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Blu-ray Maintains Edge Despite ‘Transformers’

Posted by Dave Cowl on October 25, 2007 
Filed Under: Blu-ray, Format War, HD DVD, Studios



Home Media Magazine is reporting that Paramount Home Entertainment’s release of the DreamWorks theatrical blockbuster Transformers exclusively on the HD DVD format didn’t tip the scale last week.

Consumers bought more Blu-ray Discs than HD DVDs for the week ended Oct. 21, albeit by a slim 51% to 49% margin.

While Paramount was claiming 190,000 units sold, Home Media Magazine market research and studio estimates puts the actual number of units that sold through to consumers closer to 115,000.

Related posts:

  1. Transformers HD DVD Sells 190k in First Week
  2. Paramount’s HD DVD Decision Decried by Analysts
  3. Blu-ray Disc Leads First Three Quarters of 2007 Almost 2 to 1
  4. Spider-Man 3 is Sony’s New Best Seller
  5. Blu-ray Revenues Up 30% For Week Ending August 31st

Comments

22 Responses to “Blu-ray Maintains Edge Despite ‘Transformers’”

  1. Kevin on October 25th, 2007 10:44 pm

    Gee, neither you nor Home Media magazine thought it might be germane to mention the Blu-ray 2-for-the-price-of-1 offer than ran that same week. If Blu only cleared 51% while selling discs at half price, they are in real trouble going forward.

    I note that neither you or Home Media mentions the last 3 months sales, either. Always the “first 9 months.” Do you write these yourself, or does the BDA just fax you your copy?

  2. Dave Cowl on October 26th, 2007 12:18 am

    My, seems like a nerve was hit there.

    I was just reporting the HMM story. I think most of us are familiar with the battle of Transformers week.

    BTW, the last three months are part of the first nine months. I am not sure what your point is there.

    When you say If Blu only cleared 51% while selling discs at half price, they are in real trouble going forward without noting that it was the week of the release of what is likely to be one of the top HD DVD titles of the year, it seems that your perspective somewhat biased.

    Keep in mind that somewhere in the order of 120-150k discs sold on both sides that week. It was not ordinary week for either side.

  3. Segarsj on October 26th, 2007 8:35 am

    @Dave

    While Kris might be getting a bit flustered, I don’t think he’s wrong. You’ve said it yourself, Dave.

    “Personally I think the media pricing is more important than the player pricing – something we saw recently with the ‘half off’ sales.

    If HD DVD really wants to make progress I think they need to price better than Blu-ray Discs, not the same or more.”

    Granted, this wasn’t the focus of the article, but it’s most definitely a factor. Imagine if Disney hadn’t run the offer, which was a deliberate strike at HD DVD to counter the Transformers release. I expected as much, and sure it’s business, but I do think that it’s more than relevant here, and as Kris has previously stated, the fact that Blu-ray didn’t KILL HD DVD with the B1G1 offer doesn’t entirely bode well for Blu-ray, and the reason? Lack of consumer awareness of the format, or lack of consumer interest. You have all of the elements you need to drive sales: millions of compatible players, incredible sales incentives, and an attractive film library. However, Blu-ray only managed to lead by a mere 2%, while HD DVD has closed the gap substantially from their once 30% market share. Granted, this data is only for the week, and not since inception or YTD, and while HD DVD didn’t take the lead, its still a sign of vitality for HD DVD, and it demonstrates that HD DVD owners possess an almost equal amount of buying power compared to Blu-ray owners, in spite of the nearly 6:1 lead in hardware.

    If that’s not significant I’m not sure what is.

    I hope you realize that I’m not attacking you, but I’m merely trying to illuminate some of the details that many people have either chosen to ignore or failed to realize amongst this unprecedented sales rush.

    The point is that it’s all to easy to declare Blu-ray victorious because of their marginal sales lead, but there is just so much more going on behind the numbers that no one seems to give much credence to. If you yourself say that it “was not an ordinary week for either side” then you are clearly acknowledging the sales boost due to Disney’s B1G1 offer, right? So, my question is this. What do you believe would have happened if Disney didn’t go through with their offer? Would Blu-ray have maintained their coveted sales lead?

  4. Dave Cowl on October 26th, 2007 8:58 am

    I don’t doubt for a second these two things:

    1) With no BOGO, BD would have lost the week significantly

    2) It was intentionally timed.

    No doubt the BDA was aware that Transformers would post big numbers. People have estimated that an average week is say 20k BDs and 12k HD DVDs just roughly. With no sale, we would have seen roughly 20 vs 117, or 15:85 in favour of HD DVD. That is clearly something that not going to look good at all. So BD had a sale and sold in the order of 6 times their normal volumes.

    Of course these numbers are all very rough, but you get the picture. The BDA was seriously faced with a disaster week if they didn’t act.

    It will be interesting to see two more things.

    1) What happens this week (ie, next week’s numbers). With no sale and Transformers still selling, what will the ratios be like? Could HD DVD win this week? I think so.

    2) What will HD DVD do for Spiderman week to avoid low numbers, possibly even single digit..??? If the Spider-Man sets + single disc can sell 250k and HD DVD is back to 12k units, it could be very ugly. I suspect that there will be more than 12k units since Transformers will be only 2 weeks old and there are a lot of releases from Oct 23 that will still be selling better than the older titles.

    As for the last question, I worked out that even with next to zero BD sales, the YTD sales ratio would not be moved beyond 60 in favour of HD DVD. As it stands I expect it to move to 63-64. We shall see I guess. So in the YTD sense I don’t expect any of the HD DVD releases to reverse the BD advantage. 2006 went to HD DVD. 2007 is pretty much a done deal for BD. What 2008 holds is anyones guess :D Unless you were just talking about the week, in which case the answer is above.

  5. Dave Cowl on October 26th, 2007 9:11 am

    Wow – it looks like YTD only moved to 65 and Since Inception didn’t change. That is less movement than I expected for sure.

    The other interesting chart shows that the second place HD DVD (Knocked Up) was outsold by almost 40x, putting it around 3000 copies. So the whole week really was Transformer, and everything else was pretty insignificant…

  6. Segarsj on October 26th, 2007 9:37 am

    While I’m not a fan of Blu-ray, I’m just happy that HD sales in general are on the up-and-up, because otherwise neither format would be around for very long, and for what it’s worth I’m just glad to be enjoying some great movies in HD.

    I think that HD DVD has a ways to go in order to level the yearly/since inception figures, but I do believe that once hardware sales start to extend into the millions, we will definitely see a sales increase for the software. It’s inevitable.

    At the same time, Blu-ray already has the players in place, so all they would need is to prime the consumer knowledge, and trigger consumer interest, and the same could be said for Blu-ray as well, that sales would begin to go vertical.

    The main question that exists right now is, who will get there first? Will neither, or will they arrive at mass market absorption at the same time?

    One thing that is most interesting to me is that at some point, the promotions for one format will inadvertently promote the other. To explain further, once the mass consumer audience purchases an HDTV and is hungry for more HD content, it is almost impossible to hear about one and not the other.

    It’s all very complex, and it’s nearly impossible for anyone to predict how this whole situation is going to play out, but where I once thought that it would all come to an end in early 2008, it seems as though we will be right here, a year from now, talking about the same damn things, haha.

    As time rolls on I’m beginning to fear more and more that both formats will end up co-existing together. I suppose it’s better than both dying or one being obsolete, but having two players is far from desirable, but I suppose that’s the price we pay for being early adopters, right? :)

  7. Mi on October 26th, 2007 1:47 pm

    OK, how about we do this: we go in total sales $ for the week, so we can see who really made the most? That will negate the ‘buy one get one’ sale.

    Only problem is that you have to subtract the $150M that hdvd already paid for Transformers. I think BD will still come out on top.

    In all seriousness though, if a format that is viable has the BIGGEST movie of the year exclusively, they should be able to get over on any other format, with or without a big sale.

    However, I too am interested in seeing sales stats on how many BOGO’s were moved.

  8. Mi on October 26th, 2007 1:50 pm

    Check that, should say ‘any other comparable format’. Obviously hdvd nor Blu-Ray will beat DVD with any title on any given day.

  9. Segarsj on October 26th, 2007 3:37 pm

    @Mi

    Well the real problem is that, like you’ve gone on to point out, both HD DVD and Blu-ray have a common enemy, and that’s DVD.

    In order for them to finally topple DVD sales, you need everyone who is buying DVD’s to stop, upgrade to an HDTV (if they haven’t already) and buy into their format of choice, if not both. That’s a lot of money, but with prices dropping on both sides, and HDTV adoption on the rise, sales will surely follow, but it will take longer than anyone had expected.

    I personally think that this holiday season is going to be huge for HD in general, and it will be interesting to see whether or not Blu-ray or HD DVD stand to benefit greatly from the increase in HDTV sales.

    I think that as for right now, there is a virtual ceiling which the sales on both formats have hit. In the case of HD DVD, there just aren’t enough players out in the wild to generate the same sales we continue to see with DVD.

    As for Blu-ray they have millions of players, but they are suffering from a lack of consumer knowledge (in spite of their advertising), and/or a lack of consumer interest (and perhaps that stems to HD DVD as well).

    The point is that both are in a predicament here, and the only thing that I see holding them back is the HDTV adoption, or lack thereof.

    No studio, or format, will be making millions of dollars on HD media until just about everyone you know has an HDTV. I believe that’s one of the main deterrents for all of the millions of PS3 owners out there. They either 1) Don’t have an HDTV yet, or 2) Don’t see the difference/Don’t care. Personally, I don’t agree with the second response in the least bit, but that’s what I’ve heard from more than a few people. There are people out there that claim “HD” just isn’t that great, or that they “can’t tell the difference.” My response is usually that they need to get their eyes checked, or that they’re just lying to themselves, waiting for prices to drop within their range before they snatch up an HD set of their own.

    All I’m trying to say is that it’s very unrealistic to expect millions of discs sold per title this early in the game.

    We’ve got a long way to go before then.

  10. Dave Cowl on October 26th, 2007 4:05 pm

    Ok, when I look into my crystal ball, I see this:

    If Warner drops HD DVD, HD DVD dies and BD goes on to fight with DVD…

    If Warner drops Blu-ray, we have a split studio situation that will never resolve. Players will become dual format and together both formats will fight DVD – possibly less successfully than a single format.

    I think the reality is that unless Warner drops HD DVD, HD DVD will survive into the longer term.

    I don’t see BD ever going away no matter what. Sony won’t let it – they will prefer the split studio support result to accepting and releasing on HD DVD. That plus the PS3 will always need BDs. The other exclusive studios could add HD DVD support but in reality once dual mode players become more common it will not matter if studios only do one or the other…

    To avoid the dual player scenario, Warner will have to drop HD DVD Q1 2008. Otherwise I think it is the inevitable result.

  11. Dave Cowl on October 26th, 2007 4:11 pm

    BTW, http://www.deadlinehollywooddaily.com/ has stated that the Videoscan point of sale data shows 89,871 units sold for Transformers. The same number for 300 on BD was 107,351. It looks like the claim for top HD disc of the year was not correct and that 300 on BD still holds the record. Regardless of that that record actually is :D

  12. Kevin on October 26th, 2007 8:35 pm

    Dave–

    I agree that if Warner drops HD DVD, Blu wins. But I think that if it goes the other way (and that is more likely for a number of reasons, such as Warner having started as a HD DVD backer), that Blu will eventually be marginalized.

    Warner can move things from 60-40 Blu to either 80-20 Blu or 40-60 HDDVD. They are a huge studio, especially when you add TV. If they go to HD DVD, the momentum favors Toshiba.

    Now will either thing happen? Player sales will be part of it, as will demographics. Currently Blu’s reliance on PS3 owners limits the types of films that will sell well. Not a lot of chick flicks, for one example. OTOH, Die Hard 3 will be a huge hit.

    Given that Toshiba A2s (and likely A3s) are going for $198 at Wally World (what ever happened to Funai?), and Amazon sells A30s under $300 every so often, it’s up to the BDA to get a $200 name-brand blu-ray player out there. Maybe they can close out their 1.0 machines. But if they leave the impulse buys to Toshiba, they can expect bad news from Warners in January.

  13. Dave Cowl on October 26th, 2007 10:32 pm

    If Warner goes to HD DVD I figure it is close to a 50/50 split. Which will drive to dual players being the logical answer, rather than players dedicated to either format.

    I wouldn’t read too much into the Walmart A2s – $200 has to be a close out price – otherwise there is no room for anyone other than Toshiba to make HD DVD players. Toshiba has monopolized HD DVD players up until now with pricing that makes any Japanese player unprofitable. At $200, the Venturer and the like become unprofitable as well. Single sourcing the hardware is a big mistake in my opinion…

    In any case, for HD DVD to win Warner they need sales. For BD to win Warner they need ’1.1′. I guess we will see if either ‘makes the grade’ in early 2008…

  14. JC on October 28th, 2007 5:58 pm

    I just want to say for the record- I have never posted a message on this site and I just recently started checking this site periodically thinking it was an impartial format news site- going through past and present postings this is so transparently a pro blu-ray site – why dont you just be honest with your site name? I am taking you off my favorites and looking for a more reliable site like Hi-Def Digest….

  15. Kevin on October 28th, 2007 11:40 pm

    Actually, they need 2.0 (or at least ethernet) AND they need consistency of BD-J among players AND they need to be convinced that there’s someone besides game geeks buying blu-ray disks.

  16. Segarsj on October 29th, 2007 8:01 am

    I think that it’s very easy for us to claim that HD DVD is subsidizing the hardware costs because they don’t have as many CE companies behind them, but couldn’t we just as easily say that HD DVD hardware has declined steadily in price along with the market/demand, while Blu-ray continues to overcharge for their “next gen” technology?

    I think they enjoy the price disparity for a number of reasons, not the least of which is making more per sale, because we can assume that they are selling the players far above cost at this point. The other benefit to the price disparity in their eyes is that they can paint the picture of HD DVD being desperate. However, I think it’s shortsighted and most definitely to decry that the other side is the only desperate party here. Both are struggling to keep their heads above water and woo the average consumer. I maintain that price is the ultimate factor here in securing the average consumer who is more than happy with DVD. If they didn’t buy into DVD until players were around $150-200, or even less, then their mentality is “why should I drop twice that much on a player that is not a sure bet, and looks a bit sharper/clearer?” The point is, we will not see a mass exodus from DVD until the price is just right, and HDTV’s are in nearly every household. This holiday season will bring us one step closer to that day, and I think that at this point in time HD DVD stands to reap the benefits from impulse HD shoppers, and if that price point remains uncontested then the market saturation for HD DVD could rise exponentially.

    While the price would suggest a clearance item, a senior Walmart Executive was quoted as saying that there was no limit to the amount of A2′s at their disposal. If that truly is the case, and HD DVD pulls of a masterful advertising campaign then the tides will turn in favor of HD DVD once more.

    It’s surely going to be a crazy holiday season. That much is certain. I just hope that HD, in general, makes a lot of progress this go around.

  17. Segarsj on October 29th, 2007 8:24 am

    I just found this on a Black Friday site.

    It would appear that Sears is going to be selling the new entry level player, HD-A3, for a mere $169.99 on Black Friday.

    http://blackfriday.gottadeal.com/BlackFridaySales/Store/Sears/Category/All/Rebates/yes/EarlyBirds/yes/Page/5

    Not too shabby, eh?

  18. Dave Cowl on October 29th, 2007 9:44 am

    I just don’t buy that the A2 will continue manufacture when the A3 is no doubt more cost effective. How does it make sense to sustain selling the less cost effective unit at less retail?

    The Sears deal is more like what I can see as an enticing promotional deal. 5 hours at a good price.

    In any case it will be interesting indeed. So far the cut price players has not caused so much as a blip on the software sales chart, and I personally don’t expect this latest pricing move, regardless of its ‘meaning’, to make measurable difference either.

  19. Dave Cowl on October 29th, 2007 12:18 pm

    I read a post by a usually reliable insider type that the Walmart A2 inventory is around 50k units and that the Sears promotion is around 20k units.

    Not saying it is absolutely the case, just another data point…

  20. Kevin on October 30th, 2007 1:15 am

    That Sears deal seems to mean that the A3 will be at $199 list by then. I can’t see Sears doing a Crazy Eddie 45% discount.

  21. Tyler Pruitt on October 30th, 2007 3:32 am

    JC,

    I would suggest subscribing to our RSS feed, so you then can look back at the posts from day one.

    I think you would then have a different opinion.

  22. Dave Cowl on October 30th, 2007 11:18 am

    It will be interesting to see if $199 becomes the A3 retail price. Poor Venturer will have to even lower to sell any players at all – I wonder if that is what they signed up for.

    Toshiba’s player pricing strategy is pretty much the reason that they are the sole source. There is no money in it for anyone else…

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