It’s an expensive cycle, building a home video library. Just when consumers had filled their cabinets with VHS tapes of their favorite movies, the DVD came out. With its smaller size, clearer picture and wealth of extras and options, DVD became the format of choice for millions in rounding out their video collections. Finally, a few years ago, Blu-ray defeated HD DVD to become the next generation format.
Unfortunately for Blu-ray and its backers, we are now seeing a trend that Hollywood is desperately trying to reverse: the “rent but don’t own” mentality. For years, studios have (correctly) assumed that consumers would buy a movie they like on VHS. Then they would buy the special edition of the movie on VHS. Then the DVD release would happen: cha-ching, cha-ching, cha-ching. It’s a trick George Lucas and company have down to a science.
In the last couple of years, however, with a perfect storm of tightened consumer purse strings and an abundance of cheap and convenient disc and VOD movie rentals, people are realizing that they don’t need to own movies any more. This has caused much hand-wringing and finger-pointing in Hollywood, but by all appearances seems to be a permanent shift in consumer behavior. We’ve finally started to get off the treadmill.
Where does a shiny, expensive new format like Blu-ray fit into this new world, then? BD continues to see sales growth, with 24 million units predicted to be sold in the major markets in 2010. Purveyors of the format have also attempted to cash in on the 3D trend by releasing 3D-compatible BD players and titles. At the same time, however, the format is battling with the perception that it’s not nearly the technological leap that DVD was over VHS. For many, many consumers, DVD is proving to be “good enough”.
What about the rental market? Redbox and Netflix, the major players still standing in the physical rental market, have both made strides to fold Blu-ray into their offerings. Netflix offers BDs in its by-mail service for a small upcharge, and Redbox rents major titles in HD alongside standard-def ones in its kiosks for a $.50 premium. A search of Redbox kiosks in my area found 50 that were stocked with Blu-ray within a few miles of my house. Overall, however, VOD and DVD rentals still dwarf those of Blu-ray, and many consumers don’t consider BD worth the premium.
What does the future hold for Blu-ray, then, if it may not be destined to conquer either the sales or the rental markets? Personally, I love the format, having purchased a Blu-ray player about 18 months ago. I love the visual clarity and crystal-clear sound that Blu-ray offers. Since buying the player, I’ve probably bought about 20 BDs, mostly to replace DVD versions of my absolute favorite films. I’m noticing, however, that I’m only taking a “best of the best” approach, and not buying nearly the number of movies that I used to buy on DVD. That seems to be mirrored by many other BD adopters, and coupled with a likely smaller rental market penetration, doesn’t bode well for the format as a true successor to DVD.
My prediction: we have entered the age of niches, in which there will not be one dominant format going forward. DVD will slowly die off, but will not be fully replaced by Blu-ray. Physical media itself will stick around for a while, but will eventually be surpassed and supplanted by streaming and downloads. I love Blu-ray, but will never fund it the way I invested in previous generations of technology.
Over to you, Insiders—we love to hear your opinions. Give us your thoughts on why you have or have not embraced the Blu-ray format, and where you think it’s going.