Could HD DVD be losing steam in the format war?

[Sir Terrence the Terrible]

It looks like HD DVD agressive roll out might not be so aggressive at all.

http://online.wsj.com/article_email/0,,SB112363894801609440-H9jfoNklal4mpysZHqHaKWIm4,00.html

[kexodusc]

I don't see how this is significant at all. The first few quarters wouldn't amount to 1 fraction of 1000th of a percentage of market share, and the general market still wouldn't hear about this stuff until long after both products were well into production.

The only news I got from this is that there are indeed serious talks underway in an effort to combine the two formats to avoid a war. This is a positive. If anything, Toshiba's reluctance to push forward can probably be attributed to their optimism on this front, or at least a more logical "wait-and-see" approach.

Let's cross our fingers.

[Sir Terrence the Terrible]

I don't see how this is significant at all. The first few quarters wouldn't amount to 1 fraction of 1000th of a percentage of market share, and the general market still wouldn't hear about this stuff until long after both products were well into production.

The only news I got from this is that there are indeed serious talks underway in an effort to combine the two formats to avoid a war. This is a positive. If anything, Toshiba's reluctance to push forward can probably be attributed to their optimism on this front, or at least a more logical "wait-and-see" approach.

Let's cross our fingers.

Actually Kex, the serious talks broke down, and everyone has dug in their feet. This really is significant in that Toshiba will no longer have a huge lead out of the gate they hoped for. And with Fox going with BlueRay, this give no one an advantage in product releases.

The best thing we can hope for at this point is a compromise or a universal player.

[kexodusc]

Actually Kex, the serious talks broke down, and everyone has dug in their feet. This really is significant in that Toshiba will no longer have a huge lead out of the gate they hoped for. And with Fox going with BlueRay, this give no one an advantage in product releases.

The best thing we can hope for at this point is a compromise or a universal player.

Hadn't heard talks broke down, that sucks.

A small delay of the release date is quite insignificant in itself in this case...those few extra months were never, ever expected to translate into "a huge lead out of the gate". Maybe in home theater magazines, but not in practical terms. We're not even talking a year here, and only very few markets would receive HD-DVD. Of those few markets, only a fraction of early adopters would buy. Let's face it...HD-DVD and BluRay weren't going to explode with millions of sales in the first year anyway. There are too few early adopters. And this is one area where early adopters were knowledgeable enough to not want to get burned by commiting to one format to early. Both BluRay and HD-DVD are on record claiming timing as the least significant factor.

When I read that article Sir T, it mentions that the Studios behind HD-DVD are reluctant to release their titles. My educated guess is they know more than we do. It stands to reason that if Toshiba thought success was at all dependent on early release, they'd find a way to make it work release what they could just to get it out there, or BluRay would be accelerating their plans. I wouldn't be surprised to see both slow down now.

I also wouldn't be surprised to see one camp (Toshiba, Sony has a history of fighting to the bitter end) abandoning their respective format. Owning the license to these formats isn't a cash cow at all for these two giants. So much so that patents and license fees aren't even explictly valued as material in the income statements or balance sheet. It's not as though it's a lost opportunity to unimaginable riches.
Toshiba in particular would stand to make more off the electronics devices of BluRay or HD-DVD than they ever would the intellectual property. But I digress...

My guess is their responding to the overwhelming majority of the market that's said they don't want a format war and won't buy a player until it's resolved.

Methinks there's more going on here...

[Woochifer]

Actually, the way I read the article, it looks like several key HD-DVD players are slowing down their rush to market. I really hope that this represents a pause to make a last ditch effort to negotiate a single format.

That Warner is holding back on its HD-DVD releases is actually an encouraging sign as far as I'm concerned, since they've been one of the most forceful backers of the format since the beginning (and it's in their self-interest to push HD-DVD along since they hold several key DVD patents, and HD-DVD represents an extension of that franchise).

HD-DVD's keys to success have been their ~6 month head start, their exclusive hold with half of the major Hollywood studios, and as far as I'm concerned, their DVD-compatible flipper disc format (this might not be possible with the thinner substrate used on Blu-ray discs). Hopefully this momentum slowdown will at least bring everybody back to negotiating table before a full-fledged format war chains us down to 480p DVD for the next 20 years.

[kexodusc]

Hopefully this momentum slowdown will at least bring everybody back to negotiating table before a full-fledged format war chains us down to 480p DVD for the next 20 years.

That does appear to be where this is headed, doesn't it? That's the first thing I noticed too, Wooch, when the some of the biggest proponents for HD-DVD decide to take a step back, you can bet it wasn't just a casual decision.

I haven't heard one positive bit of news regarding HD-DVD or BluRay outside of technical merit yet. So the first few HD-DVD's hit the market in Q4. By Q3 2006 we'll see BluRay.
I wouldn't at all be surprised to see them test each other out for awhile before it sinks in that a format war isn't the way to go.

[Woochifer]

That does appear to be where this is headed, doesn't it? That's the first thing I noticed too, Wooch, when the some of the biggest proponents for HD-DVD decide to take a step back, you can bet it wasn't just a casual decision.

I haven't heard one positive bit of news regarding HD-DVD or BluRay outside of technical merit yet. So the first few HD-DVD's hit the market in Q4. By Q3 2006 we'll see BluRay.
I wouldn't at all be surprised to see them test each other out for awhile before it sinks in that a format war isn't the way to go.

Just look at what has occurred over the years as format wars have stirred on. It seems that the only major consumer music and video formats that have succeeded without some form of format war or uncertainty at the outset were the vinyl record, FM radio, broadcast stereo TV, and the CD.

With Betamax and VHS, it took more than seven years before the VCR became a mainstream product, and it took close to 10 years to achieve majority household penetration, which accelerated after the demise of Beta (i.e. when Sony started selling VHS VCRs).

Quadraphonic had four formats battling it out for market supremacy. All four of them failed within less than five years.

AM Stereo was a similar fiasco with four separate formats battling it out in the late-80s, with different sets of backers. None of the formats gained any sort of significant traction, and all of them were abandoned shortly.

Even the DVD had a tremendous amount of uncertainty at the beginning with some studios showing only tentative support for the format. The ill-fated (and ill-conceived) DIVX pay-per-view disc format created even more uncertainty, since studios like Disney, Fox, and Paramount wanted to see DIVX succeed, so that they would not have to fully support the open DVD format. Only after DIVX died a deservedly miserable death in the market did those studios fully get on board with the DVD program.

As I mentioned elsewhere, HD-DVD/Blu-ray are playing to a much smaller potential market than the DVD did when it was introduced. The only people who will benefit from the new formats are people who already own HDTVs, and that's less than 20% of U.S. households. With the analog HD restrictions, the market gets reduced even further. DVD benefited practically everyone who owns a TV, because not only did it provide much better image quality that was clearly evident on a regular TV, but it added multichannel audio and interactive features and bonuses that were not possible with VHS. HD-DVD/Blu-ray provide no such equivalent benefit to a broad cross-section of consumers, which is why they have no business trying to put restrictions on what already constitutes a very limited market.

[kexodusc]

As I mentioned elsewhere, HD-DVD/Blu-ray are playing to a much smaller potential market than the DVD did when it was introduced. The only people who will benefit from the new formats are people who already own HDTVs, and that's less than 20% of U.S. households. With the analog HD restrictions, the market gets reduced even further. DVD benefited practically everyone who owns a TV, because not only did it provide much better image quality that was clearly evident on a regular TV, but it added multichannel audio and interactive features and bonuses that were not possible with VHS. HD-DVD/Blu-ray provide no such equivalent benefit to a broad cross-section of consumers, which is why they have no business trying to put restrictions on what already constitutes a very limited market.

This is true. Unless these guys think people with standard def TV's will buy their players just for the increased storage capacity on discs...not likely.
It probably will be several years before HDTV's are the standard in homes, but I suspect these formats are completely dependent on that. Eventually players will be affordable, and people without hi-def TV could still benefit from better sound quality and more (bleechhh) bonus features. Might be a tough sell to convince people with DVD players to buy a new player just for DTS and a few extra hours of nonesense...especially if an A/V receiver upgrade is required.

Perhaps this format war is still a few years away.

[Sir Terrence the Terrible]

This is true. Unless these guys think people with standard def TV's will buy their players just for the increased storage capacity on discs...not likely.
It probably will be several years before HDTV's are the standard in homes, but I suspect these formats are completely dependent on that. Eventually players will be affordable, and people without hi-def TV could still benefit from better sound quality and more (bleechhh) bonus features. Might be a tough sell to convince people with DVD players to buy a new player just for DTS and a few extra hours of nonesense...especially if an A/V receiver upgrade is required.

Perhaps this format war is still a few years away.

Logic would dictate that it is still years away. I personally think that some people will balk at having to purchase a new receiver/prepro to get the high quality audio. We have heard nothing from either Dts or Dolby about demo's of their new audio codecs. Dts did conduct some demo's of lossless Dts, but that was years ago, and they have not demo'd anything in combination with hi def video. I have not heard Dolby Digital plus at all.

So let's add this up. You need a new receiver with HDMI connections, and the new codecs for the audio, a new player to get the hi def signals, and if you only have hi def with analog connections, a new display device. This is a huge investment, and for those who have spent multiple thousands of dollars on their front projector, they are not likely to want to replace it soon.

It seems strange to me that we are not hearing anything from manufacturers about new receivers that are HD-DVD and BlueRay ready. How does Toshiba think that even early adopters with the cash to upgrade first are going to hear their format in all of its glory?

[kexodusc]

Logic would dictate that it is still years away. I personally think that some people will balk at having to purchase a new receiver/prepro to get the high quality audio. We have heard nothing from either Dts or Dolby about demo's of their new audio codecs. Dts did conduct some demo's of lossless Dts, but that was years ago, and they have not demo'd anything in combination with hi def video. I have not heard Dolby Digital plus at all.

So let's add this up. You need a new receiver with HDMI connections, and the new codecs for the audio, a new player to get the hi def signals, and if you only have hi def with analog connections, a new display device. This is a huge investment, and for those who have spent multiple thousands of dollars on their front projector, they are not likely to want to replace it soon.

It seems strange to me that we are not hearing anything from manufacturers about new receivers that are HD-DVD and BlueRay ready. How does Toshiba think that even early adopters with the cash to upgrade first are going to hear their format in all of its glory?

With all these obstacles and no solutions in sight over the next year or so, doesn't look like there's much point in either of these camps releasing anything in 2005 or 2006. I guess the good news in this is there's still time for a compromise.

[Woochifer]

With all these obstacles and no solutions in sight over the next year or so, doesn't look like there's much point in either of these camps releasing anything in 2005 or 2006. I guess the good news in this is there's still time for a compromise.

As with most things digital, I think HD-DVD/Blu-ray were getting rushed to market without consideration for whether the market is actually ready for those formats. If the DVD had not already come along and established itself as a runaway success story with consumers, then I would have said that the HD video disc is long overdue. But, alas the DVD was rushed to market before the technology was truly ready, and as is, represents a half-baked format because it provides progressive scan and multichannel audio but not true HD resolution (this despite the HDTV specs having been finalized five years before the DVD's introduction).

With the situation as is, an extra year or so for the two camps to come up with a unified format should benefit everybody involved, and give the market an extra year for more HDMI-enabled HDTVs to get into people's homes, and maybe even allow DTS-HD and DD Plus to see the light of day beforehand. Once a single format HD video disc is ready, then it might stand a reasonable chance for success.

[Smokey]

But, alas the DVD was rushed to market before the technology was truly ready, and as is, represents a half-baked format because it provides progressive scan and multichannel audio but not true HD resolution (this despite the HDTV specs having been finalized five years before the DVD's introduction).

Considering that as of today, may be 16 million homes have HDTV, then are you suggesting that DVD should have waited another 10 years before launching? So what we should do in meanwhile...watch VHS tapes :D

[Woochifer]

Considering that as of today, may be 16 million homes have HDTV, then are you suggesting that DVD should have waited another 10 years before launching? So what we should do in meanwhile...watch VHS tapes :D

The figures I've seen are closer to 6 million HDTV households in the U.S. and 10 million worldwide as of March 05. I'm suggesting that DVD should have waited a few years until the storage technology allowed for a true HD format to emerge. The technology has been ready for a few years now, and the primary reason HD-DVD/Blu-ray are poised to hit the market now is because of the slowdown in DVD player sales and how quickly the profit margins eroded on the DVD format. All of the market factors discussed on this thread make HD-DVD and Blu-ray uncertain prospects from the outset. So, what do you want to watch on your HDTV for the next 20 years ... 480p DVDs? :D