In her debut post at TechCrunch, Sarah Lacey talks about some of the challenges being faced by Sirius and Blu-ray. Her two points can be boiled down to a misaken assumption by the two technologies’ backers that that the past will repeat, especially in the Web era. Many of the commenters have pointed out some flaws in her arguments (Diggnation vs. Dark Knight?), but I offer these points in response.
It may be the case that Blu-ray disc revenues (or even players) are not growing fast enough to offset the decline in their DVD counterparts, but we are currently in a transition time between the two technologies.
About the only things that Sirius and Blu-ray have in common is a focus on content quality and appeal to an older demographic. While Sarah Lacey uses a “focus group of two” (doubling the n from the usual cliche) in her and her husband to discuss the myriad alternatives available to watch movies today, these are currently niche alternatives and, as I’ve often said, while Netflix streaming may be fine for renting, digital distribution has not provided a convenient alternative to discs for ownership.
Ironically, one of the products that has the best chance of broadening the audience for movie streaming services is Blu-ray players. Blu-ray’s biggest competitor – the DVD – is at an inherent disadvantage as the -price gap narrows for hardware. Sirius and XM, on the other hand, could not effectively follow where consumers went for their music – to PCs and portable players. MP3 and Internet radio options for the vehicle aren’t great, either, but consumers have coped or done without.
Satellite radio may have had a loose precedent in the success of cable and satellite TV, but the usage scenario was very different. A majority of US consumers spend enough time at home consuming quality entertainment to justify the investment in paid television service; not so for satellite radio. In fact, outside of capital expenditures, Sirius and XM ran up huge debt on subscriber costs and acquiring exclusive content. While Blu-ray certainly has entailed marketing costs, its battle with HD-DVD was one that was much more lopsided than Sirius vs. XM. Yes, Blu-ray, like Sirius XM, faces competition from Internet sources, but the mainstream of the market is its to lose over at least the next five years.