Sony PSP Movie Sales Strong

By Richard Menta 5/25/05

Two weeks ago when I reviewed the Sony PSP for its movie and music prowess I was stunned by the clarity of Spider-Man 2 as I viewed it on that unit's small, but sharp, widescreen display. The movie was delivered on Sony's Universal Media Disc (UMD), a new proprietary format that in several weeks Sony put into the hands of 1.2 million users. I said this in the review:

The Sony PSP is available on Amazon

If UMD proves to be a smash hit one area it can affect is the Blu-Ray/HD-DVD battle going on it Hollywood right now as it would force the studios to commit resources to the smaller UMD format while they hedge on the two larger formats…if UMD movie and album sales achieve Sony's wildest dreams as a market force it will increase the risk of success for all later formats and delivery schemes.

Well, the numbers are starting to come in on UMD movie sales and the results are excellent.

Since the introduction of the PSP two Sony titles have hit the 100,000 mark in unit sales, Resident Evil 2 and House of the Flying Daggers. Both titles shipped on April 19th, reaching these numbers within a month of release. To put that in perspective the first DVD title to reach 100K was Air Force One and it took 9 months to reach it.

Hollywood has taken notice on these numbers and all but one are jumping in with select titles that they feel will best play to the PSP's target audience of teens and twenty-somethings. The only studio sitting out right now is Warner Brothers and the reason is because they have a competing technology called mini-DVD. With the success of UMD sales Paramount, Fox and Universal, who previously agreed to support mini-DVD, have dropped it.

The first casualty, mini-DVD shows that the movie industry is not going to support too many different formats as multiple formats increase shipping and warehousing costs. This is why twenty years ago the studios dropped support of Sony's Betamax format, leaving only VHS behind. One format is simply more cost effective.

DVD is set to replace VHS, but tape continues to be sold in movie and record stores because a significant percentage of the market has not moved over to DVD yet. The success of UMD puts a third format on store shelves. Even as VHS fades how much room is there left for a fourth or fifth format?

Hollywood does not want to get into any more of these format wars. We see what it is doing to the music industry with the Apple iTunes AAC codec versus Microsoft's WMA codec (with and without Janus technology) versus Sony Connect's ATRAC3 codec. Songs purchased on iTunes will not play on anything but an iPod, Connect tunes are limited to Sony players, etc.

And for the powerful iPod? UMD's success will no doubt affect Apple's plans to move into video media delivery. Despite continued denials by the company, many expect an iPod Video to appear in time for the Christmas holidays. Apple likes to impose its own standards and should an iPod video appear, the PSP/UMD success will pose a hurdle (unless of course Apple adopts it). This is true even if Apple decides online delivery of movies and TV shows are the way to go, because how many delivery schemes do consumers want to invest in?

Right now there are over 70 titles available on UMD with hundreds more coming this fall as the studios rush to serve this new market. Paramount's Viacom buddies, Comedy Central, Nickelodeon, and MTV are also jumping on the UMD bandwagon announcing the release of several popular programs including Chappelle's Show and SpongeBob. For mass transit commuters, half-hour TV programs may prove the ideal content for that train and bus ride into work.

Bottom line, should UMD titles line the retail racks this Christmas, there will be less room in stores to devote to other formats and, quite possibly, in the living rooms of consumers. Blu-Ray or HD-DVD will eventually replace the standard DVD format, but the decision over which format may be postponed as media companies avert their attention to build the growing market for UMD titles.

Analysts expect the Sony PSP market to eventually grow to 25 million households. This is less than half of the 65 million households that possess a DVD player, but it's a large audience nonetheless.



The iPod Shuffle is available on Amazon

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