Steve Jobs' wise decision to avoid Blu-ray
With Blu-ray sales losing steam, Apple's decision to avoid the format altogether seems smarter than ever.
Just last week, Sony warned shareholders that revenue from the company's 2013 fiscal year would be much lower than previously anticipated. This was, of course, in large part due to Sony's decision to exit the PC business. But also playing a role in the company's bleak financial picture was the diminishing relevance of Blu-ray.
The second charge is due to what Sony calls "demand for physical media contracting faster than anticipated," especially in Europe. Because of this, Sony says it does not believe the business will generate "sufficient cash flow in the future to recover the carrying amount of long-lived assets."
Back in 2008, Blu-ray was hoisted as the next-gen video standard of choice after the format emerged victorious in its short-lived yet fierce battle with HD DVD. Naturally, questions and rumors soon began surfacing regarding Apple's alleged plans to incorporate Blu-ray drives into its product line.
Steve Jobs, back in October 2008, famously explained why Apple wasn't yet on board with Blu-ray, drawing attention to the format's complex licensing scheme.
Blu-ray is a bag of hurt. I don't mean from the consumer point of view. It's great to watch movies, but the licensing is so complex. We're waiting until things settle down, and waiting until Blu-ray takes off before we burden our customers with the cost of licensing.
But by February 2009, Blu-ray licensing was made a whole lot easier when Sony, Philips, and Panasonic announced that companies wishing to manufacture Blu-ray devices would only need to pony up for a single license. This was a rather big deal given that 18 separate companies at the time held Blu-Ray patents.
So what happened next?
Apple under the helm of Steve Jobs continued to take a "wait and see" approach. And so, time marched on, new Macs were released, and Blu-ray on the Mac quickly became a rumor that no one cared about anymore.
Cynics might of course argue that Jobs never gave Blu-ray a fair shot because he wanted consumers to access video via the company's iTunes Store. This is a valid point, but even if we ascribe an iTunes bias to Jobs, it stands to reason that Jobs and Apple looked ahead and realized that physical media was not the way of the future. After all, Apple's return to tech relevance with the now iconic iPod was predicated on consumers abandoning physical media for a digital alternative.
Indeed, Jobs in July of 2010 addressed via email why Apple's most recent Mac Mini refresh didn't include support for Blu-ray:
Bluray is looking more and more like one of the high end audio formats that appeared as the successor to the CD – like it will be beaten by Internet downloadable formats.
No, free, instant gratification and convenience (likely in that order) is what made the downloadable formats take off. And the downloadable movie business is rapidly moving to free (Hulu) or rentals (iTunes) so storing purchased movies or TV shows is not an issue.
I think you may be wrong – we may see a fast broad move to streamed free and rental content at sufficient quality (at least 720p) to win almost everyone over.
And today, people are consuming more video than ever before. But as opposed to purchasing physical media, the majority of consumers are getting their fix via services like iTunes, Netflix, Hulu, HBO Go, Amazon Prime Video, YouTube and more.
While hindsight is always 20-20, looking back, I think it's fair to say that if Steve Jobs had opted to include Blu-ray drives in Apple's Mac lineup back in 2009/2010, that decision would now be viewed as a shortsighted mistake.
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