- 24 June 2006
- 8,604
August 16, 2006
Format Wars: The First Six Weeks
File this one under the no-real-shocker heading but some retailers are already reporting that in the first six weeks HD DVD and Blu-ray were available to consumers, neither set any new sales records. It’s a bit odd to even report on what everyone and their brother predicted as a given but there are some interesting comments and figures that came to light in a recent Video Business new window article.
During the fourth annual HDTV conference, new window Buying Group’s David Workman characterized the launch of both formats as “the worst execution that’s happened in the industry” and “There’s a format war going on, and we need correct software support. So it has been stacked up to create failure… It’s a race to see who can string the tightest noose [around their format].”
Ken Crane’s CEO Casey Crane and Bjorn’s president Bjorn Dybdahl went as far as stating: “employees were embarrassed delivering store demonstrations of the first batch of Blu-ray films.” and “Staffers could discern little distinction between the discs and their standard-definition counterparts”.
Again, at the risk of beating a dead horse, many insiders knew there would be technical difficulties surrounding the launch of both formats. As such handicapping a horse race that could potentially last for years by the first six weeks of sales for both formats, is an exercise in futility. However I did find one figure in the article particularly noteworthy.
Ross Young founder and president of DisplaySearch cited NPD Research new window which claims “in the first six weeks of sales for each technology, 33% more HD DVD players were sold than Blu-ray players”. And “At steeper pricing, Blu-ray players, however, churned out 42% more in revenue.”
Putting those two figures into perspective is important. The Samsung player at $999 generated more revenue than the Toshiba players at $499 and $799 respectively, which of course comes as no surprise; the more expensive product generated more revenue. The important part as well all know however is format penetration.
HD DVD (the HD-A1 and HD-XA1) launched on April 22nd where the Samsung BD-P1000 hit retail stores as early as June 15th even though the official launch was slated for 25th. So any way you slice it the HD DVD players had about a seven week head start with early adopters
And of course as we know, early adopters bought the players (to some degree) as evident in Amazon sales ranks. Now the interesting part is that HD DVD player sales in the first six weeks of launch outsold Blu-ray players in their comparative launch period by 33%. new window I would have expected Blu-ray’s launch to have attracted enough early adopters to minimize HD DVD’s head start, that doesn’t seem to have occurred.
Studios care about market penetration not revenue generated by player sales, so according to at least one independent research firm, HD DVD already has a 33% installed base advantage that studios could base future software sales on. Will they? Of course not, its way too early in the process for long term forecasts
The PS3 will undoubtedly play a part in the overall installed base of the Blu-ray format but we fully expect the HD DVD camp to counter with new players and incentives in the coming months. Just how attractive those new players and incentives are to consumers however, of course remains to be seen.
So what does the NPD Research really tell us? Not a whole lot in the grand scheme of things but I think it’s reasonable to assume poor Blu-ray transfers and the negative buzz surrounding the Samsung BD-P1000 played a large part in these numbers. The real question is how fast and to what degree can the BDA get things back on track before HD DVD reaches an installed-base tipping point that would make Blu-ray’s recovery unlikely, that my friends is the multi-billion dollar question.
ΠΗΓΗ
Format Wars: The First Six Weeks
During the fourth annual HDTV conference, new window Buying Group’s David Workman characterized the launch of both formats as “the worst execution that’s happened in the industry” and “There’s a format war going on, and we need correct software support. So it has been stacked up to create failure… It’s a race to see who can string the tightest noose [around their format].”
Ken Crane’s CEO Casey Crane and Bjorn’s president Bjorn Dybdahl went as far as stating: “employees were embarrassed delivering store demonstrations of the first batch of Blu-ray films.” and “Staffers could discern little distinction between the discs and their standard-definition counterparts”.
Again, at the risk of beating a dead horse, many insiders knew there would be technical difficulties surrounding the launch of both formats. As such handicapping a horse race that could potentially last for years by the first six weeks of sales for both formats, is an exercise in futility. However I did find one figure in the article particularly noteworthy.
Ross Young founder and president of DisplaySearch cited NPD Research new window which claims “in the first six weeks of sales for each technology, 33% more HD DVD players were sold than Blu-ray players”. And “At steeper pricing, Blu-ray players, however, churned out 42% more in revenue.”
Putting those two figures into perspective is important. The Samsung player at $999 generated more revenue than the Toshiba players at $499 and $799 respectively, which of course comes as no surprise; the more expensive product generated more revenue. The important part as well all know however is format penetration.
HD DVD (the HD-A1 and HD-XA1) launched on April 22nd where the Samsung BD-P1000 hit retail stores as early as June 15th even though the official launch was slated for 25th. So any way you slice it the HD DVD players had about a seven week head start with early adopters
And of course as we know, early adopters bought the players (to some degree) as evident in Amazon sales ranks. Now the interesting part is that HD DVD player sales in the first six weeks of launch outsold Blu-ray players in their comparative launch period by 33%. new window I would have expected Blu-ray’s launch to have attracted enough early adopters to minimize HD DVD’s head start, that doesn’t seem to have occurred.
Studios care about market penetration not revenue generated by player sales, so according to at least one independent research firm, HD DVD already has a 33% installed base advantage that studios could base future software sales on. Will they? Of course not, its way too early in the process for long term forecasts
The PS3 will undoubtedly play a part in the overall installed base of the Blu-ray format but we fully expect the HD DVD camp to counter with new players and incentives in the coming months. Just how attractive those new players and incentives are to consumers however, of course remains to be seen.
So what does the NPD Research really tell us? Not a whole lot in the grand scheme of things but I think it’s reasonable to assume poor Blu-ray transfers and the negative buzz surrounding the Samsung BD-P1000 played a large part in these numbers. The real question is how fast and to what degree can the BDA get things back on track before HD DVD reaches an installed-base tipping point that would make Blu-ray’s recovery unlikely, that my friends is the multi-billion dollar question.
ΠΗΓΗ