More after the jump.
Gregory Solman brings us another piece on the HD vs. Blu-ray fight, from a marketing perspective.
The marketing battle is shifting business alliances and influencing the advertising of consumer electronics and the movie releases that drive their sales in both formats.
The Blu-ray Disc Association (BDA) trade group is backed by Hitachi, LG Electronics, Matsushita Electric (Panasonic), Pioneer, Philips, Samsung, Sharp, Sony, and Thomson. Remember that Sony, which lost the VCR wars, now owns or has ties to studios Columbia, Tri-Star, MGM, and UA, owns half of Sony BMG Music, and has the PlayStation line of game consoles. The Microsoft Xbox 360 consoles use HD.
Recently, the emphasis on HD versions of movies transitioned from a now obligatory tag about the format to the creative theme itself. According to a studio source, Walt Disney Studios Home Entertainment’s marketing already reflects that shift. Upcoming Blu-ray DVD releases from the studio, including Lost, High School Musical and Pirates of the Caribbean: At World’s End, which came out last week, are now tagged with Blu-ray promotion across all mass media. And giant titles such as Pirates are earning separate 60-second spots for broadcast on HD Net with half the message devoted to the special Blu-ray features.
MovieBeam, which Disney sold less than a year ago to Hollywood Video owner Movie Gallery, is shutting down December 15, according to this piece in BetaNews by Nate Mook.
Movie Gallery spent less than $10 million buying MovieBeam, a fraction of the $50 million it was recapitalized with last year after Disney spent a reported $70 million on the project. But this service has failed to achieve any critical mass, largely due to its high cost and unique delivery method that limited its ability to expand.
MovieBeam receives the content over the air with an antenna connected to a set-top box. A phone line is also required for billing and ordering purposes. Customers have to shell out $250 for the set-top box (although pricing has dropped to $100 with promotions) and pay a $30 activation fee. Pricing for movies ranges from $3.99 to $1.99 USD, with a $1 surcharge for high-definition content.
The competition has been formidable.
Along with previous rival CinemaNow, the service was also facing new competition from iTunes and Apple TV, Amazon Unbox, NetFlix and now Vudu.
It’s not clear whether Movie Gallery will continue its endeavors in the online movie rental space, but it would not be surprising. Brick-and-mortar rental businesses like Blockbuster and Hollywood Video are seeing subscriber losses due to online upstarts like NetFlix.
This is all part of the natural progression of business these days. I remember when there were mom-and-pop video stores on every corner, and they had VHS and Betamax offerings, most priced close to $100 per movie because studios were so afraid that some viewing would kill the box office. Then national chain stores dedicated to video sales and rentals, and general retailers like Target and Wal-Mart, and online sales on Amazon and others made the mom-and-pop stores mostly obsolete and DVD has replaced VHS. While the Blu-ray/HD fight continues, video-on-demand and download services are putting the squeeze on the brick-and-mortar stores – and each other. Likely, a handful of on-demand and download services will remain in the long run, backed by significant marketing and financing.