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post #1 of 9 Old 01-15-2007, 11:33 AM - Thread Starter
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Hardware vs. Software

Can BD dominate without cheap hardware? can HD DVD dominate without extensive software (content)?
These are the questions that will be decided in 2007. IMHO Christmas 2007 will be the deciding point for these formats.

HD DVD always had the price advantage. Even when both technologies were nothing but paper dragons HD DVD (then AOD) was argued as the more cost effective solution. Launching the format with a $499 player was a masterful move by Toshiba. The truth is $499 is simply still too much for 95%+ of Americans.

Let's take a look at DVD player pricing:
Code:
 Year     Units Avg. Price HH% 
 1997       349  $489    0.00%
 1998     1,079  $390    1.00%
 1999     4,072  $270    5.00%
 2000     8,499  $201    13.00%
 2001    12,707  $165    21.00%
 2002    17,090  $142    35.00%
 2003    21,994  $123    50.00%
 2004    19,990  $108    70.00%
DVD player sales started out a paltry 300K units and prices around $500. Moving price down to $390 allowed the market to expand 300% to over million units. Dropping the price again to the $200s quadrupled the market to 4 million units sold in 1999. 2000 was another record year with the avg price slipping to $201 (meaning some players down into the $149 price range) and another doulbing of annual sales. After that the % growth slowed indicating lower prices were not necessary to push sales.

Would DVD have grown even with a more modest price reduction ($500, $400, $350, $300, $250)? Yes it would however it is unlikely we would have seen the massive growth that led to mass adoption.

The cheapest standalone player is $499 for HD DVD and $799 (announced) for BD. Both of these are too high. DVD tripled once it hit a sub $400 price and quadrupled when it hit sub $300. I don't think HD will be any different. The PS3 is the wild card but for many Americans it is a non starter. There are simply millions of Americans who will not buy a PS3 as their HD player. While some will many won't.

If prices and content stay the same I see BD winning simply because year after year it's library will grow larger. So HD DVD needs one or more studios to switch. Time is on BD side they "win" with the status quo. What will make a studio switch? Massive sales. 2:1 advantage is nice but 2:1 over a market that makes up 1% is nothing to get the studios excited. Now a $299 player and 20x increase in players would make the numbers more meaningful. The first title to sell 1 million copies on a format would be a huge milestone. If the title was dual released and one side sold 1 million and the other something like 300K that would be very telling.

So the way I see it the big question is:
How fast and how low can HD DVD bring prices down? If it is "soon" enough and low enough for J6P they win. If they don't BD wins and it takes much longer to reach mainstream. It would be possible for BD to kill HD DVD and remain a niche product like Laser Disc until something mainstream comes along in 5 years.
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post #2 of 9 Old 01-15-2007, 12:02 PM
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Originally Posted by namechamps View Post

If prices and content stay the same I see BD winning simply because year after year it's library will grow larger.

If prices stay the same neither will be victorious. Both will go under or the way of DVD-A and SACD. The first to provide sub $300 players will win. As soon as those <$300 players start flying off the shelves, studios will go neutral and I believe the other will fold. The larger studio support is meaningless without there being players in homes. J6P doesn't know which studio made his favorite movies and probably will not investigate to find out, nor should he have to. So content isn't going to mean much unless both BD and HD DVD have equal quality cheap players available. At that point, content would decide their fate.

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post #3 of 9 Old 01-15-2007, 12:50 PM
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Excellent read namechamps.

I'd say that we're going to require sub $200 players before a winner can be announced.

Content vs Hardware is a chicken/egg scenario. Critical mass must be reached with players. Consumers will wait for more content they're used to. By end of 2007 there will be 500 HD DVD titles. If you couple that with sub $300 players you have an effective strategy for attacking the recent HDTV purchasers. I believe content is important but not enough for people to start spending $500 and more for a player.

My mother is a Tivo lover and runs her own Law practice. When I told her the Tivo HD was $799 she was like "count me out". EVERYONE has their price limits.

HD DVD has to be at $300 for some players by years end. And hopefully these will come in at $249 on sale for Black Friday deals and Xmas shopping.
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post #4 of 9 Old 01-15-2007, 02:26 PM
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Can BD dominate without cheap hardware? can HD DVD dominate without extensive software (content)?

Show me 200 BD titles i can buy right now, and then i'll accept the argument BD has more content than HDDVD, but as it stands HDDVD has sufficient content now and comming in the future to bring mass adoption, thanks to having the support of the three largest studios and many niche studios.

Quote:


J6P doesn't know which studio made his favorite movies and probably will not investigate to find out

Very true. I'm not even aware who makes/distributes the movies i'm interested in.

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post #5 of 9 Old 01-15-2007, 02:35 PM
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Quote:
Originally Posted by namechamps View Post

Hardware vs. Software

Can BD dominate without cheap hardware? can HD DVD dominate without extensive software (content)?
These are the questions that will be decided in 2007. IMHO Christmas 2007 will be the deciding point for these formats.

HD DVD always had the price advantage. Even when both technologies were nothing but paper dragons HD DVD (then AOD) was argued as the more cost effective solution. Launching the format with a $499 player was a masterful move by Toshiba. The truth is $499 is simply still too much for 95%+ of Americans.

Let's take a look at DVD player pricing:
Code:
 Year     Units Avg. Price HH% 
 1997       349  $489    0.00%
 1998     1,079  $390    1.00%
 1999     4,072  $270    5.00%
 2000     8,499  $201    13.00%
 2001    12,707  $165    21.00%
 2002    17,090  $142    35.00%
 2003    21,994  $123    50.00%
 2004    19,990  $108    70.00%
DVD player sales started out a paltry 300K units and prices around $500. Moving price down to $390 allowed the market to expand 300% to over million units. Dropping the price again to the $200s quadrupled the market to 4 million units sold in 1999. 2000 was another record year with the avg price slipping to $201 (meaning some players down into the $149 price range) and another doulbing of annual sales. After that the % growth slowed indicating lower prices were not necessary to push sales.

Would DVD have grown even with a more modest price reduction ($500, $400, $350, $300, $250)? Yes it would however it is unlikely we would have seen the massive growth that led to mass adoption.

The cheapest standalone player is $499 for HD DVD and $799 (announced) for BD. Both of these are too high. DVD tripled once it hit a sub $400 price and quadrupled when it hit sub $300. I don't think HD will be any different. The PS3 is the wild card but for many Americans it is a non starter. There are simply millions of Americans who will not buy a PS3 as their HD player. While some will many won't.

If prices and content stay the same I see BD winning simply because year after year it's library will grow larger. So HD DVD needs one or more studios to switch. Time is on BD side they "win" with the status quo. What will make a studio switch? Massive sales. 2:1 advantage is nice but 2:1 over a market that makes up 1% is nothing to get the studios excited. Now a $299 player and 20x increase in players would make the numbers more meaningful. The first title to sell 1 million copies on a format would be a huge milestone. If the title was dual released and one side sold 1 million and the other something like 300K that would be very telling.

So the way I see it the big question is:
How fast and how low can HD DVD bring prices down? If it is "soon" enough and low enough for J6P they win. If they don't BD wins and it takes much longer to reach mainstream. It would be possible for BD to kill HD DVD and remain a niche product like Laser Disc until something mainstream comes along in 5 years.

Good analysis.

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post #6 of 9 Old 01-16-2007, 04:23 PM
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DVD player sales started out a paltry 300K units and prices around $500.

1) where they 500$ I remmeber them a bit more
2) it was closer to 320k unist sold. It also does not include drives and was for the US alone
2) I would not call it paltry 200$ HD DVD add ons and 500$ HD DVD players coulkd not even come close to it in units sold
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post #7 of 9 Old 01-16-2007, 04:30 PM
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can you tell us how close Blu-ray standalones came?
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post #8 of 9 Old 01-16-2007, 06:48 PM
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why is number of BD players relevent? the comparison was HD DVD vs DVD
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post #9 of 9 Old 01-16-2007, 07:03 PM
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Quote:
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why is number of BD players relevent? the comparison was HD DVD vs DVD

Because HD DVD and Blu-ray are vying to be the replacement of DVD.
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