HD DVD is dead

Bowing to the inevitable - finally! - Hollywood Reporter says:The format war has turned into a format death watch.

Bowing to the inevitable - finally! - Hollywood Reporter says:

The format war has turned into a format death watch.

Toshiba is widely expected to pull the plug on its HD DVD format sometime in the coming weeks, reliable industry sources say, after a rash of retail defections that followed Warner Home Video's announcement in early January that it would support only the rival Blu-ray Disc format after May.

The marketing VP for HD DVD, Jodi Sally, says no decision has been made officially, but

Given the market developments in the past month, Toshiba will continue to study the market impact and the value proposition for consumers, particularly in light of our recent price reductions on all HD DVD players.

That's marketing speak for "we're done." Even Microsoft's HD DVD evangelist isn't returning phone calls.

Update 2:Feb 19: Toshiba announced today that it is immediately closing out the HD DVD business: ceasing production of the players and recorders and liquidating everything by the end of March. Nice upconverting DVD players AND some great HD movies for very little scratch. End update.

Update: Wal-Mart announced yesterday that it is dropping HD DVD as well. Retailers are concerned that downloading will replace buying. While I'm skeptical that will happen any time soon, some of the reviews of the new Apple TV suggest it could happen, especially as network speeds improve. End update.

Heroic resuscitation efforts Toshiba cut prices 50% on its players, bought a Superbowl spot, and - nothing happened. The best-selling Blu-ray disk moved 3x the best-selling HD DVD disk. Blu-ray accounts for 81% of HD disk sales - which themselves are a tiny fraction of declining DVD sales - and 2/3rds of HD hardware sales.

Brutal market Storage is a brutal market. People want standards and they want cheap. You get cheap from volume and you get volume from cheap, which means big upfront investments.

Sony won the volume war by putting Blu-ray in the PS3, the finest Blu-ray player available, at the enormous cost of taking the #3 position in the lucrative gaming market. MBA students will be studying this case for decades and asking "was it worth it?"

The Storage Bits take Toshiba could have saved $100 million and a lot of embarrassment if they'd quit 8 months ago as I suggested (see Blu-ray vs HD DVD: game over). Now they have no leverage with the Blu-ray group and even the dullest tech consumer knows that HD DVD is dead.

Paradoxically, as a savvy reader commented on Is Blu-ray worth it?, this is a great time to buy an HD DVD player. They reportedly work better than the buggy low-end Sony Blu-ray player I bought, upconvert standard-def DVDs beautifully and they're cheap. Plus you can expect to see firesale prices on HD DVD content, like the Bourne Ultimatum I've been jonesing for.

Movie studios are desperate to kick-start declining home video sales. Expect major Blu-ray promotions before year-end. Hey, maybe they'll even stop treating customers as downloading criminals!

Nah, even Hollywood has limits.

Comments welcome, of course. All you HD DVD advocates, can you now explain why you were so wrong 8 months ago?


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