I’m just going to say it: The roll-out of 3-D Blu-ray this year has been an unmitigated disaster. The technology is there and ready (and by all accounts is very impressive), but the unfocused marketing and paltry selection of titles available have curtailed most consumers’ interest in the product. Chief among the major screw-ups has been the limiting of desirable titles to brand-exclusive bundle packages. You want to watch ‘Monsters vs. Aliens‘ in 3-D? Buy a Samsung 3-D starter kit for $350. How about ‘Ice Age: Dawn of the Dinosaurs’ or ‘Coraline’? Oh, sorry; those are only available with the Panasonic 3-D kit (also $350). Can you use the Samsung glasses with a Panasonic TV or vice versa? Of course not. And now we’re being told that the most-wanted 3-D title of all will be locked into an exclusivity deal for another year? It’s like someone is purposefully trying to kill 3-D Blu-ray before it can possibly gain any traction.
Ever since ‘Avatar‘ in 3-D was released as a Panasonic exclusive title at the beginning of this month, Panasonic owners who’ve obtained the disc have been auctioning it off on eBay for astronomical prices. Meanwhile, behind the scenes, rumors in the industry claimed that the exclusivity deal for this title would be extremely short-lived, perhaps only a couple of months – just enough to get Panasonic through the holiday sales season. But that all changed this week when new rumors started circulating that in fact the disc will be locked up with Panasonic through February 2012.
From a purely business perspective, I can understand why hardware manufacturers have found these exclusivity deals appealing. The thought is that consumers who are eager for a specific title (like ‘Avatar’) can be swayed to purchase the TV brand and corresponding 3-D hardware that offers that title as an exclusive. “If you want ‘Avatar’, and we know you do, you’re going to have to get yourself a new Panasonic TV today!”
The flaw in this thinking is that consumers are rarely stupid enough to base their entire TV purchasing decisions (especially for sets that cost thousands of dollars) on getting a movie or two thrown in. People will buy the TV brands and models that fit their needs best, not the ones that come with the nicest swag. By locking these major titles into exclusivity deals, all the studios and hardware manufacturers have done is upset consumers who’ve bought (or decided to buy) different brands.
What happens if you actually purchase a Panasonic TV just to get ‘Avatar’, and then your kids beg you to watch ‘Monsters vs. Aliens’ in 3-D next? Or vice versa: You bought a Samsung set to get ‘Monsters vs. Aliens’ and now want to watch ‘Avatar’? In either case, you’re screwed; that’s what it amounts to. This is a game that the consumer cannot win. And it’s infuriating enough to convince many potential buyers to just sit out this product launch entirely, to wait until the mess is straightened out and they can buy the titles they want without artificial restrictions. What point is there in buying a 3-D TV if there’s little to no worthwhile 3-D content to watch on it?
Randy Fry, the President and co-founder of Fry’s Electronics, recently gave an interview where he talked about the dangers of exclusive product deals. Fry said:
Our consumers fully expect that manufacturers roll out their new product introductions to all retailers (partners) simultaneously. Exclusive product roll outs simply ignore the consumer’s needs by destroying their loyalty to the retailer they depend on. Manufacturers must make their marketing decisions in favor of what is best for the long-term health of their brand and our industry. Not for the misguided purpose of reducing competition.
He’s clearly talking about retailer-exclusive products there, not the brand exclusives we’re dealing with, but the basic principle is very much the same. These exclusivity deals are short-sighted and harmful to the long-term growth of the format, and may just kill its chances of ever catching on with consumers.