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Old 02-22-2008   #397
Vinyl Rules!
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Default Re: HD Disc Format War Not Over By a Long Shot

Originally Posted by DaViD Boulet View Post
But the discs would cost more... a *lot* more to make versus standard DVDs.

If software providers can't make money selling something, why would they make and sell it?

BD replication costs will continue to fall and should eventually approach DVD prices (though probably never meet them). However, a dual-format disc is a 4-layer structure that will always cost more to manufacture than a standard DVD or BD.
As I see it, Sony has two choices.

(1) Keep pressing Blu Ray only DVDs. But then they're asking retailers to double inventory new releases, and the number of total back titles will likely never approach that already on regular DVD.

(2) Bite the bullet and figure out a way to put both formats on a single disc. Retailers don't have to double inventory and potentially more titles become available.

But a major complicating factor is that it was relatively easy for a standard DVD plant to convert to HD-DVD, whilst it is much more expensive and difficult to convert a standard DVD plant to Blu Ray.

One valid criticism leveled at Sony was limited pressing capacity for Blu Ray. Now that they've won, there is going to be much more demand for Blu Ray and a lot of plants are going to have to make the conversion to Blu Ray.

Sony has an interesting business decision to make. Option (1) gives them higher software margins per disc, but probably lower volume sales. And it may well accelerate the market shift to downloads and HD VOD.

Option (2) gives them lower software margins, but they get higher volume sales per disc and will likely delay, to some degree, delay the market shift to downloads and HD VOD.

So Sony, do you want to make your money right now, or are you willing to accept less revenue per disc in return for a longer product format lifespan with a higher revenue stream for your product?

I see some interesting business modeling in Sony's future.
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