How is HD DVD Doing?

Okay, the best buy in high-definition DVD players has been released: the Sony PlayStation 3 that includes a BluRay DVD player. Sadly, a severely limited product supply meant that they sold out in hours (often to speculators hoping to finance their holiday gift giving). So with PS3 models reselling for $700 or more, the HD DVD models remain a better bargain, with some selling for as little as $300.

Is that going to be low enough to attract US consumers? I doubt it. It’s not because HD movies don’t look better than regular DVDs — they d0 — but it’s that they don’t look that much better. To make matters worse, the high-def titles continue to slowly dribble out from the publishers. For example, a recent press release from Warner Home Video made a big deal about the release of three new high-def titles. Never mind that they won’t be released until mid-January. And what are the titles? GoodFellas, Poisedon, and Scooby Doo: the Movie. I can’t say that any of them make me want to rush right out and spend an extra $300 to $500 in order to watch them.

I believe that the high cost of playback for HD movies leaves the door open for Internet delivery of movie content. With more and more homes enjoying broadband connections, I believe that there is a strong opportunity for a service that delivers HD movies to the equivalent of a settop box or video recorder. If customers are willing to wait for NetFlix to deliver a DVD in a day or two, they certainly would be willing to wait overnight for an HD movie to appear in their playback device. Unless high-def DVD costs can be brought down rapidly, these silver discs may soon follow the video cassette into obscurity.