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Color Me Blu; The Negative Hype Is Overblown

18 Jun, 2008 By: Bo Andersen

If the prospects for future growth in the home entertainment industry were a color, what would it be?

A few pundits see only shades of gray on their palettes. I see Blu.

The media darts thrown at Blu-ray Disc recently are not aimed at the technology itself, but instead at the industry's presumed expectations for Blu-ray's growth. The assumption seems to be that Blu-ray's only role is to wholly replace DVD and to do so no more slowly than DVD replaced VHS.

In my view, that's not right. Blu-ray's initial role is to provide a capable, modern, even extraordinary supplement to DVD and satisfy the most discerning of consumers. In its time, Blu-ray will revitalize the promise of entertainment on optical discs and, as interactivity is ramped up, the format will assume the treasured place that DVDs have in homes worldwide.

Let's look at some of the negative vibe:

  • “The quality of DVD is good enough.” — That statement speaks to the strength of DVD more than to a weakness of Blu-ray. The fact that Blu-ray explores the higher end of the visual quality spectrum — and the audio is purely vibrant — offers something rich to those who demand this level of quality today and those who will in the future. For hard-goods retailers there is an easy question to answer: Do you want to offer a discriminating public the highest quality available or try to down-sell the consumer to a performance quality lower than an HD screen can display and lower than VOD will offer?

  • “Of the 30% of U.S. households with HDTVs, only slightly more than half actually get HD content from their TV service providers.” — While this may indicate that the demand for pure high-def is only moderate today, the statistic suggests an opportunity, not a barrier. It identifies a pool of 15 million flatscreeners who today might respond to a dedicated message like: “A $250 Blu-ray player or a $199 PS3 can give you the highest definition you can get on the products you most want to see in HD — great movies, extraordinary games.”

  • Moreover, the HD flatscreeners may be waiting for Blu-ray 2.0. This is, after all, a tech-savvy group of early adopters.

  • “DVD upconverters are cheap and good enough.” — Upconverting DVD players can and should be marketed by retailers as “almost good enough” (but, remember, you get what you pay for), and the remainder of retailers' message should be that Blu-ray is even better. The trick is to turn this into an appetite for true-Blu HD.

  • “You can't play the Blu-ray in the kids' room or the car.” — You couldn't play DVDs on the kids' VCR either, but you can play the kids' DVDs on the Blu-ray player. There's a whole lot more compatibility here than in most format changes. I predict that some car models in 2010 will come with Blu-ray players.

  • “The Blu-ray pricing premium is too high.” — Who doubts that the industry needs a premium product, premium priced based on an enhanced value for consumers? Whether a $15 price premium is the right amount is not the issue. The issue is whether digital copy, BD Live and the extraordinary promise of advanced interactivity can command the premium. Who doubts that it can and will?

  • Let's take a look at the most likely Blu-ray buyers: younger, affluent males with families. Where does a young, relatively affluent family with kids most likely go to fill their house with high-def cinematic fun? Pay-per-play VOD? Retailers must satisfy the high-def demands of this group. Indeed, one of the most significant metrics to watch is how quickly BD unit sales exceed VOD buys.

    Finally, the promise of Blu-ray interactivity cannot be understated. Mating motion picture content and cinematic quality with online enhancements, plot adventures, or outcome-determinative options will capture the best of video games and movies together on a shiny disc.

    The sky's the limit, and we all know what color the sky is.

    Bo Andersen is the president of the Entertainment Merchants Association (EMA).

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