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HD-DVD still well positioned against Blu-Ray

January 15th, 2008 by Maxim · No Comments · 4,156 Views


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Toshiba slashed prices to its HD-DVD players again this week. Now the entry-level Toshiba HD A3 player has suggested retail price of just $150 – very close to what regular DVD players sell for, while medium and top players, HD A30 and HD A35 with 1080p output now have MSRP of $200 and $300 respectively. The 5 free movies deal with the purchase of HD-DVD player has been extended, and Toshiba promised to go on “extensive advertising campaign” to promote advantages of HD-DVD over Blu-Ray.

Although the advertising campaign may be too late to revive HD-DVD, it may annoy Sony, which is interested in ending format war as soon as possible. Can Toshiba force Sony to pay them a bribe to make HD-DVD go away?

So what are the advantages of HD-DVD over Blu-Ray?

  1. Price. HD-DVD players use cheaper hardware, and it costs next to nothing to upgrade existing DVD manufacturing facilities to produce HD-DVD, while Blu-Ray requires more expensive hardware and special process of manufacturing and extra protective coating because information on Blu-Ray disk is closer to the surface, so it’s more susceptible to data loss due to scratching.
  2. Format specification. HD-DVD format had been finalized and before Blu-Ray format was even drafted, and mandated all manufacturers to include features like specific list of audio decoders and network connectivity. Sony and BDA were forced to release Blu-Ray format before the specification was finalized in response to HD-DVD, and many manufacturers had cut corners and did not implement most of the features of BD, with most common missing features being network connectivity and BDJava, a version of Java that is supposed to provide interactive features of Blu-Ray disks. In fact in the Consumers Electronics Show the BDA reportedly could suggest PlayStation 3 as the only recommended Blu-Ray player. There are many stand-alone Blu-Ray players by other manufacturers and by Sony as well, and only PlayStation 3 is “future-proof”. Blu-Ray specification version 2.o (a.k.a. “Profile 2.0″) has not been finalized yet either, and the early adopters of stand-alone Blu-Ray players will be left out when the new Blu-Ray format is released later this year.

Toshiba has been forced to more aggressive market action when Warner Bros., accounting for roughly 20% of the movie market, had switched from HD-DVD to Blu-Ray exclusively. Universal and Paramount are the only remaining studios supporting HD-DVD exclusively. So now the question is whether retailers would be able to recommend HD-DVD hardware to consumers given the fewer movie titles will be released in the future on HD-DVD, unless Toshiba can win studio support back. To do that, it will need to convince studios that consumers are choosing HD-DVD hardware, so slashing prices on its players even further is the smart move by Toshiba.

** Update (Jan 30, 2008) **

After several retailers in United States, Australia and UK had switched to Blu-Ray exclusively, Toshiba’s Olivier Van Wynendaele, European assistant general manager of Consumer Products Division had issued a statement affirming Toshiba’s commitment to HD-DVD and praising Toshiba’s efforts to promote HD-DVD and expand its customer base. After latest price drops consumers can pick up an HD-DVD player for less then $200. Although Blu-Ray movies had been outselling HD-DVD movies recently, the adoption of Blu-Ray is still at relatively low rate. The vast majority of Blu-Ray players are actually Sony’s PlayStation 3. In fact at recent Consumer Electronics Show in Las Vegas the Blu-Ray alliance had to admit that PS3 is the only Blu-Ray player they can recommend. Those early adopters who bought stand-along Blu-Ray players will be left out when Blu-Ray Profile 2.0 specification will be finalized. That includes Sony’s own standalone BD players. As far as number of movies already available on HD-DVD vs Blu-Ray, Toshiba’s representative said this: “Even before promotional price cuts, standalone HD-DVD players represented 60% of the overall standalone high definition players… On average standalone HD-DVD player owners already bought 3.5 movies per player, compared to less then 1 movie per stand-alone Blu-Ray player.” The keyword in this statement is “standalone” – as mentioned above, the vast majority of Blu-Ray players are Sony’s PlayStation3, and Wynendaele failed to mentioned that. To be fair, both sides have their way with numbers when they try to prove their case.

** Update (Feb 7, 2008) **

Microsoft slashed prices on its XBox HD-DVD add-on from $179 to $129, while entry-level 1080p HD-DVD player from Toshiba now costs around $125. Micsoroft’s move may help the format because there are many more XBox consoles and many more games for Xbox then there is for Sony PlayStation 3 or especially for Wii. Suddenly when you buy XBox plus hard drive plus wireless add-on plus HD-DVD add-on, you end up in the same price range as 40GB PlayStation 3, but with a lot more content available. If only XBox consoles were as durable as PS3…

** Update (Feb 11, 2008) **

The latest stab in the back of HD-DVD has come from Netflix. It has announced today that they will become a Blu-Ray exclusive shop. Blockbuster has gone the same way about a year ago. The reason Netflix has decided to make the switch is probably their expectation that the number of titles on HD-DVD will become smaller since only two Hollywood studios still release new titles on HD-DVD. The Blu-Ray supporters say the Netflix’s move is the last nail in the HD-DVD coffin, but some analysts think there’s still some life left in HD-DVD. After Toshiba cut prices, consumers can pick up an HD-DVD player with up-scaling of standard definition DVDs for $150 or even less. Even entry-level Blu-Ray players cost at least $400, and the only player that’s future-proof right now is a game console – Sony’s PlayStation 3. Even the specification for the Blu-Ray format is not finalized. However some retailers, such as Best Buy, now advise customers that Blu-Ray is the preferred format. Too bad even Sony’s own stand-alone players are not future-proof and many of them don’t even have network connectivity. Toshiba, Microsoft and NEC, the major creators of HD-DVD format, have finalized the HD-DVD specification before they started to produce hardware, and actually mandated all the features provided in the specification. You won’t find an HD-DVD player with a missing feature. Alas, Netflix customers with HD-DVD players will be very disappointed.

** Update (Feb 12, 2008) **

The HD-DVD issued a statement late Monday expressing their disappointment with Netflix’s decision and saying that they believe that HD-DVD is a better format for consumers based on the cost and high rate of adoption (number of players sold) and mentioning that Best Buy, which officially announced that they will recommend Blu-Ray vs HD-DVD from now on (they’ve been doing it before, it’s just they had made an official announcement), but “at least they will still carry HD-DVD titles and hardware, so consumers will have a choice”. The consumer education will play a major role in the format war. Judging by naivete of questions asked on HD video forums the public is not very well educated on the advantages of either format, and when they come to store they will have to trust store clerk’s recommendation.

** Update (Feb 16, 2008) **

WalMart, formely a supporter of HD-DVD, now has all of its HD-DVD players on sale and by June will offer only Blu-Ray players.

** Update (Feb 16, 2008) **

Following defection from HD-DVD by several studios, Netflix, BestBuy joned by WalMart on Friday, it has become known that Toshiba will abandon HD-DVD format.

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