Sony’s UMD movie format is a failure
According to a report in Next Generation, Wal-Mart will soon stop selling UMD movies and most of Hollywood is also backing out of Sony’s portable movie format. Why? Sales of UMD movies have died completely. None of the UMD movies are making any money. Chalk this one up as another Sony format failure.
How exactly did this happen? I think the biggest reason is that people buy a portable game system to play games and not to watch movies. People buy an iPod to watch movies and listen to music. Why Sony thinks that people will buy the PSP to watch movies first and play games second is beyond me. However, I think it’s a much deeper issue than what people use the device for. Right now the PSP doesn’t have enough really good games to steal the thunder that Nintendo’s DS created, so nobody really seems to care much about the PSP.
Even if people stopped caring about the PSP that doesn’t explain why UMD sales were solid to start and they completely died does it? After all, aren’t there millions of PSP’s out there? Well, there are millions of PSP’s out there, but the UMD format has one major problem that it won’t overcome: PRICE. Right now a UMD at Wal-Mart costs somewhere between $15-20. That is not just for new releases, that’s for any movie. Period. At the same time DVD new releases can usually be had for $15. Slightly older DVD’s can be had for $10. Bargain bin DVD’s can be had for $5-7.
People don’t want to spend $20 on a UMD that can only be played on the PSP when they can buy a DVD that can be played on a computer, dvd player, xbox, ps2, etc… for half the price. It’s simply a matter of price. DVD’s only reached massive popularity when the prices for new releases came below $20 and a large selection of quality movies were available for $10. The UMD format does not have the 6,000 or whatever the number of movies the DVD format has, so trying to sell 100 or so different movies for twice the DVD price in many cases, just doesn’t work.
I think the bigger implications of this UMD format failure is that this doesn’t paint a pretty picture for Blu-ray DVD’s as Sony rolls them out later this year. Sure, they are going to be playable in every PS3 sold(which is a big advantage), but they aren’t going to be cheap like DVD’s are. In fact, they are going to be much more expensive. HD-DVD, Blu-ray’s slightly cheaper competitor, is pricing in the $30 range for each HD-DVD movie. I’m sure Blu-ray movies will start in the $30 range as well. In a year or two Blu-ray movies might be had for as little as $20, but don’t count on it. Sony and other movie studios are going to protect their margins on the next-gen movie format. DVD’s have started to get “too cheap” and so new release prices are going back up now. It wasn’t long ago that new releases could easily be had for $15. Now they are at $15 for a week and they go back to $20 and stay there for a while.
Consumers don’t want to pay twice as much for their movies. a $15 DVD shouldn’t cost $30 as a Blu-ray or HD-DVD. As much talk as there is about next-gen DVD standards it’s going to come down to price. We now live in a Wal-Mart World and Wal-Mart shoppers are cheap. Cheap games sell well, cheap movies sell well, but expensive technology just plain doesn’t. Even if next-gen formats get the copy protection right, which it sounds like they might not completely screw up(for the first year or so) they have to battle the DVD format on price. That’s one battle that neither HD-DVD or Blu-ray can win.
