Blu-Ray (And Red Laser DVD, Too) Optical Disc Distribution: More Nails In The Coffin

If I were an executive at Blu-ray torch bearer Sony, or at Wal-Mart, I bet I’d be wishing this week of lousy news was already over. As first reported Wednesday evening at Gizmodo (followed shortly thereafter by commentary from its esteemed competitor, Engadget, and here’s more from VentureBeat), dedicated Blu-ray player (i.e. not including Sony’s PlayStation 3) sales fell 40% from January to February, and only grew 2% from February to March.

But wait…wasn’t the end of the blue laser format war supposed to turbo-charge Blu-ray sales? Granted, vendors’ decisions to increase Blu-ray player prices in response to the cessation of HD DVD competition didn’t help matters. But, particularly in the context of the looming recession (or whatever you’d prefer to call the economic malaise we’re currently mired in), and as I’ve long vehemently argued, upscaled (for less than $50 retail at the player level) red-laser DVD content (that they already own) is perfectly adequate for most folks…

…Especially when physical discs are increasingly no longer the only way that consumers can easily obtain their upscaled standard-definition content. Thereby leading to the second ‘nail’ I’d like to highlight on this Friday morn. Any delusion that the movie studios were loyally wedded to their retail channel distribution partners was dashed yesterday when Apple announced that nine major studios were completely eliminating the historical delay between when movies were available for sale on DVD and subsequently offered for sale on the iTunes store.

Granted, I don’t know the terms of the contracts Apple secured, but at face value (DRM-locked) digital distribution seems to have a lot of merits for the studios. They don’t need to press and distribute discs, nor do they need to hassle with returns once a film fades from fashion prominence. They don’t even need to directly support a server farm; Apple does that heavy lifting for them. I’m not sure when the same terms will be offered to other services, like Amazon Unbox, CinemaNow, Movielink, and the Xbox Marketplace, but I’m confident that the correct word to use is ‘when’, not ‘if’. To that point, and reflective (IMHO) of the studios’ desires to not give Apple too much power, I couldn’t help but notice that Juno was available for purchase through Amazon Unbox before the iTunes Store carried it.

Granted, Blockbuster and Netflix aren’t yet substantially impacted by yesterday’s news, since both companies earn most of their income from movie rentals (whose delay-from-DVD latency hasn’t yet been collapsed), but I daresay it’s only a matter of time. So, lessee. At $4.09 per gallon for gas, I could drive 60 miles roundtrip to Reno to buy a disc. Or I could drive 15 miles roundtrip to the local video rental store…and hope the movie I want to view is available once I get there. Or I could press ‘purchase’ and, in less than 2 minutes, be happily enjoying my flick. Hmmm….