Holding Our Breath 'Til We Turn Blu15 Jul, 2008 By: Thomas K. Arnold
Shhh. Listen closely. Can you hear it?
I didn't think so.
With apologies to Simon and Garfunkel, welcome to the sound of silence: the sound of our entire home entertainment industry, holding its collective breath and waiting to see what comes next.
These are turbulent times, indeed, with flat DVD sales and analysts downgrading studio stocks because they fear packaged media's future is bleak due to digital downloading.
And yet on the other end of the spectrum, you've got the promise of Blu-ray Disc and study after study that shows consumers are hesitant about downloading movies the way they download music because the two mediums are, after all, vastly different beasts. Even among the much-ballyhooed Generation Y, the young crowd that supposedly views all entertainment as a transitory experience, a full 98% say they still buy and rent DVDs, according to a recent Knowledge Networks study.
The studios are caught in the middle, eager to quell investor fears that packaged media is going the way of the eight-track but uncertain about exactly how to convince the skittish moneymen of Wall Street. It's going to take some really big Blu-ray Disc numbers, and while the format is in fact catching on with consumers faster than DVD did a decade ago, it's apparently not fast enough to convince the analysts who seem to hold Wall Street in some sort of weird hypnotic trance.
So the studios are giving it their all, pumping out high-profile Blu-ray Disc releases such as Paramount's “Godfather” trilogy and hoping consumers will bite in a big enough way to sway the skeptics. It's not so much a question of whether Blu-ray will catch on; it's a question of how fast the format will be accepted by the masses. In our business, after all, perception is reality, and the perception is that the fourth quarter is make-it-or-break-it time.
In reality, it could be another year or two before we see a mass consumer transition from standard DVD to Blu-ray Disc. But if that's the case, Hollywood could be in for some tough times. The tortoise may ultimately win the race, but for the moment, at least, all eyes are on the hare.