New Blu-ray format ‘in a death spiral’

VHS reigned for 30 years, but Blu-ray is faltering after eight months


When the clunky VHS video format officially gave up the ghost a few years back, it had survived to the ripe old age of 30. But barely eight months after Sony’s Blu-ray technology emerged as the king of high-definition video, observers are already asking whether its days are numbered.

Retailers in the U.S. are slashing prices on Blu-ray players, from US$400 earlier this year to US$230 (they now sell for $270 in Canada) in a bid to boost Christmas sales. Yet analysts say even that may not be enough. Last week, Robin Harris, a blogger for tech website ZDNet, wrote that “Blu-ray is in a death spiral.”

Part of the problem is the drawn-out war that took place between Blu-ray and rival format HD DVD over which would become the industry standard. HD DVD waved the white flag in February. But while the two technologies battled it out, DVD prices fell and new technologies such as video-on-demand and Internet video streaming gained a foothold. “If you can get movies over the wire on demand and have an entire library at your disposal on the screen à la Netflix, that’s the way you’re going to go,” Roger Kay, president of Endpoint Technologies Associates, noted last week in newspaper reports. What’s more, critics say the improved picture quality isn’t enough to warrant the higher price for Blu-ray discs—$30 versus $15 for regular DVDs. Kay predicted there will be a “dramatic” drop in Blu-ray sales starting this quarter.

The Blu-ray Disc Association has tried to counter the grim outlook by pointing out that the Blu-ray version of the hit movie Iron Man sold more than 500,000 copies in its first week, topping all other Blu-ray titles this year. But during the same period, consumers also snapped up 7.2 million copies of the regular DVD version.

Now, as the economy tanks, some wonder if consumers will just stick with their old DVDs. As Apple’s Steve Jobs put it in mid-October, Blu-ray is now in a “bag of hurt.”

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