Re: Toshiba, MS, and Panasonic started a working commitee on DVD2 format, recreating HD-DVD experience on DVD

Perfect example. Lost Season 3 Blu-Ray could easily fit on 2 maybe 3 disks. They have chosen to release it on 6 Disks. The preception of the consumer getting more for their dollar entices sales. Deadmeats facts are straight. I worked for a large retail chain, and know of the DVD pricing. We used to take hugh losses on DVD, when the format first hit the market. But with out the sales, customers were reluctant to spend $26.99 on a new release DVD.

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Perfect example. Lost Season 3 Blu-Ray could easily fit on 2 maybe 3 disks. They have chosen to release it on 6 Disks. The preception of the consumer getting more for their dollar entices sales.

This type of strategy does happen, but I don't think Lost S3 is a very good example. The episodes total 991 minutes and the bonus featurettes (many in HD) are about 216 minutes. That's about 20 hours of HD. 7-10 hours per disc of HD content is asking way too much. I'll take audiovisual quality first (on which this set has ranked very well). Isn't that the whole point?

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I am trying to prove that Blu-Ray is not that profitable to studios as you make it out to be. It's just $4 more income per disc than DVD to studios, but 1/100th the sales of DVD.

Currently with day and date releases this could be true. However, since hi-def may only represent 1% of total sales, even more reason why the studios would want to grow this market! Note that the price (and margin) disparity widen after the few few months after a day & date release has blown its load, with drastic undercutting of prices in order to move standard DVDs. New HD owners will continue to buy these high-def counterparts as they enter the market place, many weeks, months (or even years) after its day & date release. You also miss the point of getting consumers to double-dip, or at least become interested in catelog releases of standard def counterparts they might have rented in the past.

Even if the profit differential you mention above (for day & dates) is true, it sure wouldn't be if you added the extra authoring cost for 2.0 above that are not required for standard DVD - the margins between the two formats would be widened further. But authoring is a MINOR one-time cost, compared to marketing and distribution - which are pretty fixed and equitable for either format.

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Half to one third of BD-J authoring.

I'm not hear to provide you lessons on Sonic's GUI authoring tools, but let's just say I question such a claim. Regardless, authoring of a disk is a one time cost. A MUCH bigger cost for "2.0 DVD" (and Blu-ray titles that support it), is authoring the Internet content itself, paying for provider fees and communication costs on an ongoing basis, and maintaining the site with new compelling content on a periodic basis for EVERY 2.0 DVD title released.

Of course we'll keep the additional costs above and beyond standard DVD associated with new Microsoft royalties a secret.... shhhh.

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Anything that helps to improve DVD's sales helps the industry, hence the initiative to improve DVD.

Will it? Really? How? To whom?

Lets face it, the only reason why Microsoft would be desparate for this is to get their technology into the royalty rhelm of standard DVD, now that they failed with high definition media. It's doubtful the studios would fall for it. Microsoft has a better chance if they concentrate on getting HDi into downloaded and streamed IP media content.

[Post edited by Skyhawk on Mar 17, 2008]

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If I had a choice in this situation I rather buy the Blu ray at $24 with everything that the 2 disk DVD special edition has and still be able to sit in my chair and not switch disks.

Well, the difference is that you could take and play back your DVD2 everywhere, while you can't do the same with Blu-Ray.

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Well, hd costs will only come down once production expands.

With Blu-Ray, $199 is really really difficult due to $60 player royalty and the restriction on who could make those.

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Why would they go for smaller margin over higher volume? Simple. You can resell all the movies you have ever made on dvd, on Blu-Ray.

"Double dippling effect" is exaggerated.

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As for this DVD2, it makes no sense to the studios to make the switch when the upgrade doesn't satisfy the price. (Even if prices were the same, nobody would rebuy a movie they already had so they can use internet connectivity)

The idea is to increase purchase rate by giving consumers the extra-content that makes a title worth to keep instead of renting once.

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If you just settle yourselves out and start buyin BR and BR movies prices will come down and soon enough you will be buying 20$ BR's and such.

One thing, Blu-Ray can never match DVD's penetratio rate. Why? Because less than 20% of US households have HDTV sets.

Prior studies by Toshiba and Microsoft concluded that HD itself wasn't enough of a draw to get people to switch, and this is why HD-DVD had fully operational networking and interactivity from day 1.(Microsoft's former HD-DVD head Amir was kind enough to release classified info once HD-DVD died). This isn't the case with Blu-Ray, Blu-Ray's interactivity is broke and networking is not even standard. The shocking and once-secretive conclusion from Toshiba and Microsoft that HD alone isn't a draw is the reason Toshba and Microsoft are working on DVD2. Super-Upconversion will further erode any little incentive left to switch to Blu-Ray, because Super-Upconverted videos do look good and full of fine details, this is no mere "blow-up" scam.

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prices will come down in a few years, because the market trend and the nouveau riche favor BR and HD.

Blu-Ray drive price.

Now : $85 drive + $30 Blu-Ray royalty + $5 DVD royalty = $120 wholesale.
Future : $42.5 drive + $30 Blu-Ray royalty + $5 DVD royaty = $77.5 wholesale.

The built in royalty of $35 for drives and $75 for players prevent Blu-Ray players from dropping below $200 MSRP. To hit $200, a Blu-Ray player has to be built for just $60!!!!!!!!

Yes, $60!!!! Now that's years ahead.

Blu-Ray isn't going to follow the pricing history of DVD, it's going to follow the pricing history of VHS where the machines sold for an average of $300 throughout its life.

A possibly good news for DVD

http://www.tgdaily.com/content/view/36498/98/

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So, how will the content industry react to this dilemma? Our sources told us that big price cuts are on the way. Apparently, DVDs are expected to settle at the $10 range, while Blu-ray discs (single discs) will be aiming for a $20 target.

Well, $10 DVDs will make sure that the format never dies out. Super Upconversion helps a great deal too.

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What studios have to in the "interim" is to concentrate their marketing effort over the next several years in pushing our single new high-definition optical disk format, especially as the penetration of HDTV displays grow in the marketplace. They continue to make their bread 'n' butter currently from day & date releases on DVD.

I think most big corporations are going to make more conservative business decisions. BD is still relatively uncertain as a business model. And it certainly doesn't stop them from investing in the upcoming technology while they continue to maximize profits on current ones.

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This is more logical from a business point-of-view than offer yet another standard definition format whose initial demographic would largely overlap with the HDTV owners they are attempting to target for Blu-ray adoption.

That would only make sense if there was an absolute certainty of the BD market. I think that even at $200, the vast majority of households wouldn't be picking up a BD player. Especially when movies for the player are running easily more than $20 per. It's gonna be a slow road for consumers, especially without a competing HD format to really drive the CE's to be more price competetive.

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Cannibalizing your own market by investing in a lower margin item that offers the same standard definition, along with higher authoring costs, additional space usage in an already constrained media, that requires new equipment of an unknown price, that requires an internet connection in people's living rooms, that will likely not tempt consumer double-dipping, and offering features that have questionable value to the mass consumer is business suicide.

How much space do you think HDi actually takes up? I've heard anywhere from 20 MB to 100 MB on HD-DVD discs depending on how nice they want to make it look (My speculation leads me to believe standard def versions might even take up less space). But even at 100 MB, few movies will really be constrained here. And again, it is not required that movies use the 2.0 format. The other thing you repeatedly miss is that it only requires a consumer to upgrade if they want to use the new functionality.

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it only requires a consumer to upgrade if they want to use the new functionality.

You bet Xbox 360 will be firmware upgraded to playback DVD2 on day 1.

Not eveybody has a XBOX 360 or a HDDVD player, but they do own at least a standard DVD player. The point is that how can DVD2 be a benefit to current non-XBOX or HDDVD owners. I can't see the justification in buying a new player just for bonus features and not the benefits of 1080 resolution or Hd audio codecs. I wish that I could wager you that DVD2 would not take off.

When did they speculate the DVD 2.0s would luanch?

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I can't see the justification in buying a new player just for bonus features and not the benefits of 1080 resolution or Hd audio codecs.

You get Super Upconversion too(960p native).

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When did they speculate the DVD 2.0s would luanch?

End of this year if they are lucky.
2009 if not.

Once a formal spec is agreed upon, the implementation is rather fast because all the components(HDi and Super Upconversion) are already available.