Who benefits, who loses with Dual-Format players?

[Innerloop]

Here's my thinking - I would be interested to hear what others think on this.

I think ultimately a dual-format player hurts HD-DVD's long-term chances to "win", but gives them a higher chance of at least persisting in the marketplace in a smaller form.

The problem is that PS3 is not going to change to a dual-format player, so as more and more PS3s sell (and even the most pessimistic estimates are tens of millions of units), the most Blue-ray only players exist in the marketplace.

I think once LG hits the street with a HD/BD player, sales of Toshiba standalone players will dry up fast unless the cost difference is massive. It just wouldn't be smart to take the hit on title availability just to save $100-$200 on a player. So Toshiba is a big loser here.

I don't think BD really wins or loses here. They gain by getting more players in the marketplace and more consumers that wouldn't otherwise join in will feel safer doing so, so it broadens the HD market overall.

In a way this is a good way for HD-DVD to "save face" and lose without really losing. Only the most hard-core studios (Universal?) will continue to release HD-only discs because why leave out the potential customer base of 10m PS3 owners? I don't think media costs are the biggest factor in chosing a format, however much MSFT wants to spin that as a big deal. COGs will go down on both formats to the point where its a negligible part of the retail price.

I wonder if Toshiba or Sony would ever release a dual-format player?

[rdjam]

I think it is more likely to hurt the Bluray format, here are my thoughts: http://www.hdnowonline.com/Comment_U...l_Players.html

Mainly, it is priced the same as single format Bluray players that are weak on features - $999 and above.

Whereas, the low-end market is being dominated by $200 HD DVD drives for PCs and Xbox'es

[William]

The consumer wins. Who cares (except fanboys) which format becomes dominant (certainly J6P doesn't) since you will be able to play any disc. Remember LG is just opening the flood gates. Hopefully just about all players will be universal in a couple of years.

[heavyharmonies]

Originally Posted by William

The consumer wins. Who cares (except fanboys) which format becomes dominant (certainly J6P doesn't) since you will be able to play any disc. Remember LG is just opening the flood gates. Hopefully just about all players will be universal in a couple of years.

My thoughts exactly.

[JosephShaw]

First, this is absolutely a win for the consumer, provided the player is reasonably priced.

Secondly, a dual format player may not help or hinder BD, but it does emphasize the BD camp's exclusive studios and their content libraries. Paramount and Warner are a non-issue since they already support both formats, though Warner is going to be playing catch-up on the BD releases they already have for HD-DVD. But until Dreamworks and New Line start releasing stuff on HD-DVD, that just leaves Universal and their back catalog, since they haven't had many hits in the last few years.

[Jackinbox]

Mainly, it is priced the same as single format Bluray players that are weak on features - $999 and above.

Whereas, the low-end market is being dominated by $200 HD DVD drives for PCs and Xbox'es

Once again, another post comparing apples and oranges.

You guys just won't stop with the "$1000 players" stuff even though hardly anyone on this forum paid $1000 for their BD player.

[kjack]

Originally Posted by rdjam

I think it is more likely to hurt the Bluray format, here are my thoughts: http://www.hdnowonline.com/Comment_U...l_Players.html

Actually, I'm getting curious what the moderators think of you advertising your web site here so much.

[kjack]

Originally Posted by rdjam

Mainly, it is priced the same as single format Bluray players that are weak on features - $999 and above.

What if the 2G BD players are introduced about the same time this becomes available?

[golfnz34me]

Here's how it is going to play out:

Only people who already own BR or HD players lose, because they will likely need to buy another player soon if they want to be able to watch any movie.

Consumers win. This is not a debatable point. With a dual-format player available the consumer can now buy a player and not have to care about the disk format.

Sales of stand-alone BR and HD players will dry up FAST.

In the long run the only studios who will be making BR movies will be the exclusives. The agnostic studios will switch to HD-DVD due to the lower production cost, and will not release movies in both formats. (The possible exception might be for really long movies which need the larger disc space.)

Long term BR is the loser because of it's higher production cost. But both formats will certainly survive.

This is what will happen. Bank on it.

Mike

[kevivoe]

I would imagine that the cheapest disk to manufacture will rise to the top with a dual format player. After all, if a studio thought the market was now open to all users, why not maximize profit by using the cheapest disk to manufacture?

[GMan4911]

Originally Posted by joshd2012

Unless someone can point to an article stating current production costs for each format, this "cheaper to produce" crap has got to stop.

This ArsTechnica article is dated Sep 2005:

The Blu-ray Disc Association (BDA) has long asserted that its Blu-ray (BD) format is superior to the rival HD DVD format, and BD’s "revolutionary" buzz has understandably caught the fancy of certain technologists. But CEOs should be wary, because what the BDA does not sufficiently address is what lies behind those assertions. The numbers are stark: manufacturing BD discs will require an estimated US$1.7 million cost per manufacturing line. Per line!

Then, each major manufacturing facility would require the implementation of a minimum of two mastering systems, at a minimum cost of US$2 million per system. DVD, at the height of its success, resulted in an estimated 600 manufacturing lines globally. Even allowing for a decline in systems costs over time as the manufacturing base expanded, the tab for radically overhauling the media manufacturing industry would approach a billion dollars worldwide or more. Already-beleaguered CFOs will be challenged to raise—and risk—this significant amount of capital.

Compare this to the estimated cost of retooling for the HD DVD format compared to BD. HD DVD is able to utilize virtually the entire existing manufacturing infrastructure. The cost of upgrading an existing DVD line is about US$150,000—less than a tenth the cost of a BD line. A DVD mastering system can be upgraded for US$145,000. Basically, HD DVD is a DVD-9—a version of DVD we have enormous manufacturing experience with already—with a denser pit structure.

[smkstang1]

Originally Posted by joshd2012

Unless someone can point to an article stating current production costs for each format, this "cheaper to produce" crap has got to stop.

As was stated in the other thread: The burden of proof rests on you, to prove that BD Media has come down in price to where HD DVD media is.

Sony admitted from the beginning that the Media costs more to produce. That is an obvious disadvantage.

If the prices are now the same, then Sony would probably hold a ribbon cutting ceremony to announce that clearly, now, BD is the superior format. Sony is known for their arrogant publicity stunts.

I have not seen any bright lights, so I will safely assume the obvious. BD costs more to produce.

No pun intended Josh...

[tranzparentl]

I think the consumer loses, a Universal Player will never be as cheap as a stand alone player. If the battle took an extra year but ended with a clear winner the consumer would be better off.

[b.greenway]

Originally Posted by kjack

Actually, I'm getting curious what the moderators think of you advertising your web site here so much.

Says the "Director (of) Product Marketing" for Sigma Designs all in good fun, just found the comment a bit ironic from a marketing director.

[SamIam2]

Actually, I think that the only one who loses in this scenario are (us) the early adopters ...

Sony/Blu Ray does not lose because it retains rights to proprietary titles and promotes it through their global "Sony Lifestyle" policy.


Toshiba/HD DVD does not loose because the format survives with the advantage of rights to proprietary titles, and a stronger hold on the lower end for value added pricing (if present trends continue)

J6P does not loose because he was smart enought to wait for a refined and universal solution that makes his recreational viewing a "one stop shop".

So, issues on dominance and or monopoly aside, the only ones to really lose over this are us.

... but hasn't that always been the case?

Sam

[diogen]

Originally Posted by kjack

Actually, I'm getting curious what the moderators think of you advertising your web site here so much.

I think it's OK.
The crippled logic in some of the reports "from the frontline" on that site offers a break from the dense discussions on this site.

Diogen.

[swgiust]

The consumer wins. The average Joe doesn't want to be told
that his new player won't play some kind of disk. The price of a
dual format player will come down. So price will not be an issue.
Actually price will never be an issue, because if EITHER format
is to survive they must have a $ 299 or less player. And in two
years, they both will.

[Innerloop]

Originally Posted by joshd2012

So what this means, is that the studio support of today remains. Those who only purchased HD DVD before will be forced to buy Blu-ray and vice versa.

I suspect, however, that a current PS3 owner, who has access to (at the moment) 80%+ of available content, will not be as motivated to run out and buy another standalone dual player. especially if they are a more casual purchaser/renter of discs.

So studios have to consider - should they release a film on BD in order to capture that additional (large) number of potential customers, or do they save $0.50 per disc stamped and potentially lose the wider potential customer base?

In a strange way, flooding the market with subsidized Blu-Ray only PS3 units has innoculated the BD format against this threat, I think. It will be a hard sell to convert those PS3 owners (or even some of the standalone owners, as few as they are) to re-invest simply to get access to one studio's content.

I agree that the current installed based of standalone BD players are a non-issue - its a small number in absolute terms and not a very price-sensitive market, so those people will be relatively easy to convert to dual-format customers with a decent player. But PS3 people seem "stickier" and harder to convert to dual-format customers.

[skogan]

Originally Posted by joshd2012

Unless someone can point to an article stating current production costs for each format, this "cheaper to produce" crap has got to stop.

Talkstr8t, A BD insider, recently admitted as much. If I go through the trouble of finding the post, will that satisfy you?

[skogan]

Here it is, the main point was something different, but you can clearly see, by inference, that he accepts the fact that it is currenly more expensive to manufacture BD disc.

Originally Posted by Talkstr8t

Analysts have predicted that the new methods invented to replicate Blu-ray discs (PTM, if I recall correctly, but this isn't an area of expertise for me) have promise in eventually reducing costs below that of red laser DVD. Even if they don't go that far, it's certainly plausible that Blu-ray media costs will closely enough approach those of HD DVD that retail costs will be unaffected.
- Talk

(Emphasis added)
http://www.avsforum.com/avs-vb/showt...&&#post9368880

[Innerloop]

Originally Posted by skogan

Here it is, the main point was something different, but you can clearly see, by inference, that he accepts the fact that it is currenly more expensive to manufacture BD disc.


(Emphasis added)
http://www.avsforum.com/avs-vb/showt...&&#post9368880

There's as much said there to refute your claim as their is to support it. If I re-posted it with the emphasis on the first part of the sentence, would that then convince you that it will be cheaper? Seems like you're picking and choosing which points you accept and reject a bit too precisely.

I agree with the overall sentiment made by Talk here though - there are a lot of things that affect the COGs of a product - whether or not you add an insert or do 2-sided printing on the sleeve insert, or which type of plastic case you use, etc. The disc stamping cost is just one small part of this.

If as you assume studios always choose the absolute lowest-cost to manufacture, then we'd see them selling discs in cardboard sleeves with no printed inserts, but since we don't (an in fact we see studios printing with considerable more expensive styles like chrome/reflective printing, etc.) clearly squeezing every penny out of the COGs is not yet their top priority.

Years from now when discs are selling for $9 at Target, then we'll see some price sensitivity to the COGs.

For me a bigger question is - if Warner presses a dual-format discs, they will have to pay the per-disc licensing costs twice to many/all of the license holders, which will definitely significantly add to the costs, since my understanding is that those fees are a more significant burden.

[tsd2005]

Originally Posted by Innerloop

Here's my thinking - I would be interested to hear what others think on this.

I think ultimately a dual-format player hurts HD-DVD's long-term chances to "win", but gives them a higher chance of at least persisting in the marketplace in a smaller form.

The problem is that PS3 is not going to change to a dual-format player, so as more and more PS3s sell (and even the most pessimistic estimates are tens of millions of units), the most Blue-ray only players exist in the marketplace.

I think once LG hits the street with a HD/BD player, sales of Toshiba standalone players will dry up fast unless the cost difference is massive. It just wouldn't be smart to take the hit on title availability just to save $100-$200 on a player. So Toshiba is a big loser here.

I don't think BD really wins or loses here. They gain by getting more players in the marketplace and more consumers that wouldn't otherwise join in will feel safer doing so, so it broadens the HD market overall.

In a way this is a good way for HD-DVD to "save face" and lose without really losing. Only the most hard-core studios (Universal?) will continue to release HD-only discs because why leave out the potential customer base of 10m PS3 owners? I don't think media costs are the biggest factor in chosing a format, however much MSFT wants to spin that as a big deal. COGs will go down on both formats to the point where its a negligible part of the retail price.

I wonder if Toshiba or Sony would ever release a dual-format player?

HD-DVD is less expensive to manufacture in both hardware and software.

So if you're a Studio Exec you would think:

If Dual Format players cost a relatively modest amount and are equal to or cheaper than BD, then the Dual Format will take off. However the majority of players sold will always remain the cheapest option. This was true with VHS/Beta and is true with HD-DVD/BD (120,000 to 25,000).

The PS3 enters into the equation only in the sense that it helps form a market it will NEVER DOMINATE THE MARKET . In fact it appears to be backfiring. I talked to a President of a major CE today that currently makes BD machines. They are leaning towards a Dual Format player and dropping the BD player. They are even open to releasing a HD-DVD player as soon as they can do so in the $300 range MSRP.

Right now 1,040,000 players w/PS3 considered can't outsell 300,000 HD-DVD players in Software.

The PS3 gives BD a 1M boost in possibly used players, but they aren't equal to a standalone, and that has been proven dramatically by sales numbers .

So the Dual Format player at some point will dominate the market, but only truly effect it soon if:

1. The DF player is priced aggressively against BD players. If it's the least expensive BD Player (PS3 doesn't count), it could have an effect. It would steal BD sales in an amazing way. These stolen BD player sales result in another HD-DVD player on the market.

2. The DF player offers good PQ and AQ. If it's a quality unit, sales will again steal from the BD player market.

The longrun will be effected if:

1. DF drops in price to be common consumer friendly. This means a DF player for $300 or less.

2. The DF player remains aggressively priced against the BD camp. If the BD camp falls into common consumer friendly prices and so does the DF, then they make a good strong case for buying DF.

Now how does the overall market deal with the introduction and possible proliferation of DF players?

1. HD-DVD will boom because of it. Today it means that if priced at $1,000 to $1,200 as is rumored now by some news sources... the DF will technically be stealing BD player sales. Why spend the same for a BD player when you can get BOTH!?!? So a possible BD Exclusive customer becomes a DF customer. HD-DVD gains on this.

2. As DF becomes more mainstream and drops in price, the HD-DVD machines will likely drop into the "cheap," range and players will be found between $100 and $300, and be bought by the masses. As long as the DF stays aggressively priced with BD players, the HD-DVD machines will be the cheapest, while DF the best value.

Cheap always seems to win. More LCDs than Plasmas, More VHS than Beta, more iTunes than CDs, etc. HD-DVD will gain a large portion of the market while the rest will be primarily DF. The PS3 will level off and be considered an afterthought to the format, but basically make up for the horrible BD player sales.

In the end we may see a very evenly split market in terms of numbers, but software will lean towards HD-DVD.

Studios will start releasing in the most profitable format.

Today that is HD-DVD. That could change. By the time DF truly makes a big dent it could be a wash.

[Jackinbox]

Years from now when discs are selling for $9 at Target, then we'll see some price sensitivity to the COGs.

Nonsense. Remember how DVD-9s were substantially more expensive to replicate than DVD-5s back in 1998? There are tons of DVD-9 titles in the $6 bin at box stores. Over time, it will all pretty much even out.

[dialog_gvf]

Originally Posted by kevivoe

I would imagine that the cheapest disk to manufacture will rise to the top with a dual format player. After all, if a studio thought the market was now open to all users, why not maximize profit by using the cheapest disk to manufacture?

Maybe Warner needs to be let in on this logic. Their history of HD disc plans:

1) HD on DVD-9
2) HD DVD-15 exclusive
3) HD DVD-30 exclusive
4) HD DVD/DVD combos + BD discs
5) HD DVD/BD combos

Gary

[wreckshop]

1. HD-DVD will boom because of it. Today it means that if priced at $1,000 to $1,200 as is rumored now by some news sources... the DF will technically be stealing BD player sales. Why spend the same for a BD player when you can get BOTH!?!? So a possible BD Exclusive customer becomes a DF customer. HD-DVD gains on this.

first of all, it's highly unlikely that a DF player will ever be cheaper than a BD standalone. the CE manufacturer will have to pay 2x licensing fees along with the extra harware costs for supporting 2 formats.

second, why would DF players be considered "stealing" sales away from BD, and not hd dvd? one could just as easily say "why not spend a bit extra over an hd dvd player and get a DF format player instead?"

third, even if DF players ARE cheaper then standalone BD players, what makes you think people won't be buying them simply to use as a less expensive BD player? dual format player is still a BD player.

fourth, what makes you think ANY of the BD exclusive studios will switch over to releasing on hd dvd if DF players become the standard? the only benefit that hd dvd has in a dual format world is disk replication cost, which it seems is not high up on their list of priorties relative to the other benefits that BD provides. otherwise these studios would be releasing on hd dvd, right?

finally, despite what you think, people watch movies on their PS3. even if its only a measly 10%, that would be 5million BD only users when there are 50million PS3s sold. do you really think studios will ignore those BD only players?

[quikric]

Originally Posted by William

The consumer wins. Who cares (except fanboys) which format becomes dominant (certainly J6P doesn't) since you will be able to play any disc. Remember LG is just opening the flood gates. Hopefully just about all players will be universal in a couple of years.

I agree in part here.I dont consider myself a fanboy of either format,ok I've been leaning more twords HD DVD do too the consistantly higher qulity, and yes I know Blu is starting to catch up here finaly,but as long as quality is at its best I can deal with either format winning,and I too see universal players as a very good thing.
I also believe that j6p could care less at this point about either format,and untill prices come way down on the hardware plain old SD DVD is still just fine with them.

[rdjam]

Originally Posted by joshd2012

Unless someone can point to an article stating current production costs for each format, this "cheaper to produce" crap has got to stop.

OK...

Originally Posted by mikemorel

Wicked Pictures, ClubJenna join Digital Playground in producing HD DVD.

CES - HD DVD gets boost from adult film industry

"It's a lot less expensive to use HD DVD," said Jackie Ramos, vice president of DVD production at Wicked Pictures, at the Adult Entertainment Expo in Las Vegas, which runs parallel with the International Consumer Electronics Show.

And yes, I absolutely agree that the consumer is the winner with dual-format players...

[rdjam]

Originally Posted by diogen

I think it's OK.
The crippled logic in some of the reports "from the frontline" on that site offers a break from the dense discussions on this site.

Diogen.

Thanks for visiting!

[Jeff Lampert]

MY .02 cents. If there are only two-format players, the format war is irrelevant. Why should anyone even care? I would expect all studios to go neutral, but NOT in the way most people think.

The studios won't make two authorings for each movie. That would be unneceessary and make no sense. However, the studios would very likely have the option of using any of HD15/HD30/BD25/BD50 (and maybe even HD51/BD100) along with any codec to author any given release. The disc format, size, and codec chosen would be determined by business decisions such as availabily of replicators, cost of replication, making a single disc vs. a two-disc set, licensing fees, the color of the box, etc. etc. Whichever set of parameters results in the best profit for the studio (along with other possible requirements liek time to release) will be how they choose to release their movie. In that sense they wil be neutral. I would not see any reason for any allegiance to one format or the other.

As far as consumers go, the only consumers at a disadvantage will be some video enthusiasts. In the current format war scenario, they are actually able to exercise some control over the outcome they prefer (as is evidenced by the insiders in AVS, as well as numerous mentions in publications of the influence of early adopters). If there are dual-format players, then the enthusiasts won't have much control. They can say they want VC1 on BD50 all they want, but if the studio feels they will do best with mpeg2 on HD15, there's not much one can do about it except not buy the release.

[mrsmith]

Originally Posted by golfnz34me

Here's how it is going to play out:

Only people who already own BR or HD players lose, because they will likely need to buy another player soon if they want to be able to watch any movie.

Consumers win. This is not a debatable point. With a dual-format player available the consumer can now buy a player and not have to care about the disk format.

Sales of stand-alone BR and HD players will dry up FAST.

In the long run the only studios who will be making BR movies will be the exclusives. The agnostic studios will switch to HD-DVD due to the lower production cost, and will not release movies in both formats. (The possible exception might be for really long movies which need the larger disc space.)

Long term BR is the loser because of it's higher production cost. But both formats will certainly survive.

This is what will happen. Bank on it.

Mike

I, for one, would NOT bank on it.

Until recently I thought that B/R would ultimately win because of the higher storage capacity and studio support, even though I bought a used HD-DVD player on the cheap as a good quality upcon machine for now or later. My thinking has changed in the last week or so because of these important developments that may make all of this academic:

1: The PORN industry(of all people) is going with HD-DVD for cost reasons, just as they did for various reasons decades ago with VHS; this is a $14-BILLION dollar industry that turned the tide away from Beta in the '80s.

2: It appears that these cost factors(#1 above) really are a driving force both as to the players and to disk reproduction.

3: A 51-gig triple layer HD-DVD disk from the Toshiba camp due later this year as announced at CES.

4: Resurfacing problems with scratched BluRay disks due the fact the data is so close to the surface.

5: A staggering $1,199 MSRP for LG's dual-format player. How many will pay this or close to it?

6: NetFlix announcement released today that they would be offering an initial count of 1,000 titles via the ubiquitous hi-speed internet, with many more to come. Translation: disks will ultimately yield to VOD - and that from the company that pioneered DVD-via-mail. If the ultimate hi-def quality is similar to that now found on CBS/NBC/ABC for films, you can forget the current generation of hi-def disks which at best are so-so. NetFlix seems to be looking at a 3-year window.

My complaint has always been that the hi-def optical disk formats just weren't all that good, but now events may have surpassed all of that anyway. My guess is now that HD-DVD/BluRay will now only be an interim product pending VOD, but if it's going to be any disk for a while at all, it'll be the 1-terabyte format which in theory would allow storage of holographic 3-D images.

Going to be interesting to watch.

Enjoy!

Milt R. Smith
mrsmith2002@yahoo.com