Home Media Magazine - February 24, 2008 - (Page S10) blu skies 10 » Continued from page 8 Hulbert at Target conceded that despite describing the overall entertainment category as in decline, Target was pleased to be “grabbing market share” along the way. for playing DVDs — again, unlike the shift from VHS to DVD — is equal parts selling point and liability. While consumers may be more motivated to buy a Blu-ray machine that will still play their old DVDs, as a result, they are not nearly as likely to quickly replace their library of DVDs, which, by the High-Def Disc Challenges Aplenty way, look even better on HDTVs and better still when played Creating a mainstream market for high-def discs will de- on an upconverting DVD or Blu-ray player.” mand a full-scale blitz by suppliers and retailers. It took a couple of years for DVD to really ignite and then spread like Overcoming Challenges wildfire, and high-definition discs overall have been keeping Overcoming these challenges means more marketing with pace with the early days of DVD. a clear message about the immediate benefits of Blu-ray But it will take a torch of unknown origin to spark high-def disc machines and discs, better training and motivation of frontsales to catch fire in a significant way. Unlike DVD, Blu-ray Disc line retail employees, and a fairly significant decrease in the faces myriad challenges. In addition to the threat of electronic average price of Blu-ray players. Much of the take-up rate delivery that was not really a part of the equation in the late of set-top players is attributable to the bargain-basement 1990s and early 2000s, the value proposition of Blu-ray Disc is pricing of $99 and $199 by Toshiba on its discontinued not as easily explained or as readily apparent to consumers. HD DVD players. Blu-ray players are still generally priced What’s more, as consumers have finally begun to embrace at $399 or more. HDTVs, frustration and fatigue have quickly set in as they are “At some point CE companies have to be brave enough to inundated with a morass of technical jargon and unexpected phase out upscaling DVD players and replace them with a ripple-effect purchases and expenses. The TV/display is only high-def player,” Erickson says. Noting that the sub-$200 the beginning. Right away there are $100 Monster HDMI price is the primary level to attract mainstream adoption, cables; furniture or wall mounts to put it on, or installation he says that dropping to a sub-$300 machine by the 2008 charges to have it done for them; a higher-priced cable or holiday season would be a “good step” for Blu-ray. satellite subscription to the package of HD channels; and the Crupnick says that NPD research shows there hasn’t been a nearly mandatory purchase of an HD DVR. good enough case made at retail to convince consumers why And that’s before they even start thinking about upgrading next-gen discs are that much more superior to DVDs. In-store to high-def discs (unless they get a free Blu-ray Disc player displays at specialty retailers do not offer a “wow” factor, he says. with the purchase of their HDTV, as some savvy companies And the average store salesman maybe isn’t doing it justice. began doing recently). “There needs to be more evangelizing, separate and apart DisplaySearch’s Erickson says that internal research by from the pricing and format war,” he says. Best Buy last fall showed that 50% of HD customers underBottoms of Understanding & Solutions says this month’s estimated the cost of getting into high-def. announcement of the end of the format war lowers the “In that type of environment, a $70 upscaling DVD player confusion factor and clears the way for more mass-market looks more appealing than a high-def player,” Erickson says. adoption of high-def discs. When it comes time to consider Blu-ray, Crupnick says, And the rapidly increasing number of homes with HDTVs few consumers are motivated to pay a premium price for is also a strong potential driver for Blu-ray high-def disc hardware and software simply because of better resolution players. DisplaySearch projects the percentage of U.S. houseand interactive features. Those who do pony up more than holds with HDTVs will rise from 25% at the end of 2007 to $300 for a machine and nearly $30 or more for discs have nearly 70% in just four years. unrealistic expectations and can easily feel their purchase is Unfortunately consumer education is still failing even a “terrible value” and be dissatisfied. those who buy HDTVs. About half of HDTV owners are not “Prices will need to come down very quickly,” Crupnick says. receiving any kind of HD programming, and many don’t Additionally, consumers are not unhappy with their DVDs, even know it. unlike their clunky VHS players that required tape rewinding Driving HDTV sales are the increasing number of HD TV and were subject to breakdowns. channels and programming, which, in turn, will create a “One of the biggest problems is that DVD is just too good of higher standard and demand for high-def discs. Continued on page 12 » a product,” Crupnick says. “Blu-ray’s backward compatibility IT’S BLU February 2008
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