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http://www.investors.com/editorial/tech.asp?v=8/2

High Def Brings High Sales Hopes

BY BRIAN DEAGON

INVESTOR'S BUSINESS DAILY

Hollywood studios, electronics retailers and consumer electronics
makers have a potential gold mine waiting for them when a new
generation of DVD players starts to arrive late this year.

Total U.S. sales of standard DVD players have approached $15 billion,
says the Consumer Electronics Association. Many predict even higher
sales of the new high-definition DVD players. And Hollywood is looking
at a market that should surpass $10 billion a year in high-def DVD
movie sales.

DVD players, introduced in 1997, are the fastest-growing consumer
electronics product ever. The CEA says more than three of every four
U.S. homes already own a DVD player. A shift to new high-def DVD
players should go along with the move to high-definition TV and
surround-sound systems to provide the best video experience in the
home ever.

"The arrival of DVD players created a phenomenally successful business
model, especially for the software (DVD movies and extra features),"
said Mark Knox, a consultant for Toshiba on DVD technology. "Hollywood
makes more money from home video sales than at the box office."

Going To Next Level

The shift to higher-quality home theater systems could boost the
fortunes of consumer electronics retailers such as Best Buy (BBY) for
years — and things already were looking up. In 2003 and '04, the
industry recorded consecutive years of double-digit growth for the
first time in a decade. The shift to digital video is the reason, says
the CEA.

"When consumers first started buying high-definition TV sets, they did
so to enjoy the benefits the DVD brought," said Sean Wargo, an analyst
for the Consumer Electronics Association. "Now it's going to the next
level."

Meanwhile, DVD sales have rescued Hollywood from a box-office slump.
Consumers who bought a movie on VHS and later on DVD are expected to
buy the movie for the third time, this time in the new high-def
format.

"We'll have the capacity to exploit our new releases and to take a
look at our movie catalog," said Marsha King, general manager of
Warner Home Video.

When the new high-def DVD players start arriving, Warner will release
about 50 movie titles in high def. Walt Disney, 20th Century Fox, MGM,
Paramount and Universal are gearing up as well.

U.S. consumers spent $15.5 billion buying DVDs last year and another
$5.7 billion renting them, vs. $10 billion in U.S. movie ticket sales.

Toshiba is likely to be the first maker to introduce high-def DVD
players. The company says the new format will double picture
resolution for users with high-def TV sets. The better video quality
could prod users to improve audio with surround-sound setups.

"History shows that a new medium expands the market," said Jim Barry,
a spokesman for the Consumer Electronics Association.

Digital high def has helped turn a commodity product, the TV set, back
into a status symbol. New technologies like LCD and plasma have let TV
screens expand to 62 inches, twice the size of ones based on old
cathode ray tube technology.

U.S. consumers spent about $40 billion last year for TV entertainment,
including cable and satellite pay-TV services and DVD. They spent $24
billion in 1996, the year before the introduction of DVDs. Some $9
billion of that $16 billion jump came through DVD sales, says Steve
Nickerson, senior vice president of market management at Warner Home
Video.

Analysts don't know when the new DVD revenue will flow. The first
systems, likely available in time for Christmas, will cost $1,000 or
more at first. Sales of today's DVD players didn't take off until
prices fell below $300.

Merger Talks Failed

There's another tough issue facing the field: a standards war. Two
competing high-def DVD systems will be brought to market — and they're
not compatible. That's forcing people to choose sides or, as the
Hollywood studios do, double up on their output. One technology,
backed by a Toshiba-led group, is pushing HD DVD. The other camp, led
by Sony, (SNE) is pushing Blu-ray.

The two sides have talked about merging their formats, but to no
avail. "The possibility of a tech merger is not dead, but it's more
difficult now than it was even a few months ago," said Nickerson.

Blu-ray's development is three to six months behind HD DVD. Besides
Sony, Blu-ray backers include Dell, (DELL) Hewlett-Packard, (HPQ)
Apple Computer (AAPL) and Hitachi. (HIT)

Besides Toshiba, HD DVD backers include NEC, (NIPNY) Sanyo Electric
and Thomson. (TMS)

"Consumers will decide by voting with their wallets," said Andy
Parsons, a senior vice president at Matsushita's (MC) Pioneer
Electronics, which backs Blu-ray.

HD-DVD discs can hold 45 gigabytes of data, while Blu-ray can hold 50
gigabytes. Current discs hold 5 gigabytes.

The larger size opens the door for new marketing possibilities. A
movie disc could provide audio in multiple languages. A single disc
could contain every episode of a full season of TV dramas. And no more
need for two-disc sets — one for the movie and another for features.

Analysts see the standards war ending in a year or two, as the DVD
market enters its new phase.






"Arguing with anonymous strangers on the Internet is a sucker's game
because they almost always turn out to be -- or to be indistinguishable from
-- self-righteous sixteen-year-olds possessing infinite amounts of free time."
- Neil Stephenson, _Cryptonomicon_

"Allan" < t> wrote in
message news:...
> http://www.investors.com/editorial/tech.asp?v=8/2
>
> High Def Brings High Sales Hopes
>
> BY BRIAN DEAGON

> Consumers who bought a movie on VHS and later on DVD are expected to
> buy the movie for the third time, this time in the new high-def
> format.

Dream on! How does it feel to "expect" ? Today's DVDs are good enough.

--
Mac Breck (KoshN)
-------------------------------
"Babylon 5: Crusade" (1999)
Galen: "There is always hope, only because it's the one thing that no
one has figured out how to kill yet."
(Galen's obviously never met Warner Brothers, TNT-Atlanta or Sci-Fi.)

"Brimstone" (199
[Stone lights a candle for the dead in a Catholic church]
Gina: Who's that for?
Ezekiel Stone: Me.

Allan wrote:
> http://www.investors.com/editorial/tech.asp?v=8/2
>
> High Def Brings High Sales Hopes
>
> BY BRIAN DEAGON
>
> INVESTOR'S BUSINESS DAILY

[...]

> "History shows that a new medium expands the market," said Jim Barry,
> a spokesman for the Consumer Electronics Association.

Apparently he skipped a lot of "history" in school.



John

--


Von Herzen, moge es wieder zu Herzen gehen. --Beethoven

I can only speak for myself, but I hardly ever bought movies on VHS, I
bought plenty on DVD and when the high def stuff starts rolling in I'll
likely buy new releases in the high def format but I doubt I'll replace
any of the DVDs I currently own unless the high def editions are a
better package (i.e. my featureless Blade Runner disc.)

- Jordan

Mac Breck wrote:
> "Allan" < t> wrote in
> message news:...
> > http://www.investors.com/editorial/tech.asp?v=8/2
> >
> > High Def Brings High Sales Hopes
> >
> > BY BRIAN DEAGON
>
> > Consumers who bought a movie on VHS and later on DVD are expected to
> > buy the movie for the third time, this time in the new high-def
> > format.
>
> Dream on! How does it feel to "expect" ? Today's DVDs are good enough.
>

the studios might be in for a bit of a rude awakening. They are likely
going to expect the HDDVD/BluRay disc sales to be substantial but
likely early on, it'll be much less than they expect (or fear in worst
case scenario).

And I'm ALREADY sick of double-dipping and so i'm not much of a mind to
be TRIPLE/QUADRUPLE dipped. Price point of the new discs are a key
point, also. <$20 to make me buy.

I DO want a new format. I have a 720p tv and would upgrade in a few
years to a 1080p tv, but only when there's a single unified format.

I'm a definite early adopter, but as of right now, I'm taking a
wait-and-see approach.

-goro-

Allan wrote on [Tue, 02 Aug 2005 11:37:53 -0400]:
> http://www.investors.com/editorial/tech.asp?v=8/2
>
> High Def Brings High Sales Hopes
>
> BY BRIAN DEAGON
>
> INVESTOR'S BUSINESS DAILY
> Meanwhile, DVD sales have rescued Hollywood from a box-office slump.
> Consumers who bought a movie on VHS and later on DVD are expected to
> buy the movie for the third time, this time in the new high-def
> format.

That's funny, the first 3 DVDs I bought for 33c each from the 800.com
sale put my DVD collection ahead of my VHS collection.

> U.S. consumers spent about $40 billion last year for TV entertainment,
> including cable and satellite pay-TV services and DVD. They spent $24
> billion in 1996, the year before the introduction of DVDs. Some $9
> billion of that $16 billion jump came through DVD sales, says Steve
> Nickerson, senior vice president of market management at Warner Home
> Video.

How much has your cable bill gone up since 1996? I know mine has gone up
substantially.

> Analysts don't know when the new DVD revenue will flow. The first
> systems, likely available in time for Christmas, will cost $1,000 or
> more at first. Sales of today's DVD players didn't take off until
> prices fell below $300.

And items were released on DVD and rental VHS only... and there were all
sorts of incentive sales. $10 Tuesdays at CompUSA, online coupons
definitely drove my purchases early on.

"Goro" <> wrote in message
news: oups.com...
>
> Mac Breck wrote:
>> "Allan" < t> wrote in
>> message news:...
>> > http://www.investors.com/editorial/tech.asp?v=8/2
>> >
>> > High Def Brings High Sales Hopes
>> >
>> > BY BRIAN DEAGON
>>
>> > Consumers who bought a movie on VHS and later on DVD are expected to
>> > buy the movie for the third time, this time in the new high-def
>> > format.
>>
>> Dream on! How does it feel to "expect" ? Today's DVDs are good enough.
>>
>
> the studios might be in for a bit of a rude awakening. They are likely
> going to expect the HDDVD/BluRay disc sales to be substantial but
> likely early on, it'll be much less than they expect (or fear in worst
> case scenario).
>
> And I'm ALREADY sick of double-dipping and so i'm not much of a mind to
> be TRIPLE/QUADRUPLE dipped. Price point of the new discs are a key
> point, also. <$20 to make me buy.

Current projections are ca. $40 for HD DVD and perhaps $50 for Blu Ray when
first introduced, retail. That is likely to fall as the production plants
ramp up.

On Tue, 2 Aug 2005 13:52:18 -0700, "Alpha" <> wrote:

>> And I'm ALREADY sick of double-dipping and so i'm not much of a mind to
>> be TRIPLE/QUADRUPLE dipped. Price point of the new discs are a key
>> point, also. <$20 to make me buy.
>
>Current projections are ca. $40 for HD DVD and perhaps $50 for Blu Ray when
>first introduced, retail. That is likely to fall as the production plants
>ramp up.

$40?

Alpha making up facts again...

http://money.cnn.com/2005/01/26/tech...ch/dvd_format/

"Peter Chernin, president of News Corp. (Research) and its Fox
Entertainment unit, estimated recently that high-definition DVDs will
sell for about $20 to $25 apiece, compared to around $15 for today's
DVDs."








"Arguing with anonymous strangers on the Internet is a sucker's game
because they almost always turn out to be -- or to be indistinguishable from
-- self-righteous sixteen-year-olds possessing infinite amounts of free time."
- Neil Stephenson, _Cryptonomicon_

On 8/2/2005 1:52:18 PM, Alpha wrote:

> Current projections are ca. $40 for HD DVD and perhaps $50 for Blu Ray
> when first introduced, retail. That is likely to fall as the
> production plants ramp up.

Whose projections? It's already been announced that they'll be
substantially lower than that.
--
"If you don't like your job you don't strike, you just go in every day
and do it really half-assed -- that's the American way."

Now playing: the radio.

I'll look try to look it up. The article I read stated HD DVD about 20%
higher than retail and Blu Ray about 50% higher.

"Tarkus" <> wrote in message
news:...
> On 8/2/2005 1:52:18 PM, Alpha wrote:
>
>> Current projections are ca. $40 for HD DVD and perhaps $50 for Blu Ray
>> when first introduced, retail. That is likely to fall as the
>> production plants ramp up.
>
> Whose projections? It's already been announced that they'll be
> substantially lower than that.
> --
> "If you don't like your job you don't strike, you just go in every day
> and do it really half-assed -- that's the American way."
>
> Now playing: the radio.