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Ah, Blu-ray, We Hardly Knew Thee: Death of Sony's HD Technology

Someone might argue that it's early for a headstone, but the signs are clear: Sony's scheme to own a video format has crumbled. All the money, all the time, all the effort, all for nothing. Between burdensome pricing, consumer indifference, and significant competition, the end is probably already written and the market is just coasting, waiting for the knell and the pall.

Back in September I noted how Blu-ray was actually losing market share to regular DVDs and said that Sony was being smacked about by price elasticity. This only proves that sometimes I'm not dour enough. Robin Harris over at ZDNet's Storage Bits, has called a 12 month Blu-ray death spiral and pointed to some compelling reasoning to back that up, including the following:

  • You can't count on a Blu-ray disc to play on every player. That alone should be a game stopper.
  • High quality authoring systems run $40,000, meaning that many producers of video content won't spend the money.
  • Reproduction of discs runs $3.50 each -- in thousand-unit volume. Short runs are $20 each.
  • The digital rights management system costs thousands up front, then $1600 a "project" plus four cents a disc. Want to use the Blu-ray logo? It costs $3,000 a year.
The Blu-Ray Disc Association might as well send out a mass mailing to video producers, pleading with them to avoid the standard. Then there are the consumers. The players have cost too much, and people don't seem to care about not getting high definition. Here's my guess at the problem: lots of people own HD television sets, but have no idea how to get the feature to work and probably haven't shelled out the extra money for cable or satellite HD content. If they cared that much about video quality, you'd have seen consumers over the years demanding that television networks do everything in film, not in video, because the difference between the two is noticeable. But they simply don't care.

Retailers are cutting Blu-ray player prices now:

Entry-level Blu-ray players have dropped to below $230 at major retailers including Target Corp., Wal-Mart Stores Inc. and Best Buy Co. Some experts predict that promotional prices may fall below $150 on Black Friday, the big shopping day after Thanksgiving. Earlier this year, most Blu-ray players retailed for $400 or so.Sales picked up at Best Buy after prices were cut, said Mike Mohan, Best Buy's senior vice president of consumer electronics. Still, he said, some consumers may not understand the benefits of the technology, which can offer crisper images than standard DVDs when viewed on high-definition TVs. "We have a job to do in explaining to customers why Blu-ray is important," Mr. Mohan said.

Another impediment to Blu-ray adoption: The price of Blu-ray discs, at about $30, is still often twice that of DVDs.

Right. And what's the low end for DVD players? About $30 for Best Buy's private label Insignia brand, or $35 for a Philips. So even if the Blu-ray players drop to that $150 point for the entry level machine, that's still five times more than DVD entry level plus the titles are twice as much.

Meanwhile, on the real high definition front, Netflix is streaming HD to Xbox 360s and Royal Digital Media has released a 100GB capacity disc able to record programming in 1920p resolution. If you hear a banging sound rising out of the east, it's either the last nails going into the Blu-ray coffin or the responsible Sony executives applying their foreheads to the nearest brick edifice. Telling the difference may be impossible.

Car wheel image via Flickr user Luciano Meirelles, CC 2.0.

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