When the Sony camp won the format war over the Toshiba camp for high definition optical media three months ago, a lot of us in the industry were openly relieved. Most of us thought that consumer adoption on Blu-ray would be swift once the F.U.D. (fear, uncertainty and doubt) factors had been removed. Well, it seems we were wrong…at least temporarily.

John DiLoreto
Analyst and Editor for
Insight Media

A report from ABI Research shows that it will be 12 to 18 months before the market for Blu-ray players really "kicks into gear." Seems strange, doesn’t it? Afterall, everyone and their cousin is getting a new HDTV, and soon virtually every movie released on DVD will also be released on Blu-ray with 4x the resolution. Sony and Panasonic are capable, well respected manufacturers. So what’s the problem?

For one, it’s legacy player inventory. HD DVD and universal players are selling at deep discounts for as little as $200 and will continue shipping through 2008, the report said. Meanwhile, Blu-ray players remain much more expensive and supplies are limited.

But that’s OK, because according to ABI, further evolution of the optical drives and the markets are necessary for the markets to take off. Most current players for example, do not support all the functions that studios place on the discs. Some current players lack support for, or upgradability to BD Live! or Bonus View (picture in picture). Consequently, "consumers cannot utilize all the available options and manufacturers would rather sell more fully-featured models," the report said.

Consumer electronics manufacturers need to introduce full-featured players and then get prices down. The $200 price point seems to be the magic level for mass adoption. Until then, HDTV owners will opt for standard definition or up-converting DVD players and delay buying higher-ticket CE items. Furthermore, Blu-ray packaged media comes at a heavy premium over standard DVDs, although studios have brought prices down to the low $20-range for some titles.

Other markets for Blu-ray optical drives include computers and game consoles. Optical disc drive manufacturers have lowered their prices for computer BD-ROM drives in an effort to kick-start adoption in the PC market. But BD drives are still priced three to four times higher than red laser drives and require advanced graphics cards. So their adoption will struggle in entry-level PCs.

That leaves game consoles. In 2008, PlayStation 3 players will make up over 85% of the BD players in the field, and PS3 sales are picking up steam. The report forecasts that this lead will continue until 2013 when the installed base of CE- and PC-based BD players finally overtakes the installed base of PS3s.

Those who have bought or will soon buy a HDTV can be expected to mostly be watching movies in standard definition, unless they have access to their kids’ game consoles - or maybe they even buy a game console of their own - just to get the Blu-ray player!

Another option for those who insist on movies in HD is to resort to HD broadcasts and on-demand titles delivered by cable or satellite, even though these come with a certain penalty in image quality compared to the optical disc.

In this economy, maybe some who are buying a new HDTV might consider waiting until they can get that set with an economical Blu-ray player at the same time. One outcome is that there could be a surge in HDTV demand coming in 12-18 months when Blu-ray players get hot. That would be interesting.

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