Wed Aug 22, 2007 10:12 am

HD DVD players aren't really much cheaper than comparable Blu Ray. That is, you can find stripped down HD DVD players for cheaper than Blu Ray players, but the feature-complete players are priced comparably in both camps. This is similar to the Mac-vs-PC world: You can't buy a stripped down Mac, but when comparably equipped, the price difference erodes.

For example, almost all Blu Ray players support 1080p output, but generally only the higher end HD DVD players do. And then, you get into the same price territory as Blu Ray. I do hear that the HD DVD discs themselves are cheaper for the studios to have manufactured, but I suspect that price advantage will also erode significantly as factories and technology ramp up.

Both are currently too expensive for me to jump in, but the price advantage of HD DVD are largely elusive.

Wed Aug 22, 2007 10:27 am

HD TVs that can display 1080p are able to up convert 1080i signals to 1080p. The HD DVD group knows about this capability and take full advantage of it. So the difference between a player that says 1080i and 1080p is nothing, where as the difference between a 1080i and 1080p TV is a bit more significant.

Wed Aug 22, 2007 12:01 pm

	daemon wrote:
	HD TVs that can display 1080p are able to up convert 1080i signals to 1080p. The HD DVD group knows about this capability and take full advantage of it. So the difference between a player that says 1080i and 1080p is nothing

That is incorrect.

There is a noticeable difference in clarity--especial in scenes with motion--between a true progressive ("1080p") signal source and an interlaced ("1080i") version of the same even if the display is able interpolate ("upconvert") the interlaced signal to progressive format.

Wed Aug 22, 2007 12:23 pm

Actually sales of Blu-ray were running 3:1 over HD-DVD not too long ago. They're running 2:1 now. And that change happened during the period of time immediately following the PS3 price drop. The problem is that HD-DVD standalone players are outselling all BR players. And by that I mean dedicated BR players and the small percentage of PS3s used for BR playback. This is why the software sales are catching up. And unless BR players start to sell, eventually HD-DVD will surpass. And when that happens, studio support will start to swing even more towards HD-DVD.

That is my prediction for how this will play out and that is why I chose to invest in HD-DVD. Naturally I hope I'm right! Luckily I usually am, but we'll just have to wait and see.

Wed Aug 22, 2007 1:52 pm

	Biff wrote:
	Actually sales of Blu-ray were running 3:1 over HD-DVD not too long ago.

Source?

	Quote:
	They're running 2:1 now. And that change happened during the period of time immediately following the PS3 price drop. The problem is that HD-DVD standalone players are outselling all BR players.

Not true. The sales momentum of Blu-ray is increasing, not decreasing. In addition, sales of Blu-ray hardware continue to outpace that of HD DVD, contrary to your assertion:

http://www.ipodobserver.com/story/32615

http://arstechnica.com/news.ars/post/20070820-paramount-adopts-hd-dvd-kicks-blu-ray-to-the-curb.html

From the last link:

"The neck-and-neck race also extends to the player market, where Blu-ray has a slight lead over HD DVD players, largely thanks to the popularity of the PlayStation 3."

Wed Aug 22, 2007 2:57 pm

deasys I specifically said PS3s being used as BR players. What was that statistic? 60% of PS3 owners don't even know it plays BR? How many of the remaining 40% actually buy BR movies?

All 3 of Toshiba's standalone players are consistently in the top 25 DVD player rank on Amazon. I have seen one standalone BR player on that list and it's almost always below the low and mid range HD-DVD models. Sometimes the most expensive HD-DVD player is even ahead of it. And we're talking about the cheapest BR player here too. How about XBox 360 add-on sales? These are all dedicated players so that's 100% hit rate for HD-DVD. BR couldn't tell you how many players are being used in the real world even if they wanted to.

If you really need a good indicator of how player sales are going, try this:

http://www.tvpredictions.com/bluraysales081407.htm

Two obscure online retailers actually managed to sell more Blu-ray players than HD-DVD players! Time for a press release! Haha.

The point of all this is simple: If Sony can't get BR players out there, they can't win. It's not complicated. It's not up to the fanboys. It's up to the masses.

Wed Aug 22, 2007 5:14 pm

It's common knowledge that Sony has been subsidizing disc manufacturing costs for FOX, Disney and Lions Gate. The Blockbuster deal has not been revealed, but subsidies were definitely involved in the decision. As for the Target end-cap gimmick, there's many websites like these that revealed this fact:

http://blog.ultimateavmag.com/fredmanteghian/072707target/

http://www.tgdaily.com/content/view/33098/118

Target…has "struck a deal" with Sony to feature Blu-ray players on end-caps this coming holiday season.

Sony appears to have bought an end cap, just as HD DVD has in retail stores such as BestBuy and Circuit City.

If you want to read another view in a REAL opinion piece on this new development, try this:

http://www.tgdaily.com/content/view/33489/128/

Paramount and Dreamworks go HD-DVD: Sony’s curse continues

When you go back and look at the number of media formats Sony has tried to bring to market exclusively, the failures are daunting. They included BetaMax, Memory Stick, Universal Media Disc, Mini-Disk, Professional Disk for Data, HiFD, Music Clip and the Super Audio CD. They had one success with the 3.5” floppy drive and negotiated out of the Multi-Media Disk to create the DVD with Toshiba and Phillips. But were this a sport, they would have one early win, seven losses and a tie. If you were a fan of a team with this record you’d be well advised to switch teams. It is interesting to note, that in all losses, two things were consistently evident, they were more expensive and more restrictive than the other formats. Blu-ray is both more expensive (in terms of players) and more restrictive (you may recall that HP moved to support both formats because of the restrictions) than HD-DVD. Up until now, Blu-ray has enjoyed one clear advantage; they had more studios exclusively on their side. With this announcement, that one advantage is now significantly offset.

One of the things that really makes this interesting it that 300 set HD disk sales records by being on both formats which would suggest Paramount and Dreamworks are foregoing short term gains to solve a strategic problem (that almost never happens).

So why did Paramount and DreamWorks jump into the HD-DVD Camp? All of the studios agree that there needs to be one standard. They also know that the market for players is driven by price and that the two magic numbers are $200 and $100 for players - and if folks don’t have players they don’t buy disks. This means the first player to get below $200 will be the most likely to sell enough to finally justify the switch from standard DVD to HD, HDTVs have been selling very well so the industry knows there is a pent of demand for HD content that is not being met until either Blu-ray or HD-DVD wins. If you were to try to force Blu-ray, given its price/cost curve, you would likely see the ramp to HD content in the 2008/2009 time frame because that’s when the cost of the players will probably reach that critical $200 price point. But HD-DVD is already close and Wal-Mart is expected to have a sub-$200 HD-DVD player in the critical fourth quarter (Amazon already has one under $240). A lot of us thought the PS3 would make a difference, but sales have been lagging for that player and recent studies have indicated many buyers don’t even know the players can play Blu-ray disks. That’s an effective one-two punch that appears to have eliminated the PS3 advantage at least from Paramount’s and Dreamworks’s perspective.

The extra capacity that Blu-ray has doesn’t make any difference if folks won’t buy the players in sufficient volume to make the market and, I think, Paramount and Dreamworks have simply done the math and realize their revenues will be significantly enhanced if buyers see HD-DVD as the safest and least expensive choice during the critical fourth quarter. This doesn’t mean the market will play out this way, there is always risk and Sony is probably not going to go easy, but this appears to be the logic behind their decision.

Sony’s response - Sony has three likely responses: First, do nothing and bet Paramount, Dreamworks, and Universal are wrong. They still have Disney (arguably the most powerful), their own Studio, and Time Warner and others that are in both camps. The market may not repeat history and move on the price, and if Sony can make enough Blu-ray noise they can, as they did for much of this year, simply assure neither wins.

Second, they can respond with their own sup $200 player themselves. That would mean losing in excess of $100 on every sale and, already bleeding from the PS3, they don’t appear to have the resources to make this work and sustain acceptable profitability, but it would prevent a HD-DVD route. I doubt, however, the outcome would be much different than choice number one in the end except they would bleed red ink like a stuck pig.

Third they could abandon Blu-ray, cycle the PS3 early to bring its price in line with the Wii (which is chewing up the market anyway) and gain a price advantage over the Xbox 360 which still has the largest installed base. Problem is you can’t cycle game systems this quickly and hope to hold onto developers and, unless they had already started this, they will take a huge hit in the fourth quarter if word gets out they are on this path with the PS3.

My guess is they will go with a blend of one and two, lowering the prices for the PS3 and players by $50 to $100 and hope that is enough to hold until they can get costs in line for something more competitive. They will then go active on their successes with Movie sales and continue to muddy the water so that buyers do not conclude Blu-ray has lost and hold off buying either until Blu-Ray can be profitably sold at the target price.

Strangely enough, the success of this hinges on Disney, if Disney (who is in heavy competition with Dreamworks and Paramount) concludes as they did that HD-DVD is where the money is, they are likely to switch camps and many may not realize that Disney was actually one of the key architects for the HD-DVD platform and switched sides for political reasons. I’m not convinced the why behind that move is going to survive close scrutiny once Disney’s board starts asking about the Paramount and Dreamworks move and I would love to be in the meeting when that is discussed.

Wrapping up - The consumer electronics market is a fourth quarter market, people will likely buy the player that hits their price point. Whether it is video game systems (and the Wii is an excellent example), or this already too old DVD format battle, folk’s need to realize that it’s not the technology that wins, but it is the price and content. You need both, neither are optional. Blu-ray lost on price and now they are losing content. That is not a good trend. Given Sony’s history here, I can’t figure out why people just don’t leave the room laughing every time Sony proposes a new storage standard. While I still think it is possible we could end up with both as we did with recordable DVD formats, with major studios recasting their votes, I think the odds just shifted back in favor of HD-DVD. One interesting closing thought, since these studios compete with Sony’s studio, I wonder if the fact that this would drain Sony’s resources had anything to do with the decision?