DVD THE NEXT-GENERATION
Two new DVD formats (Blu-ray Disc and HD-DVD) are boldly going where no DVD has gone before-into the realm of high-definition. But even as the next-generation of DVD players cruised on to store shelves last year, the channel was speculative about the success and viability of these new DVD technologies. Would high-definition DVD players rocket into consumers' living rooms at warp speed or simply orbit some nebulous market niche?
To find out, CEA surveyed the CEA|CNET Tech First Panel, a group of early adopters (also referred to as tech enthusiasts) to measure their attitudes and opinions concerning the next-generation of DVD technology. Early adopters can greatly influence a technology's course after it enters the market. If tech enthusiasts are keen on the technology, then chances are good it also will attract mainstream consumers. But before these consumers can advocate for next-generation DVD formats they have to be aware, interested and even using the technology.
The study found some 85 percent of tech enthusiasts are aware of Blu-ray Disc and HD-DVD. However, only nine percent of these early adopters are "very" familiar with all the details surrounding next-generation DVD.
Unfortunately, the gulf between awareness and understanding is breeding confusion and leading to misconceptions about the technology. For instance, 24 percent of tech enthusiasts are either not sure or do not think they will be able to play their current library of DVDs on next-generation DVD players.
What's more, 50 percent of tech enthusiasts are not certain that Blu-ray Disc and HD-DVD movies are available for purchase; 41 percent do not know that next-generation DVD movies are available for rent; and 34 percent think that (or are not sure if) next-generation DVD players will work only with high-definition displays. Left unremedied, these misconceptions among early adopters could result in barriers to the technology's adoption.
The study reveals warning signs of only lukewarm interest in owning a next-generation DVD player among these early adopters. Less than one-third of tech enthusiasts (32 percent) are interested in owning a DVD player with high-definition capability and nine percent were not at all interested in owning this technology.
Based on these results, one might think the outlook for next-generation DVD is dim. What are tech enthusiasts' concerns? What will spark their interest?
Perhaps surprisingly, tech enthusiasts' top concern regarding Blu-ray Disc and HD-DVD is not price-but all the uncertainties that come with two competing formats in the marketplace. In this case, a purchase is seen as a gamble and no one likes to lose.
The study found tech enthusiasts also are very price sensitive when it comes to buying next-generation DVD players. While 60 percent of these consumers say they would likely buy a next-generation DVD player if it cost $200, only 28 percent say they will buy one if it cost $300. And when the price jumps to $500 (the current entry level price for a player), only eight percent say they will likely buy one.
The possibility of a unified next-generation DVD format seems remote at this stage; however, the study suggests lower pricing for Blu-ray Disc and HD-DVD players and movies may be the key to building consumer interest and adoption.
Despite the concerns tech enthusiasts have over competing formats, nine percent of them, or nearly two million households, say they plan to purchase a next-generation DVD player within the next year. Taking into account that not all potential buyers will follow through, CEA forecasts roughly 800,000 tech enthusiasts will buy a device in 2007.
Clearly the industry needs to educate consumers and build awareness of next-generation DVD technology. Pricing also will govern the pace of consumer adoption. The research shows few consumers are comfortable with high-stakes, high-risk scenarios concerning CE product purchases.
Let's hope the goal of achieving broad consumer interest and adoption of next-generation DVD does not become a five-year mission but is achieved more rapidly.
