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Old 09-27-2007   #1
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Default HD Video Game Sales Boom Despite $50 Plus Prices

First it was EA Sport’s Madden 08 Football selling 1,800,000 copies in its first week late this summer. This week the shoot-em-up game Halo 3 from Microsoft has hit the streets with an astonishing $170,000,000 in sales in its first day. Both titles are priced in the $50 to $60 range – many times above the price points for CDs, DVDs, HD DVDs or Blu-ray titles - yet consumers ranging from Generation Xers to much younger Generation Y gamers are willing to part with double or triple the price of a CD, DVD, HD DVD or Blu-ray disc to get the latest version of their favorite software title to the delight of the multi-platform video game industry.

A similar success was had with the SACD re-release of Pink Floyd’s Dark Side of the Moon compete with CD backwards compatibility and SACD 5.1 surround sound. Over 1,000,000 copies of this high-resolution title were sold yet the label never followed up with other Pink Floyd or comparable titles in a similar value package leaving early adopters and Floyd fans to wonder if they should ever adopt a new technology like SACD ever again. Many of these shaken and stirred technological end users are the same ones sitting on the sidelines as Blu-ray and HD DVD slug it out in a format war that is reminiscent of the audio-only SACD versus DVD-Audio format war from a few years ago.

The concept of reselling classic and or popular titles is the basis of the business model of companies like EA and Microsoft yet for some reason the music industry seems addicted to losing money and wooed by the lure of the easy song-by-the-download business model. In the past 15 years and despite finding $3,000,000,000 in new sales a year from legitimate music downloads – the record business has lost over $20,000,000,000 in domestic yearly sales. And the drop in sales is not solely because of Napster or illegal downloads, as the executives responsible for this horrendous performance will tell you. The main reason for the drop in sales is today’s music with very few exceptions artistically is substandard compared to the movies and video games consumers can buy for comparable sums of money. At the same time a gold mine of amazingly profitable and artistically important music from the four major record label’s back catalog is languishing. The best the majors can come up with is selling a low-resolution download to your computer or iPod or in a 25 year old CD format that just doesn’t inspire younger buyers the way HD titles from the likes of EA, Microsoft and other developers do.

The solution for the music business is so incredibly simple it is amazing and it would result in a boom in both music sales as well as profitable electronics sales as well. If consumers are willing to part with $50 for a great offering – why wouldn’t they also invest in music if the value proposition at say $20 was strong. On a DVD-Video disc you can put a DTS or Dolby soundtrack for 5.1 surround, a 24 bit stereo mix and even have room left over for video supplemental. For a label to invest $100,000 in a group of it’s a-list titles to reissue them in surround or even high resolution audio is the kind of investment artists should expect. The truth is – the major labels want smaller labels to pay them huge upfront retainers for the rights to sell the music the majors should be selling in high resolution in the first place. Labels then complain that they couldn’t possibly release high resolution and surround sound discs on a DVD to the hundreds of millions of users out there for fear of piracy. In that instance you might look to Blu-ray and or HD DVD as encrypted, one-cable solutions that offer up to 50 GB of storage, HD video capability and audio formats at the cutting edge of sound. Imagine a Jimi Hendrix album remastered for 5.1 surround and in 24 bit stereo for the purists along with upconverted interviews in HD video and concert clips. Then imagine another reissue with a new surround sound remix and more supplementals that would inspire ever audio buyer and Hendrix fans to buy the title all over again – just as they proved they would with Dark Side of the Moon and the same way the kids do today with HD video games despite their $50 disc prices.

by: Jerry Del Colliano
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