Jeremy had to call me in my sickbed this morning to tell me that two more nails had been put into the coffin of Blu-Ray (the 50 GB optical media).  First, the powers that be have decided not to allow the release of adult titles (aka, porn) on the medium.  Second, Toshiba just announced a 51 GB implementation of rival HD-DVD media.

I did some searching on the web and found this older article about the role of the adult industry in deciding the VHS versus BetaMax-like war that had been brewing around the Blu-Ray and HD-DVD standards.  Regarding the Puritanical decision on Blu-Ray, this Ars Technica blog suggests that it is not true that prohibitions have been formally stated by Sony, as reported by one adult film company, but the economics of Blu-Ray simply don’t work for the adult industry. 

Question of the moment:  is the adult industry the ultimate decider of which format prevails as it arguably was in the VHS/BetaMax war?

Lukeisback.com gave an interesting overview of the size of the industry here (saving me the need to surf the net for this information in my diminished state), from which I quote the following:

The porn industry (through its trade magazine Adult Video News) tends to inflate its size because that makes porn seem more powerful and respectable. Conservative critics of porn usually want to lowball the size of the industry to make it appear more marginal.

When AVN estimates U.S. DVD sales and rentals for 2005 at $4.28 billion, there is no way that that figure is an underestimate (because it would be against porn’s interest to underestimate its size and AVN is the spokesman for porn). When AVN notes that that sales and rental figure has been essentially flat since 1996, there is no way that AVN is underestimating. When AVN (and the U.S.’s largest porn distributor IVD) said there were almost 13,600 new releases in 2005, there is no way they are underestimating.

Porn has released about 10,000 or more titles annually (according to AVN and IVD) since 1999. AVN estimates $1.006 billion in wholesale porn VHS and DVD sales in 2005. Since 1996, AVN has estimated wholesale porn DVD and VHS sales at no less than about $800 million.

The Video Software Dealers Association (VSDA) is the trade group for American DVD/Video/software dealers. Their incentive is to make their industry look as powerful as possible. There’s no way they are underestimating their industry’s size.

VSDA estimates U.S. DVD/video sales and rentals at $24.3 billion for 2005. That’s up from the VSDA’s $20 billion estimate for 2000. In July of 2005, VSDA placed Adult DVD sales at 2% of DVD releases. That would make porn DVD sales and rentals a $486 million business for 2005.

According to the VSDA, there are approximately twice as many dollars spent on sales as rentals. If this ratio holds for porn, DVD/video sales would amount to $324 million for 2005.

If the article is accurate, and I have a feeling that it is, we are talking about a significant, but not decisive, chunk of media revenues derived from porn. 

Does it matter that Joey won’t be able to play it on his PS3?  I doubt it.

In fact, most of the adult industry folks I have spoken with are less interested in talking disc format than download efficiency:  why burn a movie to disc if you can find an efficient way to send chapters of the disc directly to a computer or media center or set top box for playback on an LCD monitor — whether a TV or monitor?

Frankly, I think this “adult industry going HD-DVD” thing is a red herring.  That said, content will play a decisive role in deciding the winner of the format wars — but not from the standpoint of the format itself.  Most important is how expensive and complicated disk authoring is given the technology used, whether you can get discs pressed economically, how these costs are reflected in product costs to the consumer.  Let’s also keep in mind that the expense of media players and burners for the consumer will be a gating factor on adoption.  And, of course, the big payout is dictated by whether any good content (porn or not) is produced that will encourage folks to buy, rent or download a movie in the first place.

The fact that Toshiba has just taken HD-DVD beyond the 50 GB capacity of Blu-Ray is another red herring.  Such improvements, for all their fanfare, seem to suggest that the standards are not yet fully baked and that a new player will be required for each improvement in the technology.  They may actually have the impact of inhibiting sales of burner/players for one format or another.  In the case of VHS or standard DVDs, standards seemed to have jelled for the most part prior to massive consumer uptake.  I hedge a bit on DVD because the manufacturers of the DVD player have been “adding value” around their platforms every couple of months, providing support for different MPEG and AVI formats for video as well as things like PhotoDisc support. 

Here’s one I’m noodling over.  Let’s say that I have a 50 to 51 GB burner.  Recording (illegally or not) backups of DVDs in my collection in VOB format (the files on standard motion picture DVDs), I can store something like 10 4.7 GB DVDs on one piece of high end media.  However, improvements in DivX avi format, which can be produced by “ripping” VOBs and shrinks movie sizes down to about 600 to 800 MB in the process, allow me to squeeze six or seven movies onto one regular old DVD+R for less than a buck to be replayed on a player that costs under $40 today.

As they say in the adult industry, ultimately its not the equipment, its how you use it.  

 

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