Monday July 6, 2009 – Stewart Wolpin
DVD hardware makers and Hollywood studios have pinned their hopes on Blu-ray to revitalize the whole home theater and pre-packaged media market.
They should be prepared for disappointment.
Even before the economy tanked, DVD was sliding down the razor blade of product commoditization. DTC believes that the entire non-PC DVD hardware category will dip 18% this year, buoyed only by the slightly growing portable/automotive market.
By contrast, only 5.7 million Blu-ray players will be sold this year, which represents only 4% percent of the total DVD market. And that's taking into account the increased inventory of Blu-ray titles, heavily-promoted new Blu-ray player brands such as Vizio, an increasing number of Blu-ray players that can stream online content, and shrinking Blu-ray hardware prices, which could conceivably dip below $100 by year-end.
Source: DTC
The picture for Blu-ray gets increasingly fuzzy five years hence, when DTC believes the high-definition disc format will have to compete with a growing internet download and streaming market already being overwhelmed, like the music business, by downloads and streaming.
Blu-ray's boomlet is blocked by another thin barrier: HDTV ownership. Most consumers without at least a 50-inch HDTV will pass on a Blu-ray deck. HDTV household penetration, although growing, is only a small slice of the worldwide TV market. It's not that people don't like a higher quality picture. It's just that they'll choose a different way of getting it. In other words, it's not about the product, it's about human behavior.
Take my own home, for example. While mindlessly channel surfing, my wife will happen upon a movie she likes and start watching it, even if the film is half over, even if it's constantly interrupted by commercials, even if it's not even in high-def (oh, the shame) and pock-marked with ShamWow pitches, it doesn't matter. I gently suggest we could watch the film from the beginning commercial free and in high def on Blu-ray, or even just standard def on DVD. Nah, she says, I'm fine.
I'm sure she's not the only sofa spud who would rather lump than load. Even I, so cinematically holier than thou, will record a movie to the HD DVR I find on HD cable for later 1080i viewing, even though I already own said movie on Blu-ray or DVD. And I'm sure I'm not alone and most viewers choose to watch from the HD DVR or just plain non time shifted and scheduled HD programs – most cable, satellite and telco systems now offer nearly 100 or more HD channels – over playing in on a Blu-ray or DVD player because it's simply way too much trouble to hunt down the disc, boot up the player, find the player remote, and switch the receiver or HDTV to the proper output. It's just easier to hit LIST and PLAY on the always handy cable remote.
It is this La-Z-Boy behavior that will eventually doom Blu-ray to little more than a niche market.
