Parks Associates Blog

Thursday, October 25, 2007

It Wont Be a Happy Holiday Season for Blu-ray and HD DVD

“Every big problem was at one time a wee disturbance.” -Unknown

I believe this quote is very insightful when looking at how the battle of next generation DVD formats has played out over the first nine months of 2007. The first half of 2007 saw tremendous momentum by the Blu-ray format. The format had the support from most of the major Hollywood studios, exclusive retail support from Target and Blockbuster and a strong initial base of users with the integration of the drive within the PS3.

However, the HD DVD camp remained vigilante and continued to push with PR blasts and price reductions for their hardware. These “wee disturbances” evolved into a “big problem” for Blu-ray in August. Paramount, who originally backed both formats, decided to only support HD DVD. This was a big and unexpected win for HD DVD. This relationship has already paid dividends. Last week, the HD DVD exclusive release of “Transformers” broke a record selling 190,000 copies in its first seven days. As the holiday season approaches, high sales are also expected for other HD DVD exclusive releases such as “Shrek the Third” and “Stark Trek: The Original Series-Season One”.

It is not all bad news for the Blu-ray format. Home Media Research announced this week that the Blu-ray format still holds an almost 2:1 disc sales lead for the first nine months of 2007. (2.6mm Blu-ray vs. 1.4mm HD DVD) Blu-ray also has a trio of high profile discs being released exclusively on the format before the holiday season. (“Spider-Man 3, “Pirates of the Caribbean: AWE” and “The Simpsons Movie”)

What does all this mean? First, it means we are no closer to a single format than we were this time last year. Second, it is unlikely anything will be decided in 2007. The mix of exclusive content and lower prices for hardware may increase the overall adoption, but will not result in one format pulling away.

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