HD-DVD pronounced dead; film at 11

[unixronin]

The high-definition DVD format war is over.  The New York Times declared HD-DVD dead on Saturday after Wal-mart announced it would carry only Blu-Ray once its current stock of HD-DVD products is sold.  This morning, Toshiba, who developed HD-DVD, announced that Toshiba will cease production of HD-DVD equipment, and terminate all HD-DVD operastions by the end of March.

Though the latest development is a huge setback, Mr. Nishida said Toshiba was still committed to electronics and it planned to rethink its vision for the business.  In a hint of the direction the company might take, he said Toshiba might think about its role in the online video-downloading market more seriously.  Toshiba has no plans to start selling Blu-ray players, he said.

[...]

Though HD DVD's defeat will clear up much of the confusion over high-definition DVDs among consumers, analysts say consumer electronics makers will now have to convince consumers that the crisper images on Blu-ray players are worth upgrading to.  And companies like Sony and Matsushita Electric Industrial Co., the maker of Panasonic products, which had joined together to fight HD DVD will now be competing in earnest with each other.

Emphasis on the last sentence mine.  Watch for a serious price war on Blu-Ray players and recorders, coming soon to electronics stores near you.

This is bad for Toshiba, but good for consumers.  Blu-Ray was clearly the superior format from the very start; many of the design decisions in HD-DVD were driven by the desire for the cheapest possible switchover from SD to HD disc mastering and pressing, rather than any actual technical superiority.

(WSJ article is restricted; full text appears below)

TOKYO -- Blaming the loss of support from a key movie studio, Toshiba Corp. said it is pulling out of the HD DVD business, handing victory to Sony Corp.'s Blu-ray technology in the fierce format war over high-definition DVDs.

Toshiba said Tuesday that it would cease production of its HD DVD players and recorders immediately and close out the business by the end of March.

"It was a heartbreaking decision, but we considered the impact of continuing the business on our earnings, the next-generation DVD market and consumers," said Toshiba Chief Executive Atsutoshi Nishida at a news conference.  He later added that he realized there was no chance of winning the battle, particularly after Time Warner Inc.'s Warner Bros., a longtime Toshiba partner, made a pivotal decision last month to side with Blu-ray.  Since then, retailers from Best Buy Co. to Wal-Mart Stores Inc. have all thrown their weight behind Blu-ray.

Though such swift decisions are rare for a Japanese company, especially when corporate pride is at stake, and analysts had assumed Toshiba would let the business fade out quietly, Mr. Nishida said the company felt it was important to read the market environment and take action quickly.

Under the same reasoning, Mr. Nishida simultaneously announced plans to strengthen its flash memory business by investing more than ¥1.7 trillion ($15.85 billion) along with its U.S. partner SanDisk Corp. to construct two new plants in Japan.  Flash memory is a chip that is typically found in digital cameras and music players, but computer makers are slowly starting to replace hard-disk drives with them because it would slash boot-up times and make laptops lighter.  The chip is still too expensive to be used widely in computers, but the continuing price decline could increase demand.

Investors have so far welcomed Toshiba's decision, pushing its shares up 5% to ¥784 on the Tokyo Stock Exchange, since last weekend, when news first broke that the company was planning to pull out of HD DVD.

The HD DVD business was a gamble for the company, which had hoped to increase its relatively small presence in the consumer electronics industry by winning the high-definition DVD war.  It had planned on making consumer electronics one of its main pillars of growth in addition to its semiconductor and nuclear reactor business.

Toshiba said about one million HD DVD players have been sold globally, including players that can be attached to Microsoft Corp.'s Xbox 360 videogame console.  But that was still far short of Blu-ray's 6.3 million players, according to the Blu-ray Disc Association.  That figure includes Sony's PlayStation 3 videogame console which can double as a player.

Though the latest development is a huge setback, Mr. Nishida said Toshiba was still committed to electronics and it planned to rethink its vision for the business.  In a hint of the direction the company might take, he said Toshiba might think about its role in the online video-downloading market more seriously.  Toshiba has no plans to start selling Blu-ray players, he said.

Winning the format war is a major coup for Sony, which is still burdened by painful memories of its Betamax technology's loss to the VHS videocassette in the 1980s.  It is also important for the company because it is trying to shift its emphasis to the innovation of new technologies as it finishes up a three-year restructuring plan.

But Toshiba will be leaving Sony and its other Blu-ray partners with a much tougher business in the aftermath of the heated multiyear battle.  Especially over the past several months, Toshiba had been aggressively cutting prices on its HD DVD players and offering free movies with it in the hopes of luring more consumers.  That has forced Blu-ray manufacturers to lower their prices as well, a move that has cut into profits faster than expected.

Analysts believe that one of the reasons why Toshiba decided to withdraw from the business was that the market had become much less attractive than it had initially thought.

Though HD DVD's defeat will clear up much of the confusion over high-definition DVDs among consumers, analysts say consumer electronics makers will now have to convince consumers that the crisper images on Blu-ray players are worth upgrading to.  And companies like Sony and Matsushita Electric Industrial Co., the maker of Panasonic products, which had joined together to fight HD DVD will now be competing in earnest with each other.

Comments

Re: maybe i'm paranoid, but...

[bratling.livejournal.com]

not scratch-proof, but generally repairable. the scratches can be filled with filler of the same index of refraction and polished flat. the data layer is safe.

BD, the data layer itself will get damaged.

we'll see, i guess. :-/

Re: maybe i'm paranoid, but...

[unixronin.livejournal.com]

not scratch-proof, but generally repairable. the scratches can be filled with filler of the same index of refraction and polished flat. the data layer is safe.

Do you know of a good way of doing that? I've tried a couple of different off-the-shelf "CD repair" kits, both the polish-out-the-scratches kind and the fill-the-scratches kind, and haven't had better than a 50% success rate with either one.

(Hmm. Maybe if I tried using the polisher and then the filler on the same disc...)

Re: maybe i'm paranoid, but...

[bratling.livejournal.com]

no, i'm too lazy to actually do those things. i just like knowing it's theoretically possible. :-)