An audience of two

Saturday November 03, 2007

The High Def Format wars part 2
I was thinking more about the Toshiba HD-DVD player sale from yesterday. And I've read some criticism that it doesn't make sense from Toshiba's perspective to fill the market with cheap players - why would consumer electronics manufacturers enter a marketplace where margins are so low?

It makes sense to me. If you look at the major backers of the two formats, Sony is the main force behind BluRay and Microsoft and Toshiba are two of the main forces behind HD-DVD. In fact the free DVD offer is co-sponsored by Microsoft. Every single HD-DVD player or disk that's sold means royalties for Toshiba and Microsoft.

So right now it makes sense for Toshiba to sell players at cost - or even give them away - so long as it gets HD-DVD media into the punters' hands. And having bought a HD-DVD player they are unlikely to rush out and spend another $200-$300 on a BluRay player just yet.

Now there's no denying that BluRay is the vastly superior technology. You can fit way more information onto a disk for one thing. Plus the standard includes Java, which makes for some great possibilities in terms of interactive menus etc. So even though Sony has a less than stellar record in terms of backing the winning horse (Betamax, SACD, MiniDisk, etc.) to some extent it's like the battle between CD-R and CD+R a few years ago; eventually there will be no clear winner, the standards will exist side by side. There's enough BluRay and HD-DVD disks in the market today to ensure that neither format will fade away completely. And there are already players that handle both BluRay and HD-DVD media, though they cost around $600. But the costs will fall as time goes on. My first DVD player cost about $300; the last one I bought cost about $30 and plays all kinds of media (CD-R, MPEG-3, DiVX) that my old Sony player won't.

So eventually the market for HD players will be like the market for DVD players today. The winners will be those who embrace both technologies. In the meantime, buy whatever format you like and expect to replace it in a year or so.

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