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Spicy Ideas: Why Online Video Will Crush Blu-ray

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It’s hard out here for a geek. No matter how successful you become, you will always be Level 1 tech support for your family and friends. In the last 2 weeks, I have helped a friend set up his HDTV, diagnosed a DVD player issue for a neighbor, and walked my dad through connecting his laptop to the 1080p monster hanging on his wall. In the process of running cables; lifting heavy, expensive things; and dripping sweat onto owner’s manuals, I noticed something: There was no second, smaller Blu-ray-player-shaped box next to the wall of cardboard that formerly protected a 48'' plasma screen. In fact, there is only one Blu-ray player on my block (and I hesitate to count it because it’s a Sony Playstation 3).

So why are most of my friends and family who own HDTVs not purchasing Blu-ray players? They fit the upper-middle class, HDTV-owning, entertainment-watching, gift-giving demographic. Yet they have resisted purchasing the Holy Grail of movie-viewing devices, and I expect this trend to continue. Here are four reasons why I think online video will crush Blu-ray this year.

Screen Shift
Remember when the resolution on your TV was better than any other device in the house? Those days are gone, and comScore reports that 77% of internet users are watching video online. Whether you’re watching silly cat videos on YouTube, live events on Ustream.TV, your favorite TV show on Hulu, or the latest film blockbuster from iTunes, chances are if you want to watch it, it’s available on your computer. The other screen that more people are using to watch video is on their mobile devices. Time spent watching movies on your iPhone, portable media player, or netbook is time away from your Blu-ray player.

Connected Devices and Services
I can now watch HD content on my TV using Playstation 3, Xbox 360, VUDU, Roku Netflix, TiVo, Apple TV, boxee, on-demand services from cable and satellite, etc. There are far more competitors to Blu-ray than DVD ever had, and the list grows daily. Whether you’re using gaming devices, digital recorders, or set-top boxes, all the devices connected to your HDTV are figuring out how to supply HD content instantly and easily. Even Blu-ray players can connect to the internet with BDLive, and that begs the question: Why would I buy a Blu-ray Disc when I can just download/rent/access what I want instantly? The other nail in the coffin was hammered at the 2009 Consumer Electronics Show. We now have HDTVs that are hooked directly to the internet and can access HD content without an additional box. Scared yet?

It took 3 years for the DVD player to go from $1,000 to $100; Blu-ray players have dropped below $200 in less than a year. The history of media is not stacked in the favor of Blu-ray. The half-life cycle from film to VHS/beta to DVD to HD-DVD to Blu-ray is shortening rapidly. The fight between HD-DVD and Blu-ray scared off adopters and may have pushed online technology to pick up the slack. The Consumer Electronics Association predicts that consumers will buy more DVD players than Blu-ray players in 2009. Sorry to say it, but either some new media will come along to compete with Blu-ray or online video will be widely adopted within the year.

But what about the Blu-ray in all of its 1920x1080-pixel resolution glory and its sweet picture at up to 60 fps interlaced or 24 fps progressive? Can online video offer up HD quality?¬†YouTube, blip.tv, Facebook, Vimeo, Motionbox, Hulu, and a host of others all offer HD content, and it looks fantastic. Most of it is still 480p and 720p, but I don’t mind sacrificing a little quality when I’m on my laptop watching The Pink Panther over a wireless connection.

Final Thought
I did an informal survey with some of my hard-core geek friends. Several of them owned Blu-ray players, but they only viewed them on special movie nights. The bulk of my early adopter friends watched online video primarily and in smaller, bite-sized chunks. HD is online and the trends all point to wide adoption.

I love new technology, and Blu-ray looks fantastic. But I don’t have high hopes for its future. There are too many competitors, it doesn’t have time on its side, and I don’t even own one. Piracy concerns, user- generated video, and economic issues facing the entertainment industry make the tunnel seem even darker for Blu-ray.

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