HD-DVD and the Early Adopter Premium

Hodejo1 writes "The early adopter premium is the difference between the cost of buying the latest greatest techno-toy today and the cost of buying an equal or better unit a couple of years later for much less. That Blu-ray unit you buy today for $300 will cost $80 two years from now. The premium is the $220 you pay to get the starter Blu-ray unit now as opposed to waiting. The same applied for HD-DVD until the axe finally fell and this is where it gets interesting. MP3 Newswire has been tracking post-mortem HD-DVD sales on eBay and surprisingly found that there are many takers. And why are people flocking to buy this decade's Betamax? Simple, they did the math. The demise of HD-DVD format creates "an option where the consumer can get his high-def player NOW without paying the $220 early adopter premium. That savings pays for the player and more. New sealed boxes of the Toshiba HD-A3, which shipped last fall for $300, are now drawing on average about $75 on eBay, where plummeting HD-DVD movie prices are averaging between $6 and $10. "Take a consumer with a 42" plasma set who needs to replace a broken standard definition DVD player. He can a) replace it with another standard definition DVD for about $60. b) He can buy a Blu-Ray player for between $300-$1000. c) He can buy an HD-DVD unit for under $80 and then buy ten $10 or sixteen $6 HD-DVD videos for a total of $180". What really drives this is Blu-ray's skimpy catalog, which will take a couple of years to pump up. Rather than blow the $220 on the early adopter premium just to have access to a limited number of movies the post mortem HD-DVD buyers can enjoy cheap Hi-Def players, cheap Hi-Def videos, and pay less. These users can shift to Blu-ray when players are less expensive and the catalog is robust. Actually, the early adopter premium is more like $320. With the win, Blu-ray manufacturers have raised prices."

Comments

you missed the most important factor.

[kesuki]

aacs has been cracked, while BD+ hasn't so everything on 'hd-dvd' can be backed up to a computer, then sold on e-bay or whatever. you can even burn the backed up hd-dvd to a bd-r, if you're willing to pay $600 for a bd-writer...

Re:you missed the most important factor.

[Zocalo]

I'm pretty sure that can't be right. I could perhaps understand the control freaks at Sony trying to pull a stunt like that, but requiring AACS is going to have a big impact on another emerging market Sony has a huge stake in; HD camcorders. Currently, the only way of efficiently distributing sizeable hi-res content from such a camcorder to friends and family (assuming they have HDTV capability in the first place) is via a physical HD disc, which essentially now means Blu-Ray. Hitachi even has a HD camcorder available that records straight to an 8cm Blu-Ray disc, which is then supposed to be immediately playable in any Blu-Ray player. Unless both the Hitachi camcorder and end-user AV software is also doing AACS encoding before writing content to disc, then that's going to leave a lot of HD camcorder owners just a little peeved when they try and show of their latest home videos in glorious HD.

Then again, it could actually be a good thing if they don't play on standalone players. It was bad enough having to sit through $random_family_member's holiday snaps, things took a turn for the worse with the first analogue camcorders, but the thought of seeing all that in HD? Won't somebody please think of the children!

boy is this getting old...

[YesIAmAScript]

Article says BluRay manufacturers have raised prices. This is not true. The link tracks average sale price, no manufacturer's recommended price.

Yes, average sale price has gone up after Christmas sales ended.

Also, if BluRay's catalog is skimpy, what does that make the HD-DVD catalog, which is smaller?

It'd be great if the HD-DVD fans took a clue from Toshiba and stopped trying to push a dead format. They're not doing anyone any favors.

Great Player

[n9uxu8]

The Toshibas are excellent upconverting players...I need another dvd for the basement HDTV, so I plan on picking up another rather than shelling out for a standard upconverting player.

Dave

embellishment

[burnin1965]

What really drives this is Blu-ray's skimpy catalog, which will take a couple of years to pump up.

The articles itself was interesting and looks spot on, however this embellished comment on the article is inaccurate. Amazon lists over 500 HD-DVD titles and over 700 Blu-Ray titles. It seems someone is grasping at anything to save face on a lost cause.

With a large volume of HD content available for the dead format and the player/movie prices heavily cut to move inventory it should be no surprise they are selling. Thats the point of the massive price cuts, to clear out the inventory of the dead format.

Is this bad news for Blu-Ray? Hardly, once the inventory for this dead format is depleted it will be a Blu-Ray market until a viable alternative is developed. I doubt we'll get any meaningful agreement between hardware manufacturers, software developers, content producers, and telecom providers that will enable a meaningful replacement for Blu-Ray any time soon.

I'm a chronic early adopter

[elrous0]

I adopted DVD in 1997 (just months after it came out) with a $450 player (at that time, one of the cheapest on the market). I have no regrets. I got a well-built machine that has lasted almost 11 years now (my parents still use it). That premium got me several years headstart over those still wasting $ on VHS tapes and a machine that was very decent and built to last (unlike many of the cheapo DVD players today).

I also bought into HD-DVD (bought the $180 xbox 360 add-on drive when it first came out). That $180 got me the ability to watch movies in high-def, access to HD-DVD discs that were generally much cheaper than their blu-ray counterparts, and access to many great exclusives (like the Battlestar Galactica HD-DVD boxset) not available on blu-ray. And it's not like any of that stuff I've already bought is going to turn into a pumpkin now that HD-DVD is dead. It also gives me access to some great clearance deals on discs now. No regrets

I also bought a blu-ray player (PS3 after the first price drop for $500). Gives me access to blu-ray discs and exclusives, a good gaming system with potential, full hardware backwards compatibility for my PS2/PS1 games (it's the original 60GB American model). And it's easily upgradable. No regrets.

I'm sick of hearing about the "dangers" of early adoption. IMHO, it's almost always worth it (as long as you don't go crazy with the top-of-the line stuff). Early adoption can buy you years of fun ahead of everyone else and rarely becomes truly worthless even if your chosen format "loses."