View Full Version : Will retail push back against video download hardware?


Evan_H
04-01-08, 11:04 AM
Major retailers like BestBuy sell both video players and video disks, therefore I predict those retailers will promote disk-based formats over and above download devices.

Hardware sales drive software sales. Over time, many people spend more money on the software than the hardware. Just look at video games: retailers sell video game consoles near cost, and make their money back through game and accessory sales. By pushing Blu-Ray players, retailers can expect to make many additional sales of Blu-Ray disks in the future. However, after a store sells a download device (AppleTV, Vudu), the store is cut out of all the movie sales that will follow.

Therefore, I expect retail chains like BestBuy will promote Blu-Ray this Christmas 2008 shopping season. Although they may sell download devices, I doubt we'll see any bundled with televisions or on the front page of their fliers like Blu-Ray players.

I could be wrong, after all, retailers promote MP3 players. However, I think they were more naive when they allowed the iPod to take root. Since then, they've watched their audio CD sales decline, and I'm sure they don't want the same to happen to their video disk sales.

nineteen70
04-01-08, 01:00 PM
Some Best Buy retailers already sell VUDU machines they are going where the money is.If Downloading services become big Best Buy will enter the game.

oldschl
04-01-08, 01:06 PM
Circuit City pushed DIVX discs heavily...we know where that technology went. It's not the retailer but the consumer. We dictate what they sell - if there is a market, retailers online and brick-and-mortar will come up with a product to meet the demand.

The perfect example is the transitions from CD's to downloadable music. At one time, they were planning (and some actually came out) music on DVD format. People didn't see the need, and flocked toward the convenience of downloadable music versus buying music off the shelves.

With XBox Live being a hit, we may see more and more downloadable content straight to the console and cutting out the middle-man. The producer sees more profit at the expense of the local retailer.

mikemorel
04-02-08, 08:17 AM
I could be wrong, after all, retailers promote MP3 players. However, I think they were more naive when they allowed the iPod to take root. Since then, they've watched their audio CD sales decline, and I'm sure they don't want the same to happen to their video disk sales.Retailers also sell TiVos, which allow consumers to record HD video presumably *in lieu of* buying physical media. This is really no different.

Future download boxes may (or may not) include BD drives, if consumers are willing to pay the premium. Remember "managed copy"?

Retailers would be naive to think that they can force the market in one direction or the other. They might be able to slow it down a bit, but only if they work in concert with one another. And that is illegal, isn't it (at least in the US)?

Rutgar
04-02-08, 08:28 AM
Retailers would be naive to think that they can force the market in one direction or the other. They might be able to slow it down a bit, but only if they work in concert with one another. And that is illegal, isn't it (at least in the US)?

I believe it's only illegal if it's a proovable attempt to price set or squash competition. Otherwise they can work together all they want. Especially in regards to standards and universal specs, etc.

mikemorel
04-02-08, 08:30 AM
One other note:

Just as sales of digital cameras meant the death of film sales for retailers, it gave rise to sales of digital memory cards (CF, SD, etc.) in increasing memory sizes.

Similar to this, sales of download boxes will give rise to sales of external storage devices (HDD and SSDs).

mikemorel
04-02-08, 08:31 AM
I believe it's only illegal if it's a proovable attempt to price set or squash competition. Otherwise they can work together all they want. Especially in regards to standards and universal specs, etc.
All it takes is one retailer to put these boxes on sale at an attractive magin and that whole theory falls to pieces.

Rutgar
04-02-08, 09:13 AM
One other note:

Just as sales of digital cameras meant the death of film sales for retailers, it gave rise to sales of digital memory cards (CF, SD, etc.) in increasing memory sizes.

Similar to this, sales of download boxes will give rise to sales of external storage devices (HDD and SSDs).

As has been pointed out, that only happened because the public went that direction. Of course digital photography offered many advantages over film based photography. And once the level of quality wasn't an issue, digital was a no-brainer.

However, the quality simply isn't there yet on D/L and VOD compared to BD. Which still gives BD a huge advantage at this point.

mikemorel
04-02-08, 09:58 AM
As has been pointed out, that only happened because the public went that direction. Of course digital photography offered many advantages over film based photography. And once the level of quality wasn't an issue, digital was a no-brainer.And downloads offer many advantages over physical media. ;)

For one, you can keep all your stuff in one place - movies, home video, photos, music, etc. All accessable with the touch of a remote.

However, the quality simply isn't there yet on D/L and VOD compared to BD. Which still gives BD a huge advantage at this point.Oh, so you are arguing for BD instead of downloads. I get it.

You are really grasping at straws. First you insinuate that retailers will somehow band together to block the sale of download boxes, then when that doesn't work, you say it won't matter because downloads don't have as much quality. :rolleyes:

1) What does the quality of downloads vs. BD have to do with the OP of this thread?

2) What do you know about the quality of downloads that will be offered six months or a year from now?

3) As with MP3/iPod, the average movie watcher cares not one bit about bit meters and lossless audio. They do care about convenience and a good picture and sound. Retailers care about selling electronics, and will gladly be there to sell the owners of these boxes extra storage, etc.

Rutgar
04-02-08, 11:10 AM
And downloads offer many advantages over physical media. ;)

For one, you can keep all your stuff in one place - movies, home video, photos, music, etc. All accessable with the touch of a remote.

We've had mass storage for years. The problem is there's never enough room for 'everything'. Sooner or later, something has to be deleted to make room for more. So disc media is still the easiest way to own and access a large library of films and TV shows.





Oh, so you are arguing for BD instead of downloads. I get it.

You are really grasping at straws. First you insinuate that retailers will somehow band together to block the sale of download boxes, then when that doesn't work, you say it won't matter because downloads don't have as much quality. :rolleyes:

1) What does the quality of downloads vs. BD have to do with the OP of this thread?

2) What do you know about the quality of downloads that will be offered six months or a year from now?

3) As with MP3/iPod, the average movie watcher cares not one bit about bit meters and lossless audio. They do care about convenience and a good picture and sound. Retailers care about selling electronics, and will gladly be there to sell the owners of these boxes extra storage, etc.

Quality has EVERYTHING to do with. What good is it to have access to something if the quality stinks? I'm not arguing FOR BD. I'm just acknowledging the fact that BD is currently the source of the highest quality audio/video available, at the most reasonable price and convenience. And for me, quality is the number one answer. Plus, I'm not saying that retailers will band together to block D/L'ds, so don't put words in my mouth. I'm simply saying that given the poor quality of D/L vs. BD, that BD is what the public will choose.

mikemorel
04-02-08, 11:46 AM
We've had mass storage for years. The problem is there's never enough room for 'everything'. Sooner or later, something has to be deleted to make room for more. So disc media is still the easiest way to own and access a large library of films and TV shows.That's the beauty of USB, just throw another TB on the box and viola, gobs more storage for music, pics, movies, home video, etc. Every month capacity goes up and cost goes down.

Quality has EVERYTHING to do with. What good is it to have access to something if the quality stinks? I'm not arguing FOR BD. I'm just acknowledging the fact that BD is currently the source of the highest quality audio/video available, at the most reasonable price and convenience. And for me, quality is the number one answer.That's right - for you. Then you should stick with BD. For others, getting 95% of the way there is good enough. Most have 720p or 1080i sets (or no HDTV at all). Most have HTiB surround audio (or no 5.1 at all). The point of this thread was "what will retailers do?" Mass market retailers sell to the masses. :)

Plus, I'm not saying that retailers will band together to block D/L'ds, so don't put words in my mouth. Well, that was the whole point of this thread, but...o.k. What is your opinion on what retailers will do, given that you said this?

"I believe it's only illegal if it's a proovable attempt to price set or squash competition. Otherwise they can work together all they want. Especially in regards to standards and universal specs, etc.


I'm simply saying that given the poor quality of D/L vs. BD, that BD is what the public will choose.We shall certainly find out, by Christmas, I'd say.

JamesDax
04-02-08, 01:59 PM
Not sure why retailers would try to block it since they are likely to be the ones to sell the hardware that would be needed to use these services.

Charles R
04-02-08, 05:15 PM
Just like with DirecTV if it becomes mainstream (to any extent) more than likely the retailer will also get a kickback based on (future) services rendered. I think they get roughly $150 (or more) from DirecTV per new installation. Comcast used to pay as well but in my area stopped (or refused to pay as much as DirecTV) and they were quickly removed from the sales floor. :)

My guess is Rhapsody (music streaming service) also offers a kickback since they assign the customer different account types based on where they came from.

Heck I even go the Best Buy to buy my iTunes gift cards and I'm sure they are making money on them. I purchase them there as it's a good way to redeem my Reward Zone certificates (for movie downloads).

So in the long run unless everything becomes order from the manufacturer the retailers will have to be rewarded enough to want to sell the product one way or another.

Charles R
04-02-08, 05:21 PM
I'm simply saying that given the poor quality of D/L vs. BD, that BD is what the public will choose.By 2012 music download revenues are expected to exceed retail sales. Is the public choosing quality for their music? Why would movies be any different?

Rutgar
04-02-08, 06:37 PM
By 2012 music download revenues are expected to exceed retail sales. Is the public choosing quality for their music? Why would movies be any different?

Charles, I've seen this argument before. And it's very valid with music (the proof is in the pudding). But movies are a totally different animal. People generally take an 'active' approach to movies. Meaning they sit in darkened rooms, and focus total attention on them. So the quality, or lack there of, becomes much more apparent. Music on the other hand is completely different. In some cases music listening is active, just as with movies. But in many, MANY cases, music listening is passive. Done in cars, at work, while puttering around the house, while working on a hobby, while jogging, etc, etc. So the quality isn't always as important with music, and often can get away with being 'dumbed down', compressed, etc. Not to mention it doesn't take anywhere near the physical bandwidth, storage capacity, and D/L time for music as it does movies.

Charles R
04-02-08, 07:12 PM
Charles, I've seen this argument before. And it's very valid with music (the proof is in the pudding). But movies are a totally different animal. People generally take an 'active' approach to movies. Meaning they sit in darkened rooms, and focus total attention on them. So the quality, or lack there of, becomes much more apparent.I disagree for one reason. I have a 1080p projector with a 110 screen and I have a 55 inch HD set (just replaced with a 61 inch DLP set). I purchased an Apple TV basically for music streaming but have watched a half dozen or so HD movies on it.

Now I would say I'm far more picky than your average consumer by a country mile. However I will say in my den and in the theater Apple's HD movies don't jump out at you as not being Blu-ray.

They look better than the worse Blu-ray transfer you have seen and worse than the best transfer you have seen. There are no motion artifacts and for some reason they have a lot of pop (contrast) even more than your typical Blu-ray movie.

This is with a low quality 720p image. Now I'm sure if you A/B studied images from both for hours you could spot difference after difference. But in the real world they both look good. To the point I don't think the average consumer could tell one from the other if you simply played five minutes of each in my theater not to mention my den with a much smaller image.

To my thinking content comes first followed by price with quality far behind both of them for the average consumer. Now I'm not saying Blu-ray isn't superior simply that other factors are much more important and the quality factor will have little or no affect on the success or failure of downloads.

Evan_H
04-02-08, 08:49 PM
Please, I did not create this thread to resurrect the old quality/convenience argument. That has nothing to do with retailers.

My original point is this: When a retailer sells a download box, they make one sale: the hardware. But when a retailer sells a Blu-Ray player, they make many sales: the hardware and perhaps a dozen movie disks in the future!

Here in Canada, BestBuy and FutureShop sell TiVo, AppleTV, and a media extender box; but I've never seen them actively promote them (except the very first week each was introduced). However, there's a Blu-Ray player on sale or bundled with a tv, advertised every week in their fliers! So, it appears to me that stores are promoting disk media over downloads.

Not everyone spends time reading about video devices and services on the internet like we do. Many people get their information from the stores they shop at. And if you look at the stores (at least BestBuy and FutureShop in Canada), Blu-Ray is big and download devices are almost non-existent. So, I do think that stores have the ability to influence what many consumers buy.

So, putting the above together: 1. stores are promoting Blu-Ray more than download devices, and 2. stores can influence some consumers, I think retailers really could have a negative effect on the consumer adoption of download devices.

Sailn
08-19-08, 03:45 PM
Getting back to the OP. I do not think retailers give a flying ( poke a goat ) about what they sell as long as they sell something. As CE is always changing, it seems foolish for the retailers to try disregard a present market for a possible future benefit. Since there are already displays which well exceed 1080p, why would you assume that current 1080p devices would be the end of the line? I can see the AVSFORUM posts in 5 years, "geez how can you only watch 1080p when everyone knows you really need a 4k display..."


The average ( whatever that means ) consumer will always buy what is easily available, and the big box stores are happy to sell it to them. If big box stores are still in business in a year, they will worry then.

jagouar
08-19-08, 03:54 PM
Getting back to the OP. I do not think retailers give a flying ( poke a goat ) about what they sell as long as they sell something. As CE is always changing, it seems foolish for the retailers to try disregard a present market for a possible future benefit. Since there are already displays which well exceed 1080p, why would you assume that current 1080p devices would be the end of the line? I can see the AVSFORUM posts in 5 years, "geez how can you only watch 1080p when everyone knows you really need a 4k display..."


The average ( whatever that means ) consumer will always buy what is easily available, and the big box stores are happy to sell it to them. If big box stores are still in business in a year, they will worry then.
agreed.... as long as you go there to buy their tv's, speakers, stereo equipment they dont care what else you buy.

My original point is this: When a retailer sells a download box, they make one sale: the hardware. But when a retailer sells a Blu-Ray player, they make many sales: the hardware and perhaps a dozen movie disks in the future!

a dozen movie discs amounts to what 300 bucks over multiple years? what about all the people who will never step foot again in that store for their movies (rent, netflix etc). retailers know their money is in hardware and warranties on that hardware.... everything else is gravy for them.

av.pallino
08-30-08, 11:04 PM
Retailers not supporting download hardware is playing into Apples hand. They are essentially becoming for download video what they are to music downloads - a virtual monopoly! Apple can sell their movies through itunes and can sell Apple TV through their own retail and online channels. The other competitors are not so fortunate.

Retailers would prefer an optical format to dominate the market, but even TVs are now connected to the net. I bet LG and Samsung are probably going to ship TVs that connect directly to Netflix. That would irritate the cable and sattelite folks then :)