Blu-ray Awaits Its Spoils

By Mike Musgrove
Washington Post Staff Writer
Saturday, May 24, 2008

Blu-ray may have won the format war, but it hasn't won over many consumers.

Now was supposed to be the boom time for the young video technology, pitched as a high-definition replacement for the DVD. In January, consumer electronics company Toshiba dropped support of rival format HD DVD, ending a competition over which technology would take root in living rooms.

Both technologies were designed to take advantage of the picture resolutions offered by new, high-definition TV sets with a level of image quality that the standard DVD is not capable of producing. The new players for both technologies can also play DVDs, and each format uses media that looks like the same silver discs movie fans have been popping into their DVD players for years. But both require users to upgrade their movie collections and buy the more expensive new discs if they want to enjoy the benefits.

Though neither Blu-ray nor HD DVD thrived last year, analysts pinned the low sales on consumers who were reluctant to spend money on a new technology that might turn out to be the loser in the competition.

But even without competition, Blu-ray is still struggling, according to some recent sales figures. According to research firm NPD Group, sales of Blu-ray players dropped 40 percent from January to February. The next month, sales rose 2 percent.

Blu-ray Disc Association spokesman Andy Parsons said the NPD numbers are misleading because they demonstrate a weakness in player availability, not in consumer interest. No manufacturer or retailer anticipated a quick, decisive end to the format war, so none had a deep supply of the players on hand when it became clear that Blu-ray had won, he said.

"There was a sudden increase in demand when there was a sudden decrease in supply," he said.

Brian Lucas, a spokesman for Best Buy, agreed. "When the format war ended, we didn't do as much promotion around [Blu-ray] as we would've liked," Lucas said. "We didn't want to send people into stores where there wouldn't be players." Lucas said that player supply has been improving.

Other research doesn't make the coming months look much more promising for the young format. A recent Harris Poll found that only 9 percent of consumers who don't own a Blu-ray player have an interest in buying one during the next year.

"I think people are price sensitive," said Joan Barten Kline, vice president of the interactive media and entertainment division at Harris, who said she thinks the number of buyers will be below that 9 percent figure. In any case, she is among those buyers. She recently went shopping for a movie player and found Blu-rays selling at about $400 and DVD players selling at under $100. She opted for the DVD.

Michael Gartenberg, a consumer electronics industry analyst with research firm Jupiter, said that the new format should be selling faster by now but "Blu-ray has not come up with a compelling message for the mainstream consumer."

"During the course of the battle, consumers lost interest in both formats," he said

While many home theater fans are skeptical that digital files and download service could ever replace optical media such as the DVD or Blu-ray discs, Gartenberg pointed to products and services such as AppleTV and on-demand services from cable companies as examples of how consumers have more options than they did when the DVD made its debut.

Just this week, DVD rental service Netflix and device manufacturer Roku created much buzz with a new product they have devised that will make movies available through a download.

Another hurdle facing Blu-ray, analysts say, is the fact that many DVD players can use sophisticated software to improve the quality of the picture to near-high definition. View the pictures of an "upconverted" DVD next to that from a Blu-ray, and it's still easy to tell the difference, "but for most consumers who will never see the two side by side, it's good enough," Gartenberg said.

Today, about 35 percent of DVD players sold are able to upconvert, according to ABI Research. The firm estimates that figure should be about 60 percent by 2013.

To help build excitement for the Blu-ray format, some studios are including new features that they hope will spark interest among consumers.

A new wave of Blu-ray players will connect to the Internet, opening up a new range of features that studios will be able to offer. Pop in an upcoming Blu-ray release of "Sleeping Beauty," for example, and the main menu will feature an image of the movie's castle. Thanks to the Internet connection, if it's raining at your house in Arlington, the Blu-ray software will produce rain on the castle on your TV. For its recent release "Walk Hard: The Dewey Cox Story," Sony has been giving Blu-ray owners access to downloadable extra features that the studio didn't have time to include on the disc.

There's a catch, though: Not all Blu-ray players will be able to take advantage of the new features that Web connectivity allows.

With that in mind, ABI Research analyst Steve Wilson said it is just as well for consumers if they don't jump on the Blu-ray bandwagon yet. Wilson said he expects Blu-ray players to drop to $250 by this holiday season and $200 by the end of 2009. That's when he expects mainstream adoption of the movie format to catch on.

"We're still at the very early stage," he said. "The players don't even support all the features yet."