DVD’s Assassination is BluRay’s Only Hope

Two weeks ago, I wrote that BluRay was doomed to take LaserDisc’s place as a movie-and-gadget-geek-only format.

The article was based on the assumption that the studios would cling to DVD sales as hard as they clung to VHS (which they are finally letting die – a decade after DVD’s launch).

However… what if they decided to knife DVD, leaving BluRay as your only choice? Would they do it?

It’s possible. The home video market is very different than it was in the mid-1990s.

Before DVD
DVD was the result of a compromise between a group of consumer electronics makers with a collection of 5″ laser disc technology patents collectively called the “Digital Video Disc” format and a competing group of consumer electronics makers with a collection of 5″ laser disc technology patents collectively called the “Multi-Media Compact Disc” format.

In an effort to avoid battling a format war in the market, they all agreed to use roughly half of each group’s patents and bury the other half. After months of negotiations both sides won some battles, lost some battles, and together they finalized the unified format. They named it “Digital Versatile Disc”.

Like MMCD, and unlike Digital Video Disc, it could be used both in a stand-alone player as a movie-only disc and in a computer as a data disc. Unfortunately, because the initials were the same as one of the old formats, the name confused everyone and flamewars erupted on usenet forums and in Compuserve chat rooms.

To end the bickering the name was changed again; this time to “DVD” (pronounced “DeeVeeDee”), which officially stands for nothing.

DVD Launches
The consumer electronics makers (united under a single format) were behind DVD, but the content providers weren’t so assured.

There was no way to know if customers were going to buy players, or this format was going to be another VCD or CD-i. The DVD disc pressing plants were just built/retooled (at a great cost) and no disc had broken the half-million mark, yet. Investment was a great risk, and only two studios had titles available at launch.

DiVX
Circuit City tried to splinter the format with it’s DiVX pay-per-view discs. Launching it’s scheme at the same time as DVD’s national rollout, they marketed it as a “feature of DVD” and told customers that “all the new models will have it”. Although CC tried their hardest, the format got the fate it deserved (It died and had a codec named after it.*) but not before creating customer confusion and stirring up technophobia.

The VHS Cash Cow vs LaserDisc II
While DVD was fighting the format war it hoped to avoid, cheap VHS tapes sold everywhere from gas stations to Wal-Mart and $100 priced-to-rent tapes sold like hotcakes to Blockbuster Video stores across the country.

The fact that a VHS tape cost more to produce and cost more to ship than a DVD was negated by the huge difference in the volume of sales.

Switching to DVD from VHS had other costs, too. Everything has to be re-mastered. Everybody expects extras. DVD Menu designers aren’t free. Music rights must be re-negotiated. SAG and the DGA expect to be paid, but the format isn’t mentioned in anybody’s contracts – so we need everyone to sign off, etc. etc.

…just more and more reasons to keep milking VHS.

New Format on the Block: Then vs Now
In 1998, the only way to get a movie on your TV at 480i with multi-channel sound was to have it encoded onto a plastic disc.

DVD, at 5″, was easer to handle than the 12″ Laserdiscs and on most movies you didn’t have to flip the disc.

Both plastic discs required mail-order or a trip to the store before you could start watching a movie. You gave the same effort for each and every movie, whether it was an old favorite or a just-watch-once guilty pleasure.

In 2008, to get a get a movie on your TV at 720p or 1080i/p with multi-channel sound, you can have it on a plastic disc or on your hard drive.
You can download it, stream it, mail-order it, or buy/rent it at the store.

Your opinion of each particular movie will greatly effect:
a) how much effort you’re willing to put into getting it
b) how long you’re willing to wait to begin watching
b) how much you care about technical specs
c) how many dollars you’re willing to spend on buying or renting it.
d) whether its a purchase or a rental.

Which format you watch your movie on will be decided be on a case-by-case basis.

It’s no longer one physical format vs another physical format in a winner-take-all battle. It’s a physical format and two internet-based delivery methods splitting the market into three pieces.

While internet-based delivery will be divided between downloads and streaming, there isn’t enough room in the market for two mainstream physical formats. Unless the industry collectively gets together and kills DVD, familiarity, ubiquity, and the “good enough” resolution from upscaling DVD Players will keep DVD the last word in Physical Formats for Movies just like familiarity, ubiquity, and the “good enough” sound resolution from oversampling CD Players kept DVD-Audio and SACD from unseating the Compact Disc as the mainstream’s choice in Physical Formats for Music.

Physical formats will never go away, but I don’t think BluRay has enough momentum to be The Big Kahuna.

2009: Paranoid Studios, DRM, and a Tanked Economy
So, the reasons to keep a legacy format around are obvious, but are there reasons to kill one? Yes, but they aren’t very obvious to the casual observer.

1. BluRay, as a collection of 5″ laser disc technology patents, is owned by fewer companies than DVD. Yes all the major studios have titles in both formats, but fewer consumer electronics makers hold patents in the collection of 5″ laser disc technology patents that make up the format, so each maker gets a bigger piece of the pie.

2. BluRay discs have a higher profit margin, so it’s a bigger pie.

3. DVD disc sales cannibalize BluRay disc sales.

4. DRM, which is fancy corporate-speak for Copy Protection. BluRay has more of it than DVD, and BluRay players get updates… allowing for additional control. Studios like control.

5. Studios can negotiate different terms for “HD” distribution as they have with “SD”, therefore have an opprotunity to squeeze a lot of smaller filmmakers for their pennies.

6. The economy is in the toilet. It is more cost effective to have a streamlined catalog.

7. Uh… Blue is pretty (and other “because we feel like it” reasons).

That’s all I can think of. I’m out.

Will they do it?
There are reasons to keep DVD around until it dies of natural causes (like VHS) and there are reasons to knife it early (like propping up BluRay). Which will they do?

Only time will tell.

*The fact that the codec was originally made out of a hacked version of VC-1 in an abandon-ware a/v container and used mainly to steal DVD content is mildly amusing.

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