Should you buy expensive movies? Sometimes renting or streaming video gives you abetter long term bang for your buck.
Yesterday, Toshiba announced they will stop producing the HD-DVD, which puts a definitive end to the questions concerning which high-definition DVD format would dominate the markets. This wasn’t really a surprise to many people, as the Blu-Ray format was backed by most of the major Hollywood movie studios, and several technology giants. Last week, Wal-Mart and several retailers also announced they would only carry Blu-Ray DVD products in the coming months.
What does this mean for consumers? Well, until recently, people had to choose between two competing high-definition DVD formats if they wanted the most up to date technology. The only problem was that for the first few years, no one was sure which format would emerge as the standard. Each side, the Toshiba backed HD-DVD format, and the Sony and Panasonic backed Blu-Ray technology, lined up movie studios, production and manufacturing companies, etc. Both companies poured billions into research, development, and advertising in an effort to make their product the world standard. The winner would stand to earn billions of dollars in the coming years.
Fear of buying an obsolete product. Because consumers didn’t know what the outcome would be, many people were afraid to make the initial investment in the electronic hardware and the DVDs, both of which are considerably more expensive than regular DVDs and DVD players. Now, that the answer for which high-def format will be the standard has been resolved, consumers pretty much have the green light to go out and buy the Blu-Ray format high-def DVD player and DVDs without fear of the technology becoming obsolete right away.
Don’t rush out to buy it just yet. I don’t think it is a good idea to rush out there and immediately buy a Blu-Ray DVD player and a vast library of Blu-Ray DVDs. And if you have a CRT-TV like I do, the difference probably isn’t even noticeable. You will need a large screen, HD-TV to really get the maximum benefit of the high-definition DVD players.
Buying the player right away is not a good move. The demand for Blu-Ray DVD players will increase right now because the format war is officially over. This could keep the prices high for awhile until the demand drops. Don’t be surprised if new manufacturers license this technology and begin producing it in the coming months, which will further depress the prices. As with all technology, the player prices will continue to drop. I think if you wait a few months, the price will be much more affordable than it is now.
The Blu-Ray players are backwards compatible with standard DVDs, so you don’t need to rush out and buy dozens of new movies. If you have a Blu-Ray player, buy the Blu-Ray DVDs as needed.
Early technology adopters pay the highest price. Beyond higher hardware prices for adopting new technology, there are other associated costs such as the accompanying software, DVDs, upgrades, etc. Unless the new technology makes a fundamental change in your life or your work, it is often best to wait until it becomes standardized. Continual improvements and cheaper technology will drive prices down, and eventually you will be able to purchase that new technology at a reasonable price… or decide that you just don’t need it after all.
The final thing to consider is whether or not you even need to buy movies. The idea of buying movies is becoming less popular with the prevalence of companies offering DVD rentals and online streaming, such as Netflix and Blockbuster. The more popular of these companies is Netflix, which offers online movie streaming and video rentals through the mail. Our Netflix review covers their plan offerings and prices. Netflix is very affordable, coming in at less than the cost of a premium movie channel on cable or satellite.
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{ 11 comments… read them below or add one }
Yew! Early adapters get taken for a ride. Ask the people who stood in line for 3 days to get an iPhone. Just a few weeks later: PRICE CUT!
Early adopters are necessary for every new product out there. Someone needs to support innovative companies get some revenue during the initial stages of their new products lifecycle.
Early adopters are people who like spending, that’s their way of “expressing themselves”. They are good for the economy, because early adopters spend a lot, which is good for stocks. Since I am a stockholder in the larget 500 companies in America, I would preferthat more people become early adopters
DGI, Your arguments are well thought out, and I agree with you. If no one bought new technology, it wouldn’t become mainstream and prices wouldn’t drop. Yes, early adopters are 100% necessary. In the case of the iPhone and PS3, many people got them so they could be the first person on the block to have one. The bragging rights alone are often worth the cost to them. But, for most people, it just makes sense (cents) to wait.
I also invest in the S&P 500 and a few other index funds, and I also like people who go out and buy these products and spur the economy along. Heck, the majority of the world could… as long as it put money in my pocket, I wouldn’t mind one bit!
But, I think buying a Blu-Ray at this point only makes sense if you have an HD-TV and were already looking to upgrade your system. It doesn’t make sense to go out and buy it just because the format war is finally over.
Thanks for the great comment.
I’ve never really understood the desire to be the first one to buy new technology. I want the bugs worked out and the price dropped before I buy
I think I will be a very late adopter of Blu-Ray. Our regular DVD’s seem to work just fine and we will keep our CRT-TV as long as we possibly can!
As a counterpoint from a personal finance point of view I have to agree with your original opinion patrick: let other people be the early adopters. When I am sitting in my gold chair rolling a $100 bill cigar then I will be the first to run out and be the first one in line for new technology…
Ryan,
I agree with you about not rushing in to buy blue-ray dvd’s. I like early adopters and the group after them, but I myself am a very very late adopter of technology.
Nice article!
There are the early adopters on the bleeding edge of technology and then there are the second generation adopters. People who buy now are a few years behind the people who paid $3,000 for a blu-ray setup when they first arrived. I think you are nuts to pay 100x more for to get the cutting edge but 2x more is worthwhile for some people. I tend have a gadget problem and so I’m just pleased to hold off on the first wave. By Christmas 2008 I’ll have Blu-Ray and it will be worth it to me.
Great pont about the TV. unless your tv can pull 720, and hopefully 10080p you wont reallysee the differences picture-wise. They do have better control and features than Standard DVD, due to available space, but you can not only probably wait, but save more as cost on Standard DVDs will fall!
Great blog and post!
I’m pretty much a middle of the road adopter. I like things that improve my life and am willing to pay for those. By I am not willing to be the first person to adopt the new technology. I want the price to come down first, and ost of the bugs to be worked out before I buy in.
I think I’m the reverse of an early adopter. I only bought my first regular dvd player a few months ago. But then, I’m not a big watcher of dvds, much preferring the whole cinema experience. Probably a good job my purchases match my lifestyle.
I used to be in the early adopter group, but have now settled into the “let the prices settle and bugs work out” group.