Trends Report

The Next-Gen DVD Format War: Still Bloody

Blu-ray Must Drop Hardware Prices Quickly To Beat HD-DVD

September 21st, 2007
J. P. Gownder, Vice President, Principal Analyst
J. P. Gownder Vice President, Principal Analyst
With contributors:
James McQuivey, PhD , Bradford J. Holmes , Paul Jackson , Remy Fiorentino , Ellen Daley

Summary

Forrester predicted in 2005 that Blu-ray would eventually win a hard-fought victory over HD-DVD in the next-generation DVD format war. Today, Forrester believes that Blu-ray remains in a better position than HD-DVD — but that Blu-ray strategists need to alter course. Blu-ray's failure to land a knock-out blow means that the format war will continue for at least 18 more months. Blu-ray's content advantages are somewhat diminished since the recent decision by Paramount to commit exclusively to HD-DVD. And HD-DVD hardware prices have dropped directly into consumers' preferred price range, according to Forrester's Technographics® survey data. Weakened by these developments, Blu-ray needs to offer a viable hardware model at the $250 price point by Christmas 2007. The Blu-ray camp must also stave off further studio defections, and employ more aggressive promotional tactics to counter HD-DVD's recent momentum. Failure to alter strategy would open up Blu-ray to a possible upset defeat at the hands of HD-DVD.

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