Welcome to our new Blu-ray Overlords
Welcome to our new Blu-ray Overlords
March/April Edition, 2008: Dust is settling on the HD DVD battlefront, the white flag has been flown and the fat lady has sung her due. While the celebration may still be going on in the Sony Blu-ray camp, what really happens in the high definition optical market now that the great format war is officially over?
The news of Toshiba’s surrender comes as no real surprise to many industry watchers, particularly as the script for HD DVD’s death throes was being written by the numerous Blu-Ray exclusive deals with retailers and movie distributors that Sony was able to make.
The most crippling blow to the HD DVD camp landed right before the Consumer Electronics Show in January, when one of the worlds biggest movie distributors, Warner Brothers announced they were ceasing production of HD DVD titles and going Blu-ray exclusive.
Toshiba’s troubles didn’t end there as major US retailers such as Blockbuster, Netflix and Wal-Mart announced they too were going Blu-Ray exclusive. This came as the final nail the coffin as Sony’s backroom deals finally took their toll on the Tokyo based company.
Things didn’t completely go Blu-ray’s way, with several stubborn production companies sticking with its rival format and alarm bells being rung when the Adult Entertainment industry opted to go with HD DVD. In the end though, the sheer number of production and distribution contracts that Sony was landing for its format was far too heavy a weight to shrug off.
Paul O’Donovan, principal research analyst at Gartner believes that the announcement from Toshiba will be welcomed by many in the industry as, “now everyone can focus on creating content and equipment for the pent-up demand for high-definition video in the consumer market,” he said.
This is good news for consumers, studios and equipment manufacturers as according to O’Donovan, the competition will really begin now that the battle is over. The victory no doubt tastes all the sweeter for Sony who very publicly lost the format war to become the video tape standard, with JVC’s VHS beating out their Betamax technology, in the 1980’s.
Carl Gresum, Senior Analyst at Ovum believes the main question that should be asked now is what impact this will have on Toshiba as an electronics company. With the exit from the next generation DVD market comes the potential for losses in the hundreds of millions, as well as a major reshuffle of the company’s direction.
“This once again shows why incompatible and mutually exclusive formats should be avoided at all cost by the industry. It reduces profitability and delays customer adoption,” says Gresum. “Toshiba is now stuck between a rock and a hard place, and HD DVD will be a big and nasty sword for the Japanese electronics company to fall on.” By Nathan Statz.