Am I the only one who thinks this statement makes absolutely no sense:
Parsons and Sheppard said that the lower price point for HD DVD players isn't a hindrance for Blu-ray adoption, and questioned whether Toshiba has a feasible business model when players are sold at a loss.

"It's cheap, but maybe it's cheap for a reason," said Parsons. "If someone wants to spend $499 on a player, they should get a PS3."
Andy Parsons
Promotion Chair of the Blu-ray Disc Association
Senior Vice President of Pioneer
http://www.cepro.com/news/editorial/17508.html

If it's "cheap for a reason" and then for $499 you not only get a BluRay player, but also the most advanced gaming system on the planet - isn't Toshiba OVER charging for an HD-DVD player. And what does that say about $1,000 Pioneer BluRay players.

And what does that say about $1,000 Pioneer BluRay players.

What does that say about the $1,000 Sony Blu-Ray player?

~Alan

I sense more cries of arrogance coming.

When the promotion chair of the BDA promotes BD it always gets that reaction. How dare the man do his JOB.

You know, all campaign managers are all bunch of arrogant A-holes. Everyone one of them.

Gary

I agree completely. Plus, Sony's taking a $300 loss on every PS3 (from what I've read); isn't that "selling at a loss", too?

Plus, it's not rocket science why HD-DVD is "cheap for a reason". Get a lot of players into people's homes, let them see how good HD-DVD is (that it can easily hold its own against blu-ray), spread that information word-of-mouth, and by the time the mainstream public decides to go to next-gen discs (1-2 years from now, probably) the HD-DVD library will be tempting enough to take the plunge to HD-DVD vs. Blu-Ray. (FWIW, I have both formats).

Open mouth insert foot.

I agree completely. Plus, Sony's taking a $300 loss on every PS3 (from what I've read); isn't that "selling at a loss", too?


Yes. But, overall the loss is determined by recouped royalties and software revenues. There is a clear model for the PS/3. It's one that has worked for them before.

If Toshiba is selling below cost, then they are adding to the R&D deficit. When does the cost of bringing HD DVD to market start to be paid off?

Gary

Well this other CEPRo article gave another perspective.

http://www.cepro.com/news/editorial/17509.html


I do have to give it to Uncle Andy, he is smooooooth....

I swear, this is the only place I've ever been where people complain about being undercharged for items.

I swear, this is the only place I've ever been where people complain about being undercharged for items.I think it is mostly complaining that others are being undercharged. :)

--Darin

I swear, this is the only place I've ever been where people complain about being undercharged for items.

I noticed that and it is very odd.

Well this other CEPRo article gave another perspective.

http://www.cepro.com/news/editorial/17509.html


I do have to give it to Uncle Andy, he is smooooooth....

"Blu-ray is backed by Sony, Fox, Disney, Lionsgate, MGM and Buena Vista -- HD DVD is supported by New Line and segments of the porn industry. Warner Bros., Universal and Paramount are supporting both formats."

Universal is not supporting both formats....

Universal is not supporting both formats.... like I said smoooooooth...

Anyone else notice who else was involved in the Blu-Ray interview?

Bill Sheppard, senior industry manager for Digital TV at Sun Microsystems

I swear, this is the only place I've ever been where people complain about being undercharged for items.

Sure the PS3 is worth well more than what Sony charges for it. I don't mind that they've offered it at such an incredilble value at $499 for having an amazing blu-ray player, top of the line gaming console and much more packaged in it :D

"Blu-ray is backed by Sony, Fox, Disney, Lionsgate, MGM and Buena Vista -- HD DVD is supported by New Line and segments of the porn industry. Warner Bros., Universal and Paramount are supporting both formats."

Universal is not supporting both formats....And the New Line one is likely wrong also.

--Darin

"Blu-ray is backed by Sony, Fox, Disney, Lionsgate, MGM and Buena Vista -- HD DVD is supported by New Line and segments of the porn industry. Warner Bros., Universal and Paramount are supporting both formats."

Universal is not supporting both formats....

Forceflow - thanks for noticing this. It has been corrected.

Jason

Anyone else notice who else was involved in the Blu-Ray interview?

Bill Sheppard, senior industry manager for Digital TV at Sun Microsystems

Is that a prominent AVS Blu-ray insider , 2nd from the right?

http://www.cepro.com/slideshows/slide/16908.html

And the New Line one is likely wrong also.

Right... they're planning on supporting True-HD.

~Alan

Forceflow - thanks for noticing this. It has been corrected.
I think you should modify the "New Line" in there to say "Universal". It is important to list them on the HD DVD side. I wouldn't list New Line as exclusive though. You could leave them out for now and list them with Warner.

--Darin

I think you should modify the "New Line" in there to say "Universal". It is important to list them on the HD DVD side. I wouldn't list New Line as exclusive though. You could leave them out for now and list them with Warner.

--Darin

yes, I agree. New Line isn't exclusive to HD DVD.

BTW, Jason, thanks for the good news scoops. I just noticed I had a type in my sig as it read Superbowl 16 (XVI) instead of 41 (XLI)

You're reading this out of context. This may help:


http://i63.photobucket.com/albums/h123/awmurray/BaghdadBob.jpg
"It's cheap, but maybe it's cheap for a reason. If someone wants to spend $499 on a player, they should get a PS3."

yes, I agree. New Line isn't exclusive to HD DVD.

BTW, Jason, thanks for the good news scoops. I just noticed I had a type in my sig as it read Superbowl 16 (XVI) instead of 41 (XLI)

Darin, Forceflow - Thanks for the feedback. Hope you enjoy the reads!

Jason

Is that a prominent AVS Blu-ray insider , 2nd from the right?

http://www.cepro.com/slideshows/slide/16908.html
Not sure, doesn't look like the guy (second from top) here though.
http://www.digitalhollywood.com/%231-DH06Fall/DH06FlWedEight.html

"Blu-ray is backed by Sony, Fox, Disney, Lionsgate, MGM and Buena Vista -- HD DVD is supported by New Line and segments of the porn industry. Warner Bros., Universal and Paramount are supporting both formats."
...
To be fair, I just read the original interview (http://www.cepro.com/news/editorial/17508.html), there was no mentioning Universal supporting BD. The wording right now is:
"HD DVD is supported by Universal and segments of the porn industry. Warner Bros. is supporting both formats."

So unless CE Pro updated that article ?

And what does that say about $1,000 Pioneer BluRay players.

hmm what are you smoking? its $1.5K and ohh .. it doesnt decode advance audio codecs, it doesn play CDs and it has problem playing BD-J enable movie titles ...

go figure .. maybe its his age ?

The PS3 is an excellent BD player. For $499 you can't go wrong. I don't see what the big deal is that we have two topics discussing this non issue.

You're reading this out of context. This may help:


http://i63.photobucket.com/albums/h123/awmurray/BaghdadBob.jpg
"It's cheap, but maybe it's cheap for a reason. If someone wants to spend $499 on a player, they should get a PS3."

That guy looks more like the manager of the HD DVD Mobile Experience..
"It's all lies."

http://i63.photobucket.com/albums/h123/awmurray/BaghdadBob.jpg

So said David Chaplin
:)

b2b

It's Oshidi!

I'm sorry but Parson's has just used up his 9 lives. I can't read his statements without finding some huge errors.

You guys rake Amir over the coals and this guy is like a 10th of what Amir is.

You guys rake Amir over the coals and this guy is like a 10th of what Amir is.

Parsons doesn't post here.

Yes. But, overall the loss is determined by recouped royalties and software revenues. There is a clear model for the PS/3. It's one that has worked for them before.

If Toshiba is selling below cost, then they are adding to the R&D deficit. When does the cost of bringing HD DVD to market start to be paid off?

Gary



If anyone is creating a deficit to bring a format to market, it is Sony. The question should be how is Sony ever going to recoup those costs, especially with HD DVD eating up more than half of the market share?

As for the idea that the PS3 has a clear business model that has worked for them before, the PS3 is NOT the PS2. Sony killed all chances of a PS2 repeat when they stuck a Blu Ray drive into the spec.

I fail to understand how Toshiba could stand to lose more money launching HD DVD than Sony and their partners stand to lose in launching Blu Ray?

Toshiba will also make money back in royalties the same way Sony will, the only difference is that their bill will be a fraction of what Sony is looking at, and they did not kill their #1 cash cow in the process as Sony have done with the Playstation.

Ok, royalties from movie disks are waaaaaay less than videogames. Second of all, the talk about "workable business plans" for HD DVD isn't just for Toshiba, it's discussing the entire CE marketplace. Basically, Toshiba and MS are attempting to creating a market that entirely skips the initial high-margin low-volume period at the introduction of a format, which usually helps recoup development costs of new technologies. If HD DVD really gets sub-$300 players out this year (and if the format is already dead by then) you will have completely killed the interest of most CE players in this format. The lack of future proofing of the smaller disks will reduce studio interest, and you simply will never see a high definition optical disk format that is as succesful as DVD.

ottscay, can you provide the break down of how royalties compare to video games. I'm sure others would be interested in your knowledge as well.

Not sure about others but I go through a lot more movies than video games. Then again they are two different things.

Sure, see: http://www.dvd6cla.com/news_20020212.html

for specific information about DVD royalties. Basically, it was arround 7.5 cents per disk for DVD. I imagine it may bre a bit more in terms of what replicators may pay you, but it's still fractions of a dollar. There would presumably be royalties from branded players, if anyone besides Toshiba were making them right now. I don't have a source off hand, but several dollars at least per game (I think it's $10-12 per disk, although this is probably an average depending on how much help a company needs with middleware, etc). The long and short of it is videogame royalties are significantly more per disk. But from a consumer viewpoint that's only one factor in the health of a marketplace. If hardware companies can't make money, if the consumer penetration can't supply the increasing volume of sales to meet decreasing sales margines, etc, then the market is not supported and industry pushed consumers to the "next" format Which will be IPTV if Microsoft, certain telecommunication companies, etc., succeed.

Interesting read. Thank you

I agree completely. Plus, Sony's taking a $300 loss on every PS3 (from what I've read); isn't that "selling at a loss", too?

Plus, it's not rocket science why HD-DVD is "cheap for a reason". Get a lot of players into people's homes, let them see how good HD-DVD is (that it can easily hold its own against blu-ray), spread that information word-of-mouth, and by the time the mainstream public decides to go to next-gen discs (1-2 years from now, probably) the HD-DVD library will be tempting enough to take the plunge to HD-DVD vs. Blu-Ray. (FWIW, I have both formats).

Given the G2 players are obviously much less expensive to build than G1, plus the production volume on the A2 appears to be exploding past that of the G1, I consider it unlikely Toshiba is selling at a loss.

Second of all, the talk about "workable business plans" for HD DVD isn't just for Toshiba, it's discussing the entire CE marketplace. Basically, Toshiba and MS are attempting to creating a market that entirely skips the initial high-margin low-volume period at the introduction of a format, which usually helps recoup development costs of new technologies.

Why are you leaving Sony out of this equation? I think with the PS3 they confused the CE marketplace much more than Toshiba. Poor Andy Parsons, the next door neighbors kid has a game console thats a better bluray player than the shiny new Pioneer Elite in his living room.



If HD DVD really gets sub-$300 players out this year (and if the format is already dead by then) you will have completely killed the interest of most CE players in this format.

Talking about "the interest of most CE players in this format" is like talking about tall buildings in Kansas. When even Sony has no interest in making a standalone player what does that tell you?


The lack of future proofing of the smaller disks will reduce studio interest, and you simply will never see a high definition optical disk format that is as succesful as DVD.

There is no such thing as future proof. But I do agree, you simply will never see a high definition optical disk format that is as successful as DVD.

Yes. But, overall the loss is determined by recouped royalties and software revenues. There is a clear model for the PS/3. It's one that has worked for them before.

If Toshiba is selling below cost, then they are adding to the R&D deficit. When does the cost of bringing HD DVD to market start to be paid off?

Gary


I posit that the business rationale is virtually identical for both companies. As for recouping R&D deficit, I'd say that Sony's was MUCH MUCH more front-loaded for the PS3 than any of Toshiba's HD-DVD investments.

"It's cheap, but maybe it's cheap for a reason," said Parsons. "If someone wants to spend $499 on a player, they should get a PS3."[/B]
Andy Parsons
Promotion Chair of the Blu-ray Disc Association
Senior Vice President of Pioneer
http://www.cepro.com/news/editorial/17508.html



Very Simple. Andy is saying that Blu-ray does not need a cheap standalone player to be competitive because the overwhelming content-studio advantage is incentive enough for consumers to pay the more expensive Blu-ray hardware prices, and for those who can't/don't want to pay the more expensive price for Blu-ray, there is a PS3 option that directly competes with the $500 price point. He is, in effect, saying Blu-ray is "worth" more because they have the studio advantage and people will pay whatever it is they want to charge. I think if there were no such thing as HD DVD, we'd only see $1000-$1500 standalone Blu-ray players for a long time. The competition from HD DVD is helping to expedite the lowering of Blu-ray prices. The PS3 just happens to be a very odd fit as I don't think HT enthusiasts were expecting it to perform so well as a Blu-ray player, and I don't think some of the BDA companies were either. That may turn out to be the best thing that ever happened for those who want a quality standalone BD player that is priced well below $1000.

Why are you leaving Sony out of this equation? I think with the PS3 they confused the CE marketplace much more than Toshiba. Poor Andy Parsons, the next door neighbors kid has a game console thats a better bluray player than the shiny new Pioneer Elite in his living room.

Because the PS3 is aimed at a different market. First gen BD players were never going to be high-volume sales items anyways. There are lots of people (me included) who don't want to use the PS3 as their primary player, no matter how spiffy it looks, who would pay extra to get G1 standalones. THe earliest DVD players were also low-volume high-margine sales items. Now G2 players can come out in the $650-$850 range and street at around $500 before the end of summer. You could see the first "discount" and/or G3 players before next holiuday season MSRPing near the $500 price point. The PS3 is not going to come down in price. So Sony was selling a way to penetrate the market more quickly (PS3) while leaving the CE manufacturing price structure intact (BTW, despite delays, with 2 new players being shown at CES, Sony appears very interested in making players). The combination of Studio and CE support plus PS3 penetration would have HD DVD before it got off the ground, which is why very late in the game Toshiba decided to make the A1 a loss-leader product to help carve out marketshare. It was a brilliant strategy to try and keep their format alive, but not a good strategy for a healthy, sustainable hidef optical format for the next decade.

Anyone else notice who else was involved in the Blu-Ray interview?

Huh. I wonder if he knows a certain forum member who lists in his public profile that he lives in Sunnyvale (you know... near Sun Microsystems headquarters)?

Maybe they get together and play the trombone before heading of to the BDA borad meetings?

So by Parsons' Cheap for a Reason logic, the PS3 must be an absolute POS, yes? Not only does it do everything that their $1500 BD player does but it plays games too! For $499 it must be complete trash.

OK, thanks for that insight, Andy.

So by Parsons' Cheap for a Reason logic, the PS3 must be an absolute POS, yes? Not only does it do everything that their $1500 BD player does but it plays games too! For $499 it must be complete trash.

OK, thanks for that insight, Andy.
That was the point of the thread - it's nice a few people got it.

with 2 new players being shown at CES, Sony appears very interested in making players
They need to find a way to not lose money with every BD sale they make.

That was the point of the thread - it's nice a few people got it.

That was the point of the thread? That you felt that Andy Parson's was calling the A1 cheap? It's a beta-release player, to be sure, but it's built like a tank and throws an awesome picture (it only has so/so audio DACs, but sheesh, it's only $500!). It seemed obvious to me, personally, that he was indicating the low price was indicative of how much trouble the format is in (i.e. HD DVD has no other way to compete but to sell players at unprofitably low prices in order to siphon off sales from Blu ray). Whether you agree or not (I mostly do, albeit with a few caveats), I thought his reference to an unsustainable business model made it awfully clear he was saying the player is cheap because Toshiba knows how deep their hole is, not because the player is a POS.

That was the point of the thread? That you felt that Andy Parson's was calling the A1 cheap? It's a beta-release player, to be sure, but it's built like a tank and throws an awesome picture (it only has so/so audio DACs, but sheesh, it's only $500!). It seemed obvious to me, personally, that he was indicating the low price was indicative of how much trouble the format is in (i.e. HD DVD has no other way to compete but to sell players at unprofitably low prices in order to siphon off sales from Blu ray). Whether you agree or not (I mostly do, albeit with a few caveats), I thought his reference to an unsustainable business model made it awfully clear he was saying the player is cheap because Toshiba knows how deep their hole is, not because the player is a POS.

The point of the original post was that Parson's statement could be taken two ways:
1) The Toshiba A1 is a cheap POS.
In my opinion that is not what he was saying, but if he was the fact that the PS3 in not only a BluRay player AND a gaming machine would make such a statement stupid.

2) The Toshiba A1 is cheap because they are in trouble.
This is how I think he meant the statement, but once again why is the PS3 giving away a BluRay player AND a gaming machine for $499 - obviously this makes his statement stupid as well.

Basically I think Parson's made an indefensible statement - and thus everything else he says is nothing but BS.

That was the point of the thread? That you felt that Andy Parson's was calling the A1 cheap? It's a beta-release player, to be sure, but it's built like a tank and throws an awesome picture (it only has so/so audio DACs, but sheesh, it's only $500!). It seemed obvious to me, personally, that he was indicating the low price was indicative of how much trouble the format is in (i.e. HD DVD has no other way to compete but to sell players at unprofitably low prices in order to siphon off sales from Blu ray). Whether you agree or not (I mostly do, albeit with a few caveats), I thought his reference to an unsustainable business model made it awfully clear he was saying the player is cheap because Toshiba knows how deep their hole is, not because the player is a POS.

Is it a surprise that the BDA rips Toshiba in an interview for having an unsustainable business model, given that Sony has a hugely different model? Is that any different from the gloating marketing rag proclaiming BR preeminance over HD-DVD? Isn't it really all about trying to destroy consumer confidence in their competition? Why is that necessary if HD-DVD is about to collapse of it's own inadequacy anyway? I know, it's because the BDA is actually a highly altruistic organization that is just trying to assist people to preserve the value of their hard earned dollars!

Praise the Lord and THANK YOU Sony !!!

"It's cheap, but maybe it's cheap for a reason," said Parsons.

Yep, Parsons' at it again...

"CHEAP"? No, I think cheap would be if Toshiba had built stripped down players with no decoding of advanced audio codecs like DD+ and TruHD, No network ports, no compatibility with the full interactive language of the format, no ability to play CDs, poor quality upscaling of SD, no usuable on-board memory, etc , etc

Yeah, I think if Toshiba had tried to sell a stripped-down player like that for $500 they'd have had real problems! :)

What's that you say, Lassie? Someone did?! How much, girl? 1,000 dollars?! Gee whiz!

:p

Not sure, doesn't look like the guy (second from top) here though.
http://www.digitalhollywood.com/%231-DH06Fall/DH06FlWedEight.html
Hmmm, the pic matches his posts...?

:)

Because the PS3 is aimed at a different market. .

Unfortunately, no one can figure out what that market is. I've always just assumed it was the heads of the various movie studios, but that would be only 8 or 9 consoles total and they have sold more than that already.

First gen BD players were never going to be high-volume sales items anyways..

So you take this already negligible sales volume and do what? Syphon some of it away by introducing a player at half the price that also plays games.

There are lots of people (me included) who don't want to use the PS3 as their primary player, no matter how spiffy it looks, who would pay extra to get G1 standalones. .

Lots of people. But not lots and lots of people.

Yep, Parsons' at it again...

"CHEAP"? No, I think cheap would be if Toshiba had built stripped down players with no decoding of advanced audio codecs like DD+ and TruHD, No network ports, no compatibility with the full interactive language of the format, no ability to play CDs, poor quality upscaling of SD, no usuable on-board memory, etc , etc

Yeah, I think if Toshiba had tried to sell a stripped-down player like that for $500 they'd have had real problems! :)

What's that you say, Lassie? Someone did?! How much, girl? 1,000 dollars?! Gee whiz!

:p

I though the HD-DVD add-on was indeed built by toshiba, which comes out to $500 with 360 to make it work :cool:

2) The Toshiba A1 is cheap because they are in trouble.
This is how I think he meant the statement, but once again why is the PS3 giving away a BluRay player AND a gaming machine for $499 - obviously this makes his statement stupid as well.

because the PS3 is a game console and needs to compete with other game consoles. If someone built a flying car and they priced it as a premium high end luxury car would you say why isn't priced like a Boing 767? No because that is not its direct competition. As a console it is priced higher then the rest it also has better features and that justifies the higher price.

Yes the PS3 will be used for movies by many, yes some might buy it as a player but in the end its mnain competition are other game consoles.

I dont think cheap is always a good thing. Im sure Studios dont think so. I read in this forum that Batman Begins HD can be found at walmarts for 12.88. I have an unopened factory sealed King Kong Hd on Ebay with a buy it now of 13.99 that hasnt sold for 2 weeks. The fact that you can buy 90% of SDs for under 10 bucks and copy and burn them with ease isnt pleasing the studios. The dont want to just put out another format thats gonna be sitting in the 5.50 bins at walmart less than a year after the format releases. At the end of the day no studios care about us. They care about our money. If you dont agree then thats your opinion.

I though the HD-DVD add-on was indeed built by toshiba, which comes out to $500 with 360 to make it work :cool:
So you're saying people are buying a 360 to make the add-on work? :rolleyes:

No, I think cheap would be if Toshiba had built stripped down players with no decoding of advanced audio codecs like DD+ and TruHD, No network ports, no compatibility with the full interactive language of the format, no ability to play CDs, poor quality upscaling of SD, no usuable on-board memory, etc , etc

I though the HD-DVD add-on was indeed built by toshiba, which comes out to $500 with 360 to make it work :cool:
Hmm, really trying to figure out how this fits the above definition, but hey, I guess we were just supposed to laugh, right? :) Actually, one needn't be reminded that the Xbox add-on is only $199 to many, many millions of existing PC, HTPC and Xbox owners around the world :D

I'm sorry but Parson's has just used up his 9 lives. I can't read his statements without finding some huge errors.

I found one (and only one ?) of his true statements ... it has been well documented in my sig :D

"It's cheap, but maybe it's cheap for a reason," said Parsons.

You mean like this ....

Pioneer DV-341 DVD Player with remote

PRICE: $45.00

http://www.a-1vacuum.com/servlet/the-1339/Pioneer-DV-dsh-341-DVD-Player/Detail

You mean like this ....



http://www.a-1vacuum.com/servlet/the-1339/Pioneer-DV-dsh-341-DVD-Player/Detail

I can't stop laughing. :D

Thanks for the A-1 Vacuum Cleaner special.

2) The Toshiba A1 is cheap because they are in trouble.
This is how I think he meant the statement, but once again why is the PS3 giving away a BluRay player AND a gaming machine for $499 - obviously this makes his statement stupid as well.

Basically I think Parson's made an indefensible statement - and thus everything else he says is nothing but BS.

I completely agree with you that this is what Parson's meant. But the PS3 does not invalidate his claim, because the PS3 is aimed at a different market that only partially overlaps standalone paleyrs, and because it is based around a royalty-rich business plan to recoup those initial losses. The BDA really is having its cake and eating it too, because the PS3 is helping with rapid penetration of the consumer market, while not destroying the profitability of the standalone market. Toshiba had little choice but to eat the profit margins and sell a loss-leader for the first year. I doubt they are losing money any more, but they sure aren't making much.

Now, I agree that Parson's is taking his claim a bit further than the facts suggest when he implies that HD DVD is facing imminent collapse or some such because Toshiba is counter the BDAs PS3 strategy, but it is true that most raditional CE players will have little interest in the marketplace that HD DVD is creating by discounting everyhting so quickly.

Almost without exception succesful CE formats target high-rolling early adopters with low-volume, high-margin items that make it easy to recoup initial R&D costs while creating interst in the format (the high prices actually help with this, because the format becomes a status symbol). THen they grow the market by lowering prices faster than manufacturing costs drop, because the increased volume of sales offsets the decreased profit per unit.

Toshiba and (suprise!) Microsoft are essentially killing this portion of format inception, or at least they're trying to. That is why BD CE companies are (trying) to stick to their price plans, and why support from traditional CE companies has been so long in coming.

I completely agree with you that this is what Parson's meant. But the PS3 does not invalidate his claim, because the PS3 is aimed at a different market that only partially overlaps standalone paleyrs, and because it is based around a royalty-rich business plan to recoup those initial losses. The BDA really is having its cake and eating it too, because the PS3 is helping with rapid penetration of the consumer market, while not destroying the profitability of the standalone market. Toshiba had little choice but to eat the profit margins and sell a loss-leader for the first year. I doubt they are losing money any more, but they sure aren't making much.

Toshiba bit the bullet in a six month (not year) initial enthusiast launch that combined collecting valuable feedback, first-to-market, and establishing the format in one shot --> with minimum associated marketing expenditure.

This was then leveraged into a much more manufacturing cost effective high volume capable product to consolidate the already established beachhead and expand the customer bass.

This period has included the development of the tools, mechanisms, and techniques necessary to support rapid and cost effective development and their deployment. These tools seriously shortcut much of the development time and cost traditionally required by a CE to enter a new market.

Now, I agree that Parson's is taking his claim a bit further than the facts suggest when he implies that HD DVD is facing imminent collapse or some such because Toshiba is counter the BDAs PS3 strategy, but it is true that most raditional CE players will have little interest in the marketplace that HD DVD is creating by discounting everyhting so quickly.

Almost without exception succesful CE formats target high-rolling early adopters with low-volume, high-margin items that make it easy to recoup initial R&D costs while creating interst in the format (the high prices actually help with this, because the format becomes a status symbol). THen they grow the market by lowering prices faster than manufacturing costs drop, because the increased volume of sales offsets the decreased profit per unit.

Toshiba and (suprise!) Microsoft are essentially killing this portion of format inception, or at least they're trying to. That is why BD CE companies are (trying) to stick to their price plans, and why support from traditional CE companies has been so long in coming.

Given the dramatic lowering of the cost of market entry, it is not necessary for a CE to charge the traditional high prices in order to recover development costs. In effect, the CE is able to step into the market at a more stable and fully developed product stage -- hence reducing both cost and risk. In the meantime, there are plenty of potential features still on the table which could justify higher prices than the XA2 for an HD-DVD player. Just as Onkyo and Meridian will be in a position to make money, so will other CE's.

Toshiba and Microsoft are not killing anything, they are creating possibilities.