Posted by steveo on 01/05/08 23:55

"Tarkus" <karnevil9@atlantabraves.net> wrote in message
news:13o04a7s9hp1f68@corp.supernews.com...
> willbill wrote:
>> Tarkus wrote:
>>
>>> To add to this:
>>>
>>> "The move to a single standard would prove a major victory for
>>> consumers. Many who have come to enjoy the crisp detail of
>>> high-definition television likely would move ahead with purchases of
>>> advanced DVD players if they knew their technology would not become
>>> obsolete. The Warner decision removes some of that uncertainty, and
>>> appears to eliminate the prospect that Sony will lose out, as it did
>>> with its ill-fated Betamax standard in the battle against VHS."
>>>
>>> http://www.businessweek.com/technology/content/jan2008/tc2008014_928006.htm?chan=top+news_top+news+index_top+story
>>
>> imho, you need to see the forest
>> that exists beyond the trees
>
> Precisely my point. Less uncertainty means more consumers, which will
> lead to lower prices. One only has to look at the history of VHS, CD and
> DVD formats. Once people became confident in the stability of those
> formats, demand went up, and prices came down due to competition and
> manufacturing costs.

There was never any uncertainty on CD and DVD. The issue was HOW LONG the
transition would take. Since the price for the players came down but
slowly, it took quite a number of years. Now that there will likely be only
one option (i.e. Blu-ray), there will be a more traditional adoption
pattern: a slow decrease in player prices complemented by a slow increase in
adopters. It was the need to be chosen as the 'one' format that drove
prices down between HD DVD and Blu Ray, but now that that has been mostly
resolved, there is no incentive to continue the radical downward trend
pricing has had. In fact, there is every likelihood that prices for players
(except the PS3) will INcrease, as there will be the forthcoming 1.1 and 2.0
players coming out. New features (to Blu, anyways) demand higher prices,
from the manufacturers' POV.

Additionally, people who adopted HD DVD will not likely re-buy all their
disks, though the may buy Blu-ray players and other movies. Some HD DVDers
may opt out and utilize existing (and future) digital distribution avenues
and rent. So, the more avid portion of the early adopters will not be
helping Blu all that much.

Sure, some people will now hop on the HDM bandwagon now that Blu is all but
guaranteed the win, but there are still the vast majority of people who
didn't opt in because even HD DVD was priced too high at just less than
$200. Since the Blu manufacturers will not be dramatically dropping prices,
these people will still not join in.

The Blu manufacturers will not drop prices for a couple of reasons:
1) the whole reason Blu had so much manufacturer support was because they
felt they would be able to charge a lot and thus make a good margin on the
boxes for a number of years. They would be able to charge a lot for a
variety of licensing and technical reasons that would keep the cheapo
companies that make the $25 DVD players you see in the grocery stores out of
the market.
2) now that they are secure in their position, they will want to make good
their business plan (see point 1), which they weren't able to before.
3) new players will be coming out periodically (1.1, 2.0, ???), which will
keep prices high.
4) they have no reason to decrease prices since their is no competing
format.
5) none of the manufacturers currently making Blu players is a discount
player - they are all mid to high range. Thus, they will not feel the need
to compete against each other is this market. Do you see Pioneer,
Panasonic, and Sony having a price war with their HDTVs? It is only
Oliviea, Westinghouse, and their ilk that constantly drop prices and drive
the market price down, and there are no similar companies in the Blu
hardware business.

So, in other words, Warner has killed widespread HDM adoption with their
choice to go exclusive to Blu. At the very least, they have delayed its
market adoption and ascendance by many years. In fact, HDM may end up the
LaserDisc of this generation, eventually being supplanted by some other
technology like digital transmission, disposable/single use SSD, or some
yet-to-be-used innovation.

steveo

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