Blu-ray is DOA: High Costs, Expensive Players and HD DLC

ZDNet’s Robin Harris takes a look at why Blu-ray is dead-on-arrival. Robin’s analysis, while starting with an inflammatory title, makes a lot of sense.

Robing starts off by citing the first few key elements that killed the format:

  • 2-year battle with HD-DVD took the steam out of HD Disks in general, making consumers a bit hesitant about the “whole HD thing” in the first place.
  • No cheap players; we may finally get $99 or $150 players this Christmas, but that’s like 3 years after when we needed them.
  • High licensing costs; prohibitively high for indie producers and only affordible for big studios – both on the disk-pressing front as well as the software production front.

Those items alone are, in my mind, what sealed the deal and killed the format, but ancillary issues that popped up along the way help keep the format dead, and they are:

  • Low-cost, high quality upscaling DVD players; this injected new life into the old format
  • Streaming HD; this can be seen to varying degrees around the web, but most notable would probably be the NetFlix HD Streaming coming to the Xbox 360 with the Xbox Live Experience update shortly.

As soon as the Blu-ray Disk Association (BDA) raised the barrier to entry for both consumers and producers, they sealed the deal on the Blu-ray disk format every getting mass adoption; you can even see this most acutely with Steve Jobs’s comments about why Blu-ray support isn’t in Mac yet, referring to the whole situation as “a bag of hurt”. It’s so bad that you have one of the most powerful people in technology and a very powerful person in Hollywood opening denouncing the format? Ouch… it’s gotta be bad then.

Most are curious why the BDA made the barriers to entry so high and all fingers seem to point towards sheer greed. Most of the BDA’s decisions were made during the boom years when everyone had too much money and not enough things to spend it on, having people pay for the priviledge of watching HD seemed like a good way to bleed them dry, and now that everyone is cutting back, the idea of an ultra-elite format seems rediculous.

For those interested in the actual production and licensing costs, Digital Content Producer gives a detailed overview of the situation, but Robin’s original article sums it up nicely in a bulletted list near the end.

So nice job on that Sony… you managed to do it, again.

Thanks to Brendon O’Laughlin for sending this one in.

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About Riyad Kalla

Software development, video games, writing, reading and anything shiny. I ultimately just want to provide a resource that helps people and if I can't do that, then at least make them laugh.

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No Responses to “Blu-ray is DOA: High Costs, Expensive Players and HD DLC”

  1. Jigsaw hc November 3, 2008 at 7:32 pm #

    I know some people that love their blu-rays, but with Netflix adding HD streaming support I personally don’t see the need to buy an expensive player and the movies cost like $30 each.

  2. Riyad Kalla November 3, 2008 at 9:14 pm #

    Totally agree… the inconvenience of disk-based media is getting bigger and bigger, the idea that they would price it into a premium category because people care about “1080p/7.1/AVC!” is not a main-stream choice.

    I know that when I think of a movie I want to see, I want to watch it *right then*, not wait days to either rent it or go buy it. I just want to stream it and be done with it.

    NetFlix, with this Microsoft deal, is going to expand its movie line up *and* I think bring HD streaming early next year to more devices besides the Microsoft/Xbox exclusive, and that’s awesome in my book… that’s what I’ve been waiting for.

  3. tdod November 4, 2008 at 9:33 am #

    So, how much bandwidth is likely needed to stream HD data into the household and display it nicely on 50+ inch displays? I am no expert, but it seems to me that such data flow would be rather heavy. And if so, why should we assume that ISPs will sit back and let such heavy usage take place without trying to charge more. I fully expect that at least both AT&T and Comcast would try to get involved if too many customers suddenly started watching significant amounts of video via streaming HD.

    Further, even if they don’t try to charge for it, what would be the local network burden if several people on my street all stream HD content at the same time? Would the pipes get backed up? Maybe you are blessed with fiber to your house, but I sure am not.

  4. Rick November 4, 2008 at 12:54 pm #

    “I know some people that love their blu-rays, but with Netflix adding HD streaming support I personally don’t see the need to buy an expensive player and the movies cost like $30 each.”

    Because the video that you will be ‘streaming’ from Netflix won’t be true High-Definition video like you get from an actual Blu-Ray disc. The videos will be compressed like HELL. For example, the so-called “HD” movies on the Xbox Live marketplace are compressed into a little 1 gigabyte movie file. That’s ridiculous. Regular DVD films are 4 gigabytes and 8 gigabytes for dual-layered discs. Blu-Ray discs hold 25 gigabytes and 54 gigabytes for a dual-layered disc. You won’t be instantly streaming a 25 gigabyte file from Netflix. Heck, even a 1 gigabyte file requires some buffering for an average high-speed connection.

    It’s not the same. Download an “HD” movie from the PS3 or the Xbox Live Marketplace, and then watch the same version on Blu-Ray.

    Watch Speedracer on Blu-Ray. . .

  5. Riyad Kalla November 4, 2008 at 4:19 pm #

    tdod & Rick,

    Both excellent points. To be more specific, I don’t think streaming will replace truly high-def video sources like Blu-ray, I think that Blu-ray will die before getting the penetration that DVD ever did because of the *convenience* of streaming video combined with the high cost of Blu-ray production.

    I think convenience is a much hotter sell than “1080p!”. For example, Comcast On-Demand looks like garbage for most of the stuff I watch, but I can get at it instantly as opposed to be trying to rent the Blu-ray version of it from NF and waiting.

    Right now, it’s true, high bandwidth like streaming tru-HD would be prohibitive to roll out… but decently compressed down video, watching it instantly? That’s a huge win.

    I’ve installed PlayOn, on my PC, so now I can do NetFlix, Hulu, CBS and other online services all from my PS3. Yes it looks blocky and overcompressed, but do I care if I’m watching Family Guy or any other sitcom? Hell, I’d even watch a movie that way, but would prefer a DVD-quality stream if I could get it.

    I’m just saying that Sony’s original idea of “OMGWTFBBQ, I need blu-ray for fidelity!” isn’t applicable across the majority of consumers. I’m sure there is a high def market for Blu-ray that will be around forever, but I just don’t see it cutting seriously deep into the culture before it’s invalidated by premium streaming services.

    As for tdod’s comments, absolutely… this shit takes a ton of bandwidth. FIOS can already realize this with it’s entry level service and DOCSIS 3.0 offering cable companies the ability to ramp up to 100mbit service to the premise as well to compete. So it’s not like this is a pipe-dream.

    Now, the scenario where *everyone* on the block is all watching an HD movie at the same time… yea that probably wouldn’t scale really well, just like now if everyone decided to download porn at the same time… but it usually doesn’t happen that way, so everyone experiences decent speed.

    I know the feeling of “bogged down” I used to have at the end of the day when everyone got home and logged on has lessened over the years as ISPs upgrade their hardware and move us forward in this regard.

    In summary, it’s clear that we are going to streaming/on-demand services. The catch is that it is close enough to ready, that with the high barriers to entry for Blu-ray, it will most likely trump that disk format from ever becoming as relevant as DVD. It may still be supported a lot of places in a few years, but as far as being “OMGWTFBBQ”… I doubt it.

  6. mike November 5, 2008 at 7:28 am #

    HD DVD will continue to drop in price. Blu-Ray will lose in the end.

  7. tdod November 5, 2008 at 8:01 am #

    Riyad:

    I agree completely that video on demand is convenient. In fact, I have had Comcast TV service for a year or two now, and I regularly make use of their on-demand service — both SD and their so-called HD (which while not perfect is definitely much better than SD). Also, I have had a 50 inch HD TV for over 4.5 years, and during that time, I have watched HD content over DirectTV (at various levels of compression), Comcast, OTA, and HD DVD (I cry a little inside whenever I see my HD DVD player sitting unused). I guess you can just say that I am currently very skeptical whenever I see anyone mention “HD on-demand” as I think much of the HD goodness will be lost due to compression (as is apparently the case as presented by Rick above). I mean, technically overly-compressed video can still be called HD, but just read up a bit on all of the DirecTV hate over on AVS forums to see what people think about bit-starved HD feeds. This, in fact, is what pushed me away from DirecTV to Comcast (perhaps DTV is better now with their mpeg4 receivers, but I got so sick of waiting I jumped ship before this).

    So, in my view:

    HD = awesome
    on demand video = awesome
    HD on-demand video = I believe it when I see it *on a big tv*, and not simply when some company labels their service as such.

    If you compress the hell out of the signal to fit it through the pipes, will HD fanatics still honestly call the resulting output good HD? Or will it be just another video signal we bitch about, and compare to other bit-starved HD sources? It seems to me that minimally any HD on-demand service should deliver content of the quality at least as good as Comcast or DirecTV on-demand (yes, I know that DTV is not truly on demand, but it is fairly close, compared to waiting for the mail or even driving to a store).

    t

  8. Riyad Kalla November 5, 2008 at 8:37 am #

    tdod,

    Totally agree on all points, just not sure how this relates back to the original comment that Blu-ray is DOA.

    I’m positing that (OHHHHH big-word-win) Blu-ray is dead because the convenience of on-demand is too much to ignore and most people (even closet fidelity-freaks like myself and maybe you) will forgoe quality for convenience… in the end more or less ignoring Blu-ray unless it’s dropped in our lap (e.g. NetFlix delivers a movie you wanted to see anyway).

    That is all dis-un-ir-respective of the bandwidth or on-demand quality issues. I *totally* agree that we will be fighting an uphill battle with regard to quality for on-demand services for the next 10 years *easily*. I expect the next 3 to be a joke, and around year 4 or 5 for “decent high def” content to become available with any amount of regularity.

    Netflix will have growing pains as they learn to stream more HD content and as their watch-it-now library grows with more Triple-AAA titles and more people begin making use of it, they’ll have to scale well beyond anything they imagined I bet.

    Hulu will continue to grow, I’m sure adding a “HD” mode with 520/640p media in 2 years and compete directly with Netflix on that front.

    These are all indicators, in my mind, of why Blu-ray is more or less a niche format. Yes Wal-Mart sells it, but it’s not like those $35 movies are stocking stuffers…

    Anyway my 2 cents… but I’m always right, so whatever ;)

  9. Riyad Kalla November 5, 2008 at 8:42 am #

    tdod,

    To speak to your point of bandwidth issues, something we didn’t bring up that will kill on-demand streaming services (HD or otherwise) is the bandwidth caps that ISPs are happily trialing and rolling out.

    AT&T is currently testing some ridiculously low caps in NV right now.

    If that *Does* happen, then I think Blu-ray will get a kick in the pants because the reality of streaming your content will certainly die.

  10. tdod November 5, 2008 at 9:22 am #

    Riyad:

    I suppose I do owe you a better tie-in back to your original post. Basically, I think that whether blu-ray is DOA is dependent on two factors:

    1. the quality of alternative (to blu-ray) “on-demand” video sources (where “on-demand” need not be instant, but also includes physical media you must insert into a player); and

    2. *if* alternative on-demand sources provide inferior A/V quality, do consumers–as a whole–even care about such a loss of quality.

    In my previous post I tried to explain that in my opinion, currently, alternative video sources are inferior to BD. Now, its entirely possible (perhaps even likely?) that consumers will not care about inferior quality of alternative on-demand sources. If so, then I will start to believe that BD will go the way of the dodo bird. However, I will reserve such judgment until such online alternative HD on demand sources are actually more widespread in the market for me to judge. I still maintain a bit of hope that in the end consumers will vote to keep the “high” in HD, and not let it become watered down.

    t

  11. Brett November 5, 2008 at 11:25 am #

    This is rather illogical. It says Blu-Ray has failed? its been around 3 years since it started, its not had a relatively slow start compared to other formats Anyone remember how long it too to adopt DVD from VHS?

    Furthermore:
    “No cheap players; we may finally get $99 or $150 players this Christmas, but that’s like 3 years after when we needed them.”

    So now 3 years have passed we no longer need Blu-Ray? All technology starts off expensive, its no different to VHS, Colour TV, DVD, HD DVD and so on…

    Also; Mike, all studios have dropped HD DVD, there are no longer titles being released on HD DVD thats why its coming down in Price. Its no longer in competition with Blu-Ray…

  12. Nick November 17, 2008 at 4:21 pm #

    OK so the editor or writer decides to write that DVDs are 10 dollars and BluRay are 16 dollars as a point that Bluray in his eyes is dead..(Ill get to the other points in a minute)
    First comment is someone agreeing it seems that there is no point in spending money on (expensive???) Bluray equipe. And now Netflix…(blah blah) and there ONLY 30 dollars each….

    WHAT? ok so bluray discs are cheaper and full quality and netflix are 30 for streamed quality HD????

    I know where the money needs spending here!…

    Other points
    ============

    “No cheap players; we may finally get $99 or $150 players this Christmas, but that’s like 3 years after when we needed them”

    Would the editor or writer kindly state where he saw movie titles for either Bluray OR HD DVD 3 years ago…. cmon you cant say that you needed cheap players before you had any choice in movies to watch????

    ** “Low-cost, high quality upscaling DVD players; this injected new life into the old format ”

    Its seems the same people that probably go out and by the cheapest piece of rubbish TV seem to want and site in decade old formats and spend money watching half assed upscaled DVDs on there beloved HDTV not realising the full potential of the format or their nice new TV or relying on editor/writers such as above to post/subject the general public to their thoughts on Bluray when clearly as Ive pointed out above is far from true? great and well watch DVD for another 10 years why?

    I wish editors in general would spend a tenner or two instead of putting down a format in its youth…online donwload and streaming cannot overtake hard copy BD as broadband penetration globally could not sustain that logic.

    ** “2-year battle with HD-DVD took the steam out of HD Disks in general, making consumers a bit hesitant about the “whole HD thing” in the first place. ”

    Long ago there was a betamax battle – Did VHS die? NO!

    Why do people write negative comments on a format whic has clearly won the publics vote already!

    I couldnt be bothered to go an pick out the DVD and Bluray sales charts go find them youll be surprised.

    Most importantly go and enjoy a Bluray film on your new HDTV and dont believe that its dead whats going to beat it in the short term????
    Nick

  13. Riyad Kalla November 17, 2008 at 5:30 pm #

    Nick,

    I dug up the Nielsen sales for beginning of November:

    Our economic down turn right now throws a curve-ball in Blu-rays face as it relies entirely on next-gen (expensive) televisions and I doubt as many are flying off the shelves this Christmas.

    The other curveball that Blu-ray is facing is streaming video… it’s true, it doesn’t look as good, but it looks good enough in most cases. NOTE: The difference between success and failure is usually some margin as small as “good enough”.

    With services like FIOS rolling out to almost a million customers, Netflix getting integrated with Xbox and Hulu now streamable to your PS3, Xbox or PC and support for Orb and other streaming services going to 3G enabled devices, this is a HUGE amount of competition.

    You gave the example of VHS and Betamax, that was a 1-on-1 battle, Blu-ray is fighting like 9 other sources of media besides DVD, this is not the same landscape that we had back in the 70s and 80s.

    The convenience and accessibility factors are a huge value-add that Blu-ray cannot offer that streaming media can.

    For folks with awesome HD setups, they will absolutely have an Blu-ray player… but they have never made up the majority.

    Keep in mind that this article isn’t saying that Blu-ray is a FAIL, it’s not… this article is saying that Blu-ray will never reach the insane penetration that DVD did and it’s growth will get cut short by all the factors I just mentioned.

    Just look at mobile video alone… for the first time in history Notebooks and Laptop sales overtook desktop sales 3 years ago, that signals the first major ship in computing *world wide* – more specifically, everyone is going mobile.

    Now look at all the devices we have, mostly 3G, they are all video-enabled devices and offer some streaming service to boot. A lot of people are watching a lot of video on the go, that means TV, movies, whatever… this all hampers the success of Blu-ray. If I watch Pirates of the Carribean on my iPhone during a flight, I am that much less likely to go home and buy the Blu-ray disk for $25.

    Stream is absolutely the future, there is no doubt about that. It’s just a matter of how accessible it is (which increases every day) and broadband access to people that want to utilize it… that too is increasing, especially with most major cell networks offering 3G to some degree or another.

    As one last example of how things are changing… 5-8 years ago if I was going on an international flight, I would have had a portable DVD player with me and a sack of 10 movies or so. Now, I have my iPhone… I’ll never lug around a portable Blu-ray player with a sack of Blu-ray movies… I’ll have my mobile media device. It’s these type of “just living” scenarios that Blu-ray will never get inroads into, which is why it will be destined to be a niche format for HD gurus that want the utmost in quality.

    You’d be surprised how much normal people don’t care *that* much about HD… they just want to watch things and stay entertained.

  14. Nick November 17, 2008 at 6:04 pm #

    Riyad:
    That was a perfect response it came with perfectly executed reasoning and facts to back up your statement.
    I hope I didn’t come accross too strongly on my critisisms with regard to the editor I just felt he was another editor commenting with poor points to justify his statements.

    If bluray is competing with those other formats why is it then that editors take it upon themselves to put bluray down so much???

    What is FIOS some form of fibre to the home. Cos in many countries even in Europe if you are more than 4km from a telephone exchange then you cannot get more than 1 meg lines. :(
    And believe me there aren’t many exchanges. So that was my reasoning to state that streaming simply cab
    By take off as a mainstream solution for some time yet. :(
    Hard copy is the way for me at the moment and I only see DVD and bluray in the stores in Europe. No other competition out there I can see.
    Saying it’s an epic failure in the making is a bit premature.
    if Sony hadn’t brought out bluray we may undoubtedly be talking about hd DVD or another disk medium
    Movie studios couldn’t have it another way e.g broadband delivery. Most people want the hard copy on a purchase. Maybe in time when infrastructures are in place netflix is great but for the mass my 2 cents is with bluray .

    But bring on new tech I’m all for it provided it suites the moment.
    And Riyad if you have netflix is it good on say a 50″?

  15. Riyad Kalla November 17, 2008 at 9:29 pm #

    Nick,

    The popularity of disk-based media in areas of the world where high bandwidth isn’t ubiquitous is something I didn’t touch on and I think it’s valid point. You mentioned in some parts of the UK it’s not wired with fiber and other high-bandwidth services, that’s probably true for other countries like China and big portions of Russia… so it’s possible that Blu-ray becomes popular in other countries for a while for logistical reasons… actually China won’t adopt Blu-ray, they invented their own HD-disk format (AVCHD) so maybe not China, but I still think your point is well made.

    As far as how Netflix looks, I watch it as well as Hulu (which is even lower) on a 65″ TV, and I find it *acceptable*, it’s definitely not good or great, but it’s certainly good enough to catch up on your favorite episodes of TV shows or funny movies that you just want to waste some time with.

    The real test of if “Streaming will replace disks” I think will be with the high-def Netflix integration with Xbox 360 this fall, they are finally streaming higher resolution video, but it’s exclusive to the 360 for the time being, I’ll let you know how it looks and how the performance is.

  16. Blu-Ray Hero December 8, 2008 at 9:15 pm #

    I see a great future for Blu-Ray. HD DVD may hurt them in the short term but I believe in the end, Blu-Ray will prevail.

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