The next-generation DVD format war limps on in the coming weeks as Blu-ray - one of two formats vying to become the high-definition standard - officially launches its first player and titles.
The launch previously was pegged for May 23 but pushed to late June so studios and hardware companies could better coordinate a kickoff. The first wave of titles will arrive June 20 from Sony Pictures/MGM Home Entertainment, with more following in the coming weeks from Sony and Lionsgate. But two of the three Blu-ray players scheduled to hit stores for the launch have, in the past week, been delayed. Sony pushed its launch from June 30 to August 15 and Pioneer from June 25 to September. A Samsung unit will be the sole player on the market on June 25.
It's a flagship piece, and we want to make sure it works perfectly, says Russell Johnston, senior vice president of marketing and product planning for Pioneer Electronics (USA), when asked about the delay. He hints that the hardware was not performing as expected.
Blu-ray's competing format, HD DVD, enjoyed a similarly underwhelming launch when a small number of titles and players from Toshiba hit the market in April.
Regular consumers aren't paying much attention to this, says Laura Behrens, an analyst at Gartner Research. It's too confusing at this point, but HD DVD is doing well with early adopters.
Both camps are not making a big of bang as I would have expected them to make, Forrester Research analyst Ted Schadler says.
It doesn't seem to have been really well executed in the initial outlay, Newbury Comics DVD buyer Larry Mansdorf says. Having these competing formats is difficult for retailers and consumers alike.
The Consumer Electronics Assn. estimated in December that Blu-ray and HD DVD players will generate $480 million in sales in 2006, surpassing $1 billion in 2008. But the CEA says it is revamping those figures because of delays, with new estimates expected in July.
While Blu-ray has not proved it can get to market yet, the format has the advantage of being backed by more studios, more hardware companies and the best-selling gaming console - Sony's PlayStation.
Having so many studios aligned with our format, it's going to be powerful to have so many titles, Johnston says.
Of the six major studios, Universal is the only one backing HD DVD exclusively. Paramount and Warner Home Video are backing HD DVD and Blu-ray, and 20th Century Fox, Buena Vista/Disney and Sony are backing Blu-ray exclusively. Additionally, Lionsgate is backing Blu-ray, and New Line Cinema is backing both.
The music business is beginning to choose sides as well. Sony BMG is backing Blu-ray, and has scheduled Rod Stewart, Live at Royal Albert Hall and John Legend, Live at the House of Blues for release on the format this summer. Universal Music Group is backing both formats, but no titles are scheduled for release, and EMI and Warner Music Group have yet to decide.
Next-generation DVD is coming at an important time for the music business. According to year-end shipment numbers the Recording Industry Association of America released earlier this year, music DVDs were down in 2005 - the first decline since tracking began in 1998. The category posted increases of approximately 50 percent in 2003 and 2004 but slipped 3.8 percent in 2005, to $539.8 million in shipments. The overall DVD market is showing the same trend, thanks to consumer collection saturation levels and other consumer options, according to NPD Group analyst Russ Crupnick.
While it's too early to project a winner in the format war, an unintentional beneficiary may already be emerging - the gaming industry.
By bundling Blu-ray drives with the upcoming game consoles for PlayStation and making the new Xbox ready for an outboard drive, the consumer view of gaming products is shifting in a significant way.
Increasingly consumers think about their gaming console as a DVD player, CEA director of industry analysis Sean Wargo says. For the previous generations - Xbox and PS2 - it was something that was nice to have. Now it's become a required feature that it will play DVDs. Consumers now look at this as a multifunctioned device and not just for games anymore.