Friday, February 29, 2008

Sorry, David


I turned on CNBC this morning, and what did I see but a rant (and rant is the only word I can use to describe it) by David Pogue assailing online movies and defending Blu-Ray. (I can't find it on the New York Times site, and Windows Media Player is crashing both IE7 and Firefox before I can get the URL for the video from the CNBC website, so click here to read his article.) (UPDATE: The video is now availabe on the New York Times website; click here to view it.) I've already dealt with most of his arguments in previous posts, but there was one that I missed: Since only 50% of the U.S. population has high-speed Internet connections, the other 50% can't get access to online movies.

That's entirely true, but think for a minute: If you can't afford or live in some place too rural to get a high-speed connection, how likely is it that you'll have a big-screen HD display? Not very. It's even less likely when you consider that a 1080P display is needed to get the full value from Blu-Ray. As I wrote in an earlier post, less than 30% of all households now have HD monitors or receivers of any resolution, let alone 1080P. An upscaling DVD player will work fine for most people, at a cost of 50% less than a Blu-Ray player.

In fact, Pogue inadvertently made my argument for me. By the time there are enough HD monitors and receivers in households to make Blu-Ray a viable business for either consumer electronics manufacturers or movie studios, the problems of online movies will largely be resolved. For the vast majority of people in North America, there's no reason for them to buy a Blu-Ray player, unless they're already buying a Playstation 3 or PC with a Blu-Ray drive.

Thus, I believe the transition will go from DVDs to downloads and streaming. Just as DVD-Audio and SACD were touted as the next generation of CD but were bypassed by downloads, DVD will live on, and Blu-Ray will be bypassed by downloads and streaming.


poguenyt said...

No, no, no--you've completely missed the point.

Watch the segment again: I said "Long live the DVD," not "Long live Blu-ray." I have no expectation of Blu-ray's success one way or another.

The rant was dedicated exclusively to people who say that the DVD age is over, because Internet downloads will make plastic discs irrelevant.

My point was that Internet movie downloads will not become the dominant distribution channel for movies for many, many years. That DVD (and, in fact, probably NOT Blu-ray) will remain the most popular channel for a very long time.


Unknown said...


As noted in my post, I couldn't rewatch your segment before I filed my blog, since I couldn't find it on the Times website (and believe me, I looked,) and I couldn't play it from the CNBC site. However, after receiving your comment, I looked again on the Times site, found it and watched it.

I agree that you're not proposing Blu-Ray as the successor to DVD (although I did note that you were holding up Blu-Ray discs the entire time--sorry for being packaging-aware.) However, in my previous posts, which I referenced, I addressed your "six arguments for the elimination of online movies." I agree that DVDs still have a long life, but it's a life like CDs had after Napster; the handwriting is on the wall.

One point that I also made in previous posts, but that I admit was somewhat oblique, was that cable, satellite and IPTV VOD services should also be considered competitors to physical media. In fact, it's my contention that the market for ANY third-party set-top box is limited by complexity and customers' reluctance to add yet more hardware to their home theaters (witness Tivo's struggles.)

Although Warner Bros.' tests indicate that simultaneously releasing movies on DVD and VOD increases sales and rentals of both, I don't believe that will hold true indefinitely. At some point, VOD, downloads and streaming will eat away at DVD sales. However, I think that the studios are somewhat more enlightened than the record companies, and their support for "plastic-free" viewing will happen sooner then the heat death of the universe.