Blu-ray is getting a bad rap from some. In May, Bill Gurley (of abovethecrowd gave a keynote talk at AlwaysOn's OnHollywood. His focus was the extreme dynamism within the current online/Internet world, and his crystal ball projections for the future, near and far. Mr.Gurley has the chops in the market space to do this sort of thing, and the track record to back it up. But I think he's made a bad call on Blu-ray.
Gurley asserts that "Blu-ray has been Betamaxed". In other words, he believes the technology has not enjoyed wider-spread adoption because consumers view it as a lame duck not worthy of investment, and soon to be replaced by pure digital delivery. There are, in fact, a multiplicity of a factors slowing Blu-ray adoption, but consumer perception of Blu-Ray as a "useless" technology is not one of them. The format war was a big downer on sales, and we're just a year or so out of that. Players and media are also still much too expensive, particularly when you consider that we're in the middle of a global economic crisis. Then there's the hard fact that Blu-ray is nothing without a full 1080p monitor, another big ticket item that has just entered wide consumer distribution and awareness.
Consumers just don't (and shouldn't) see a big difference between a DVD upscaled to 720p and a Blu-ray disc downsourced to 720p. So I posit that lukewarm consumer adoption of Blu-ray is linked to a number of very natural market forces, not perception as a limited-life technology. (Then again, I've owned a few LaserDisc players) Still, with all this, market research firm NPD Group reports that Blu-ray player sales were up 72% in Q1 of this year.
"But wait," some will say, "Studies from Netflix and others do show data that digital distribution adoption is outpacing Blu-ray." Great, but so what? I stream VOD HD content on a FiOS 21mbps connection via the PlayStation network, Xbox Live and other services and the experience is nowhere near the same as viewing a Blu-ray disc. Digital distribution is not a replacement for Blu-ray. (Despite recent announcements from Microsoft). The two can coexist peacefully, and Blu-ray is even enhanced by Internet content distribution using BD Live. In any case, Netflix is also reporting that Blu-ray subscribers are up 40%. So Blu-ray users are growing pretty quickly, just not as fast as digital. Mr. Gurley does make a good point when stating that without a radical shift in digital rights agreements, digital distribution of "studio" content will not rest in the hands of aggregators. So you'll have to be content with streaming vintage TV and indy productions on your Roku box or via Xbox live for quite some time.
Digital distribution has other limiting factors beyond licensing. Let us not forget the lingering threat of
bandwidth throttling by ISPs, which would adversely impact Internet distribution (streaming or otherwise) of HD content. As well, people like to physically own media. Digital files don't generate a similar tactile vibe, and an awful lot of us have that "collector" or "backup" mentality, where owning the physical media gives us a warm comfy feeling.
Rather than taking shots at a very viable technology, what Gurley and others should be doing is taking the studios and related Blu-ray disc producers to task for not leveraging the extensibility and sheer possibilities of the Blu-Ray format, which can do absolutely crazy things with interactivity and "extras" content. If the experience can't be had any other way, people will buy the hardware.
