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Selling Like Cold Hotcakes

July 6th, 2009

I’ve just returned from a "get away from it all" extended July 4th vacation in New York State’s Catskill Mountains — no electronics; just some reading, kayaking, antiquing, and meditating by the ol’ trout stream.

Getting back up to "connected" speed took a little while this morning, but I wanted to comment on a recent Harris Poll that was taken in mid-April of this year, and which still crosses my mind from time to time. The online poll of 2,401 U.S. adults showed just 7% of them own a Blu-ray player, while (amazingly) 11% still own and use HD DVD players.

Continuing with the results, 9% are the proud owners of Sony PlayStation 3 consoles (which are BD compatible) and 3% sprung for the accessory HD DVD drive that fits Microsoft’s Xbox gaming console. All of these results would seem to contradict the victorious proclamations of the Blu-ray camp that have issued forth on a regular basis since the HD DVD folks folded their tents in January of 2008.

More eye-openers from the Harris Poll: Sales of HD DVD players are up in 2009 by the same margin over 2008 sales as Blu-ray players. Further, only 7% of non-BD player owners reported plans to buy a Blu-ray player within the next year, a number that is down from 9% of respondents in May of 2008.

So what happened? Wasn’t Blu-ray supposed to be the next big thing in packaged media? Oddly enough, 47% of the respondents reported owning an HDTV, up from May 2008’s 35% figure. Of that group, 62% of respondents making more than $75K a year now own an HDTV set. So why aren’t they buying more Blu-ray players?

Drilling down into the poll brings forth even more interesting numbers. Only one-fourth of the respondents plan to switch to Blu-ray completely from red laser DVDs. 43% are waiting for BD prices to drop further before they buy more discs, and only 21% are replacing movies they already own in RL formats with BD versions.

Milton Ellis, VP and senior consultant at Harris, was quoted in the release with this possible explanation for the poll results. "Blu-ray also faces competition from alternative technologies such as cable, satellite, and the Internet. Consumers today can easily watch high definition TV channels or use the Internet or video-on-demand to access high definition movies. In the near future, access to high definition movies may be a download or streaming delivery of one’s favorite movies to a home media server that eliminates the need for a Blu-ray player and Blu-ray disc."

I’ve mentioned this possibility on more than one occasion in my DD reports, and it indeed appears that consumers are more captivated right now by the prospects of direct HD downloads and HD streaming capabilities, even if broadband speeds to most households aren’t quite fast enough on a regular basis. Look at all of the new HDTVs and set-top boxes that offer Ethernet connectivity (some are even wireless, such as Vizio’s new top-line LED LCD HDTVs).

It appears now that the entire blue-laser optical disc brouhaha from 2004 to 2008 was a tempest in a teapot. While there’s no question that BD copies of movies provide better image quality on larger HDTV screens, that fact in itself doesn’t appear to be compelling enough to inspire more sales of players and discs — and you can get some big-screen HDTVs pretty cheaply these days, like 50-inch Panasonic 1080p plasma sets at 6th Avenue Electronics for less than $1,000.

Instead, cost and convenience appear to be the deciding factors in accessing HDTV content, and the streaming/download model is about as convenient as you can get. I recently bought all 12 episodes of Dexter: Season 3 for the sum of $27, and downloaded them from Amazon’s Unbox site to my TiVo HD player as MPEG4 1920×1080 files in a matter of hours.

The playback quality on my 42-inch Panasonic plasma TV is excellent — better than red laser DVDs, and a whole lot cheaper than a Blu-ray box set. If I lose the files or delete them, I can download them again (forever!) from the Amazon server. And since I’m not really into BD Live and other interactive Blu-ray features, I saved myself quite a few dollars by not buying a BD player for that TV, either.

From that perspective, the Harris Poll results aren’t all that surprising. Even substantial price drops in both individual BD discs and players may not stimulate sales all that much as more and more TV viewers gain access to HD content via the Internet, and Amazon and Netflix beef up their TV and movie catalogs.

Anyone for cold hotcakes?