sony calls "demand for physical media contracting faster than anticipated." Sony says it does not believe the business will generate "sufficient cash flow in the future to recover the carrying amount of long-lived assets." It anticipates an impairment charge on those assets, and a second charge on the overall value of its disc manufacturing business, which will amount to $245M.Winning the Blu-ray battle required heavy investment from Sony, an investment that it expected to recoup with years of strong sales. Instead of the market moving from DVD to Blu-ray, consumers began to embrace downloads from Apple's iTunes service and streaming from sites like Netflix and Hulu. With the rise of movie streaming and downloads, Sony is now accepting that its disc business is not worth as much as it hoped.While it pains me to see Sony in this predicament, it wouldn't have mattered what format won the HD optical disc war as either would have been in this same predicament.This makes one wonder how long we will get to continue to enjoy Blu-ray discs. With the folks that are happy to believe they are getting quality 1080P over streaming (soon to be conned into 4K), it might not be that much longer before the optical disc business turns into the laser disc business. Sad days potentially ahead, but it seems like the inevitable fate that the CD had with digital media.What are your thoughts? You saw this coming years ago? You are scared about the potential impact on BD movies? Or you just plan on moving to streaming because you hate keeping a huge library organized... []

 

[Ejanss]

While I was deeply in the HD DVD trenches during the epic format war, the fact of the matter was that Sony paying off Warner and Fox to change the tipping point and end the format war. Thus consumers never did make a choice, the choice was made for them by "big money".

Yeah, you SOUND like an old HDDVD'er from W-day: "Sony must've bribed them!"
(Because that's something HD would never do, right? )

The fact was it wasn't so much that Sony won, as that Toshiba lost:
HD was temporarily in the lead, as having Warner in its corner gave it the image of being the "film buff's" format, while Sony was making a fool of itself trying to sell action movies and Will Ferrell comedies to their Playstation gamerz crowd. Sony didn't "win the war", Disney and Steve Jobs won it for Sony, when Sony didn't know how.
But what little goodwill HD had managed to earn was quickly evaporated by Toshiba's determination to stay in the game as a chronic gadfly, despite the big Transformers bombshell ("No room for AUDIO??"), and the fact that the lone holdouts of studios numbered two and a half.
Universal was being boosted by Microsoft, Paramount had to take Toshiba's bribe to pay for their Star Trek restoration, and Warner?--Warner was stringing Toshiba along like a cheap hooker. They implied they were going to support both formats, just as long as it took them to develop that "hybrid disk" that was going to end the war, and when that never materialized, bye-bye HD.
If you ever wondered how the first Hitler video ended up on YouTube, those who were following the war back then GOT THE JOKE. (And Toshiba was certainly acting like the last half hour of Downfall.)

Come to think on it, seems I remember the whole "Disks are dying anyway!" rumors first came out of Microsoft, when they realized that just because they'd lost the battle didn't mean they'd lose the War...

 

[Ejanss]

While it pains me to see Sony in this predicament, it wouldn't have mattered what format won the HD optical disc war as either would have been in this same predicament.

(Although I don't see Toshiba trying to force unwanted 4K sets down our throats...)

 

[Keith Cobby]

No streaming for me. If the blu-ray format has another 5 years of (some) growth I hope that most of my favourites will be out by then.

 

[Jari K]

Kevin, Blu-ray was introduced in 2006. It's 2014 now. Blu-ray is actually a pretty old format by now. People can dug up "numbers" from 2006 and try to compare them to the "numbers" in 2014, but I'm not quite sure is that the wisest thing to do.

And if Sony really lost money by introducing Blu-ray, then what the other camp (HD DVD) lost since their format already died a long time ago. At least Blu-ray has been alive for 8 years now.

 

[Eerik Paal]

While I was deeply in the HD DVD trenches during the epic format war, the fact of the matter was that Sony paying off Warner and Fox to change the tipping point and end the format war. Thus consumers never did make a choice, the choice was made for them by "big money".

You obviously still are in HD DVD's trenches. Toshiba had exclusive support from Universal, exclusive titles from Warner Bros. Where do you think that came from? Toshiba bribing Paramount was confirmed in Viacom's earnings report, I have not seen any firm evidence of Sony bribing studios (not saying it did not happen).

 

[Matt Hough]

I always assumed that Blu-ray held the advantage via the PS3 with its built-in Blu-ray drive. It was my first Blu-ray player (and I was not a gamer), and Sony sold a couple of million of those in the first year which compared to about 250,000 HD-DVD machines sold. With that kind of solid base and their exclusive studios of Sony, Fox, and Disney, they did seem to have quite a few assets in their corner to fight with.

 

[Rick Thompson]

This makes one wonder how long we will get to continue to enjoy Blu-ray discs. With the folks that are happy to believe they are getting quality 1080P over streaming (soon to be conned into 4K), it might not be that much longer before the optical disc business turns into the laser disc business. Sad days potentially ahead, but it seems like the inevitable fate that the CD had with digital media.]

CDs are gone? Then what are those round silver-color things with music on them that I've been buying? Have CDs been superseded now by those round vinyl things? What are THEY????

 

[jcroy]

While it pains me to see Sony in this predicament, it wouldn't have mattered what format won the HD optical disc war as either would have been in this same predicament....
What are your thoughts? You saw this coming years ago? You are scared about the potential impact on BD movies? Or you just plan on moving to streaming because you hate keeping a huge library organized... [ ]

Almost a decade ago when I first heard about bluray and hd-dvd, what initially turned me off from them was when I first read about the AACS drm system which used the AES encryption algorithm. (AES is what the government uses for encrypting some classified information). There are no easy known ways to directly crack the AES algorithm. In contrast the dvd css drm system was completely cracked thoroughly.

At the time, I mistakenly thought that nobody would buy a system that they couldn't crack easily. I was hoping and praying that bluray and hd-dvd would both completely fail straight out of the door.

At the same time, I also mistakenly thought that dvd would be like the "cockroach" of the physical media niche, outlasting any subsequent formats like bluray, hd-dvd, etc ...

 

[jcroy]

Have CDs been superseded now by those round vinyl things? What are THEY????

(This may be completely anecdotal).

Every time I shop at one of the few remaining record stores in town or at thrift shops (such as goodwill, etc ...), I notice the type of individuals going through the vinyl bins and actually buying records, look like 20 year olds.

 

[Jason_V]

The fact of the matter, for me, is that BD and HD DVD both "dumbed down" their "cool" factor by dropping disc prices to absurd levels very quickly. If you want to maintain your niche product, you don't start giving it away. You have to make it a luxury item. Yes, you have less units being sold, but those that sell are more expensive. The minute everyone and their brother could afford a BD player, discs and an HD TV, that signaled game over.

Now it's just a rush to get as many discs into the market as possible before consumers fully turn their attention (stupidly, IMHO) to streaming.

 

[bruceames]

At the same time, I also mistakenly thought that dvd would be like the "cockroach" of the physical media niche, outlasting any subsequent formats like bluray, hd-dvd, etc ...

It may not outlast Blu-ray, but DVD shows sign of being around just as long. Four out of every five new titles released on disc is exclusive to DVD (about 10000 titles per year vs. 2000 for Blu-ray).

Toshiba may have "lost" the format war, but if the real war was about future royalties, then Toshiba didn't make out so bad after all. DVD's are in approximately 90% of every SKU sold (when you factor in combo discs), and account for two thirds overall revenue. That kind of resiliency is something that no one would have predicted and certainly Sony and those sharing in BD royalties certainly had higher expectations than Blu-ray peaking at only $2.5 billion (U.S.) DVD's peak was nearly six times higher, at $14 billion (higher if you consider inflation).

But it is what it is and now we have Digital HD and streaming becoming the new strong growth areas. Hopefully Blu-ray will be with us a long time in spite of the shifting tide.

 

[Traveling Matt]

I'm with Rick: I bought three CDs last month, all unavailable on any other format. Discs will continue to recede in popularity, but they're not going anywhere. They're a specialty item and will remain so, even if releases eventually cease. DVDs and Blu-rays will get to where CDs are now, though in their case I suspect it will come not from competition but rather when most viable titles have been released (a point we seem to be getting to rapidly, if we aren't mostly there already, and a condition rarely mentioned in these kinds of discussions). That would have been their fate regardless of whether Blu-ray came out earlier or if downloads/streaming were less popular than they've become.

Will everyone get rid of their movies on disc? No, they're hard copies and provide what must now be thousands of hours of extras unavailable elsewhere (another condition rarely mentioned). The collectability factor also seems a little different than with CDs, plus people seem to be aware titles disappear more frequently in the bigger business of movies.

It will be like other forms of old media: they'll coexist side-by-side with the new so all audiences are satisfied.

 

[ahollis]

I held off on making a decision on which format to support until there was a clear path on what format was going to survive. We know today that there certainly is not room for two formats and there wasn't then. One had to go.

 

[jcroy]

I held off on making a decision on which format to support until there was a clear path on what format was going to survive. We know today that there certainly is not room for two formats and there wasn't then. One had to go.

Same here.

Though I held off even longer, until blurays were starting to show up in the $5 dump bins. When the bluray versions were the same price or sometimes even less than the dvd versions, it became a no brainer to start buying blurays.

 

[Vic Pardo]

I have a Blu-ray player, but very few Blu-rays (around two dozen), compared to thousands of DVDs. Most of the Blu-rays I buy are Japanese pop music concerts and only when the Blu-rays offer extra material (e.g. more musical numbers) not found on the DVD. They're pretty damned expensive, too.

 

[MatthewA]

If vinyl couldn't go away completely, what makes people think Blu-ray will? Even if it doesn't reach the heights of DVD (people aren't consuming like they used to), I'm sure it will be around for years to come, and specialty labels will pick up the slack from studios where catalog titles are concerned.

 

[jcroy]

The fact of the matter, for me, is that BD and HD DVD both "dumbed down" their "cool" factor by dropping disc prices to absurd levels very quickly. If you want to maintain your niche product, you don't start giving it away. You have to make it a luxury item. Yes, you have less units being sold, but those that sell are more expensive. The minute everyone and their brother could afford a BD player, discs and an HD TV, that signaled game over.

Back in the day, I thought laserdiscs and projection tv sets had an extremely high "cool" or "elite" factor.

Fast forward to the present day, the initial 4K tv screens and 4K "puck" players don't seem particularly "cool" or "elite".

 

[Jason_V]

I guess it depends on who you are. 4k would be a cool item for someone who is interested in it. Others might want the newest Mustang...and that's cool to them. (It's not to me, for the record.)

 

[ahollis]

Back in the day, I thought laserdiscs and projection tv sets had an extremely high "cool" or "elite" factor. Fast forward to the present day, the initial 4K tv screens and 4K "puck" players don't seem particularly "cool" or "elite".

I used to check out the $5 bins of Laserdiscs at Tower, Virgin, Incredible Universe and laser stores. They always had RKO and Universal titles, also a few MGM. I tended to look for the classics for anything that was released in the past 6 years at that time was pan-scan. I picked up a lot the Universal Horrors that way.Really for me nothing has been as cool as laserdiscs though I have embraced DVDs and Blu-rays to the fullest. But the Lasers I still have, I treasure.