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July 14, 2004
Chack's Naked Eye News and Video on San Francisco's Haight Street, tucked in a basement retail space next to a medical marijuana shop, is a film buff's paradise. He amiably rents the latest Tom Cruise and Star Wars films, but his eyes light up when a customer mentions an obscure Italian horror title or a Japanese samurai director.
For the last four years he has been replacing his videotapes with DVDs as quickly as he can afford, but has seen business tumble uncomfortably as customers have turned to alternatives such as Netflix, or have begun buying their own movies. Now he's looking at the impending release of new, high-definition DVDs with growing worry, leery of investing scarce dollars in either of two new formats before the market settles on one or the other.
"They would be crazy if they didn't agree on a format," Chack said. "They should have learned their lesson from Betamax."
What's new:
Two camps backing incompatible next-generation technologies--HD DVD and Blue-Ray--have as yet failed to agree on a way to unify their products, and studio executives increasingly say they're losing hope for an amicable compromise.
Bottom line:
Hollywood executives are counting on DVD sales to make up for slumping box-office receipts. A new format could breathe new life into those sales. But as long as the two formats remain at odds, few believe consumers will rush to open their wallets.
Chack is one of many businesspeople looking at the impending war over next-generation movie formats with growing anxiety. Echoes of the quixotic war between Sony's Betamax and the VHS format that ultimately replaced it remain high in the minds of everyone involved even loosely with Hollywood, a distraction that nobody wants to repeat.
But it may already be too late.
Hollywood studios have committed to releasing scores of high-definition DVD movies later this year. Two camps backing incompatible next-generation technologies, led respectively by Sony and Toshiba, have as yet failed to agree on a way to unify their products. They're still talking, but studio executives increasingly say--if only privately--that they are losing hope for an amicable compromise.
The timing could not be worse. Consumers' seemingly insatiable hunger for new DVDs may finally be diminishing. Executives at Dreamworks Animation and Pixar Animation Studios have each issued earnings warnings in recent weeks, blaming slower-than-expected sales of the movies "Shrek 2" and "The Incredibles."
Retailer Best Buy noted in its quarterly earnings statement last week that sales of DVDs, as well as CDs, had tumbled at the same time that video-game sales had grown by double digits. As with CDs, explanations abound for this phenomenon: The DVD market may finally be saturated, or studios are releasing too many movies too quickly, or maybe this latest batch of movies simply didn't resonate with consumers, analysts say.
Nevertheless, the apparent slowdown has shaken Hollywood executives, who are counting on DVD sales--already for the majority of their revenues in the United States--to make up for slumping box-office receipts. According to PriceWaterhouseCoopers, home video sales were $16.6 billion in 2004, up 15 percent from the previous year, compared with just $9.8 billion in ticket sales in the United States.
A new format could breathe new life into those sales. But as long as the two formats, called HD DVD and Blu-Ray, remain at odds, few believe that consumers will rush to open their wallets.
"If the PC market has taught consumers anything, it's that if there is not a standard, don't buy," said Gartner analyst Van Baker. "We really believe these things are going to fall flat on their face this Christmas season."
Clearer pictures, cloudy future
Home video has already provided the classic example of a format war, when the young VCR market saw Sony's Betamax tape format, the favorite of recording cognoscenti, square off against JVC's VHS. By the early 1990s, the VHS tape had become the standard for home use, in part because Sony had difficulty licensing its technology to other companies.
Both new formats, which have taken years to develop, offer vastly more storage capacity on single DVDs, a prospect that excites movie studios, game developers and other software makers. The formats use blue lasers, which have a shorter wavelength than the red lasers used in today's DVDs, allowing manufacturers to pack more data into the same space.
After that, the similarities diminish.
The Blu-Ray disc is backed by a large group of consumer electronics and computer companies. Offering 50 gigabytes of storage, it is the more substantial redesign of today's DVD structure. One of its biggest selling points is the fact that Sony has already committed to supporting it in the upcoming Playstation 3.
Blu-Ray backers say they can include a standard DVD on one layer of a multilayered disc, so high-definition and standard DVD content will be available without having to flip the disc.
The HD DVD format, backed by Toshiba and favored by a majority of
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reduced close outs ($7 to $15 per DVD), or the local pawn shops
($5 to $8 each). SOmetimes, I have to wait a month or so to get a
title through apawn shop, but I've got plenty of others to watch in
the meantime.
Maybe if the normal price dropped to $12 to $15, i'd buy more new
DVD's.
reduced close outs ($7 to $15 per DVD), or the local pawn shops
($5 to $8 each). SOmetimes, I have to wait a month or so to get a
title through apawn shop, but I've got plenty of others to watch in
the meantime.
Maybe if the normal price dropped to $12 to $15, i'd buy more new
DVD's.
I hated this with Beta and VHS, hated it again with the ridiculous amount of DVD writable formats, hated it further with the even more ridiculous number of flash formats, and this one is just as stupid. Personally, I blame Sony. I applaud them for their innovation, but they just seem to be uncompromising and never seem to want to get involved early with a unified format. Memory Stick, UMD, and now Blu-Ray are prime examples of coming up with a brilliant technology, but failing to bring everyone to them or making any effort toward compromise. Instead, people who love their technology end up painting themselves into a corner in terms of compatibility.
Don't take this as if I don't like the Memory Stick or UMD. I just believe it is Sony's fault that they can't get the support for their tech as the standard.
Companies backing Blu-Ray: Apple, Dell, Hitachi, HP, JVC, LG,
Mitsubishi, Panasonic, Pioneer, Philips, Samsung, Sharp, Sony,
TDK and Thomson
From Wikipedia:
HD DVD is promoted by Toshiba, NEC, Sanyo, and (most
recently) Microsoft, and backed by four major film studios.
I hated this with Beta and VHS, hated it again with the ridiculous amount of DVD writable formats, hated it further with the even more ridiculous number of flash formats, and this one is just as stupid. Personally, I blame Sony. I applaud them for their innovation, but they just seem to be uncompromising and never seem to want to get involved early with a unified format. Memory Stick, UMD, and now Blu-Ray are prime examples of coming up with a brilliant technology, but failing to bring everyone to them or making any effort toward compromise. Instead, people who love their technology end up painting themselves into a corner in terms of compatibility.
Don't take this as if I don't like the Memory Stick or UMD. I just believe it is Sony's fault that they can't get the support for their tech as the standard.
Companies backing Blu-Ray: Apple, Dell, Hitachi, HP, JVC, LG,
Mitsubishi, Panasonic, Pioneer, Philips, Samsung, Sharp, Sony,
TDK and Thomson
From Wikipedia:
HD DVD is promoted by Toshiba, NEC, Sanyo, and (most
recently) Microsoft, and backed by four major film studios.
about the bottom line. And HD-TV is a cheap screw option
compared to Blu-Ray. So go with HD-TV for the movies, and
provide dual mode (HD-TV and Blu-Ray) burners for data
storage (like the DVD+RW and DVD-RW burners now).
I want Blu-Ray for its data storage capacity. I want any format
that works for the HDTV movies.
It's time to fish or cut bait.
And cost will dominate,as far as I can see
HD-DVD. I think Microsoft is backing it, aren't they? Tsk, tsk, they always go with such horrible formats. If Windows Media is any indication in their decisions, HD-DVD is not the way to go!
about the bottom line. And HD-TV is a cheap screw option
compared to Blu-Ray. So go with HD-TV for the movies, and
provide dual mode (HD-TV and Blu-Ray) burners for data
storage (like the DVD+RW and DVD-RW burners now).
I want Blu-Ray for its data storage capacity. I want any format
that works for the HDTV movies.
It's time to fish or cut bait.
And cost will dominate,as far as I can see
HD-DVD. I think Microsoft is backing it, aren't they? Tsk, tsk, they always go with such horrible formats. If Windows Media is any indication in their decisions, HD-DVD is not the way to go!
For blu ray though, sony figured out how to beat the chicken and the egg dilemma, people WILL buy blu ray players (ps3) before there is even a lot of movies available.
As far a warners comment about wether they really need blu ray. Blu ray is for games, not movies. Games can have up to 9 hours or more of cut scenes in them, if they want the console to have HD cutscenes, they will need the space. Sony is looking at the future so we dont have to change formats again in 3 years, while toshiba is looking at a short term fix to just get something out the door.
For blu ray though, sony figured out how to beat the chicken and the egg dilemma, people WILL buy blu ray players (ps3) before there is even a lot of movies available.
As far a warners comment about wether they really need blu ray. Blu ray is for games, not movies. Games can have up to 9 hours or more of cut scenes in them, if they want the console to have HD cutscenes, they will need the space. Sony is looking at the future so we dont have to change formats again in 3 years, while toshiba is looking at a short term fix to just get something out the door.
SIGNED:PHYSICIAN THOMAS STEWART VON DRASHEK M.D.
SIGNED:PHYSICIAN THOMAS STEWART VON DRASHEK M.D.
Provided that dual format players are available *as standard* from the outset, the consumer will not perceive a problem and the two formats can compete on price, features, quality of the available films etc. Maybe one will quietly disappear, or maybe they will continue to co-exist. It shouldn't matter. So, having failed to do the sensible thing and agree on a single format, what the industry needs to do now is ensure that the necessary cross-licensing agreements are in place to make this a reality.
Consumers have shown a fondness for maximizing utility; the hd music disc formats that Sony and others tried to introduce a few years back failed because the music producers did not include the standard cd track embedded into the disc (an advertised capability of the formats)for people who had the need to use them on coventional cd players from time to time, causing the audiophiles to balk.
I can see a scenario where blu-ray can lead a separate existence in the gaming world, because gamers are their own market which producers will cater to, but conventional movie studios have nothing to gain by introducing the complexity of a disc that won't play in all existing players. Like the music cd, the current format and its playing equipment have become a center of gravity for all future developments.
Provided that dual format players are available *as standard* from the outset, the consumer will not perceive a problem and the two formats can compete on price, features, quality of the available films etc. Maybe one will quietly disappear, or maybe they will continue to co-exist. It shouldn't matter. So, having failed to do the sensible thing and agree on a single format, what the industry needs to do now is ensure that the necessary cross-licensing agreements are in place to make this a reality.
Consumers have shown a fondness for maximizing utility; the hd music disc formats that Sony and others tried to introduce a few years back failed because the music producers did not include the standard cd track embedded into the disc (an advertised capability of the formats)for people who had the need to use them on coventional cd players from time to time, causing the audiophiles to balk.
I can see a scenario where blu-ray can lead a separate existence in the gaming world, because gamers are their own market which producers will cater to, but conventional movie studios have nothing to gain by introducing the complexity of a disc that won't play in all existing players. Like the music cd, the current format and its playing equipment have become a center of gravity for all future developments.
1. Go to a movie theatre (where ticket prices are $10 each---a manager at one said "Prices are high because people bring in their own snacks." but years ago said "Snacks are expensive because movies are so cheap." Movie snacks are still ridiculously expensive ($5 for a bottle of water!), but movie tickets are $10---with commercials.
2. Buy the DVD for around $20 (average price). This really isn't worth it---many movies I want to see once but not more than once.
3. Rent the DVD for around $5. This is the best option for me, and I'm sure more and more people aren't as eager to part with $20 for a movie that just sits on their shelf after it has been watched once.
If Hollywood wants to sell more DVDs, lower the prices. If movie theatres want more attendance, they need to lower their ticket and concession prices.
Until they do, I'm sure they will see sales slumps---movies are entertaining but few are a big enough bang for the buck.
Entertainment is about value---and in most cases, cable TV and movie rentals are a far better value for the dollar (for the price of 5 movies a month, I have access to over 100 channels) than theatre movies or DVD purchases.
The only DVDs I buy are the few movies I want to own, that I will watch many times over. There are some great values, but overall, most DVDs and most movies in the theatre aren't enough entertainment value for the dollar.
1. Go to a movie theatre (where ticket prices are $10 each---a manager at one said "Prices are high because people bring in their own snacks." but years ago said "Snacks are expensive because movies are so cheap." Movie snacks are still ridiculously expensive ($5 for a bottle of water!), but movie tickets are $10---with commercials.
2. Buy the DVD for around $20 (average price). This really isn't worth it---many movies I want to see once but not more than once.
3. Rent the DVD for around $5. This is the best option for me, and I'm sure more and more people aren't as eager to part with $20 for a movie that just sits on their shelf after it has been watched once.
If Hollywood wants to sell more DVDs, lower the prices. If movie theatres want more attendance, they need to lower their ticket and concession prices.
Until they do, I'm sure they will see sales slumps---movies are entertaining but few are a big enough bang for the buck.
Entertainment is about value---and in most cases, cable TV and movie rentals are a far better value for the dollar (for the price of 5 movies a month, I have access to over 100 channels) than theatre movies or DVD purchases.
The only DVDs I buy are the few movies I want to own, that I will watch many times over. There are some great values, but overall, most DVDs and most movies in the theatre aren't enough entertainment value for the dollar.
I would hope that Best Buy, Netflix, Blockbuster (Oops! BB owned by a company with a conflict of interest-Viacom) Wal Mart and other retailers would create a Retailer's Council and "suggest" a format after careful review of presentations from competing formats, and recommendations by appropriate independent testing and certification groups.
Betamax was a better format, but more expensive, so VHS won out. Which of these two competing formats is most expensive to build, own and operate? Projected failure rates? Repair costs?
Retailers could, through the creation and operation of this Retailer's Council, have serious and worthwhile input on what is best for Consumers. That, after all, should be the primary consideration.
Maybe it should be a consumer body, like Consumer's Union.
While I'm a big believer in free markets and competitive markets, I think consumer's should not have to pay for competing forces and products to be tested on the backs of consumers.
I would hope that Best Buy, Netflix, Blockbuster (Oops! BB owned by a company with a conflict of interest-Viacom) Wal Mart and other retailers would create a Retailer's Council and "suggest" a format after careful review of presentations from competing formats, and recommendations by appropriate independent testing and certification groups.
Betamax was a better format, but more expensive, so VHS won out. Which of these two competing formats is most expensive to build, own and operate? Projected failure rates? Repair costs?
Retailers could, through the creation and operation of this Retailer's Council, have serious and worthwhile input on what is best for Consumers. That, after all, should be the primary consideration.
Maybe it should be a consumer body, like Consumer's Union.
While I'm a big believer in free markets and competitive markets, I think consumer's should not have to pay for competing forces and products to be tested on the backs of consumers.
through a movie????
Damn few, my friend. The first DVD's were single layer DVD's and
they did have to be turned over half way through the movie. Dual
layer DVD's were developed to eliminate the 'turn over' need.
The same thing will be needed for HDTV, and for that, we need a
new format.
through a movie????
Damn few, my friend. The first DVD's were single layer DVD's and
they did have to be turned over half way through the movie. Dual
layer DVD's were developed to eliminate the 'turn over' need.
The same thing will be needed for HDTV, and for that, we need a
new format.
My two DVD players from different manufacturers get very finicky if there are deep scratches on the discs. I get sick and tired of having to return the discs for another copy of a movie when my players won't advance a flick when it hits a serious scratch. This invariably happens about halfway through. I understand this is a problem with Netflix.
I hope CNET will revisit this durability issue with the new formats. It may be a catalyst issue to get manufacturers to finally pick one.
- Which is more durable?
- by Terry Gay July 15, 2005 3:34 AM PDT
- CNET ran a story last year about these two formats. The story pointed out that one of these formats would play even if the more durable discs became heavily scratched. If the two formats have close to the same density storage, then the tie breaker should be its durability. How many time have you rented a DVD from your local video store only to discover it looks like someone used it as a Frisbee?
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Showing 1 of 2 pages (44 Comments)My two DVD players from different manufacturers get very finicky if there are deep scratches on the discs. I get sick and tired of having to return the discs for another copy of a movie when my players won't advance a flick when it hits a serious scratch. This invariably happens about halfway through. I understand this is a problem with Netflix.
I hope CNET will revisit this durability issue with the new formats. It may be a catalyst issue to get manufacturers to finally pick one.