Below the fold on the front page of today's StarTribune is the following analysis of the war:

Technology format feud a Great DiViDe (http://www.startribune.com/535/story/1331648.html//)

It is a reasonably balanced article -- a few erroneous facts, but for a local newspaper, not too bad. As the home for Target's headquarters, I would have hoped for better insight, as the Strib should have good contacts into there. But it looks like just a restatement from the response last week.

Ken

Below the fold on the front page of today's StarTribune is the following analysis of the war:

Technology format feud a Great DiViDe (http://www.startribune.com/535/story/1331648.html//)

It is a reasonably balanced article -- a few erroneous facts, but for a local newspaper, not too bad. As the home for Target's headquarters, I would have hoped for better insight, as the Strib should have good contacts into there. But it looks like just a restatement from the response last week.

Ken

Nice article and as you described it accurately - a few error's but minor. Here is my concern:

"HD and Blu-ray will not have the impact at retail this year that the movie studios were hoping for," Saxton said.

If this holds true as a prediction, will the studios push harder for HDM next year? Or will they cut back to allow the market to grow more (pop. of players.)

I did like the speculation about Wal-Mart going HD DVD. That would be IMO "the shot heard around the world."

I did like the speculation about Wal-Mart going HD DVD.

Don't you think the BDA would throw hundreds of millions of dollars at them to prevent that from happening?

Don't you think the BDA would throw hundreds of millions of dollars at them to prevent that from happening?
No. If Walmart goes it HDDVD this year, it would not be the end of the world, just like Target having a BD endcap won't be. If Walmart has a $100-$150 player, that might be bad, but I don't really see that happening this year.

It's too bad they don't report that BD players won't have the features of HD-DVD until next year for some players and never for others - caveat emptor

I did like the speculation about Wal-Mart going HD DVD. That would be IMO "the shot heard around the world."

Here are some facts, however:
- Samsclub.com has a 'Blu ray player' category but no HD DVD player category. It sells two Blu ray players (Sony and Philips) but no HD DVD players. (Actually, from Toshiba they only carry PCs. No Toshiba electronics at all.)
- Walmart.com carries 3 players: Toshiba A2 (at $298 though), Philips and Sony (at $488). Only the Sony has a 'find in store' link (and that was also the case before they ran out of stock this morning).
- Walmart selected Sony to help it move up in electronics.

I conjecture that margins on BD players are way higher than on HD DVD players. So there are a lot more incredible deals to be created here. Selling a chinese HD DVD player at $199 when the next up Toshiba cost $229 isn't as nice a deal as selling a BD player at $249 when the next up player costs $399.

I am not suggesting that Walmart will go BD exclusive. But the current signs definitely don't suggest that they will push HD DVD.

As the biggest DVD retailer, though, they have a huge longer term stake in resolving this war. There is no reason to think that they will get a cut of the download business since they have zero competitive advantage. So if HD loses out to downloads, they may be hurt considerably.

No. If Walmart goes it HDDVD this year, it would not be the end of the world, just like Target having a BD endcap won't be. If Walmart has a $100-$150 player, that might be bad, but I don't really see that happening this year.

"end of the world" . . . :D

But it would definitely change the playing field as far as HD DVD's success. There is no comparison between the current Target announcement and an announcement that Wal-Mart will only carry HD DVD players. In the quantities they are talking about they could easily offer a $199 A2W (yep - Toshiba builds a special coded A2 for WM already). Nothing special about the player - just the model number.

So if anyone is willing to offer their opinion as to which has more weight:

1. Sony buying an endcap at Target to sell a $499 priced S300's in October.

2. Wal-Mart saying they will sell A2W's at all their stores . . . around the world (where HDTV's are sold - the preface)

Wal-Mart's gross sales for 2006 was right around $350 BILLION. #1 retailer. If you add the next three or 4 retailers (#'s 2,3,4 and 5 - they sell less combined than WM does.

So J6P wants a HDM player for Xmas . . . $199 or $399?

Well, has nobody speculated that Sony's rushing to buy up entities like Target and smaller outfits because it's "in-the-wind" that Walmart and possibly Costco are working on HD DVD deals? The hope being, they can have enough impact that these major electronics dealers don't go with primarily the most affordable format?

The thing that the most telling to me about the Target alliance is the very non-discount price of $500 for a Blu-ray player, they must know they won't fly off the shelves at Target for that price. IMO Sony really, really wants to avoid more price-war dealings with HD DVD.

Not only is Wal Mart a much larger company compared to TGT, but they have ~4x the CE marketshare, approx 16% compared to TGTs 4%.

Here are some facts, however:
- Samsclub.com has a 'Blu ray player' category but no HD DVD player category. It sells two Blu ray players (Sony and Philips) but no HD DVD players. (Actually, from Toshiba they only carry PCs. No Toshiba electronics at all.)


But some Sams Club stores have an HD-DVD display.
http://www.avsforum.com/avs-vb/showthread.php?t=853787
I dont think that what Sams does (in store or on the website) has much correlation to what WalMart decides to do.

As the biggest DVD retailer, though, they have a huge longer term stake in resolving this war. There is no reason to think that they will get a cut of the download business since they have zero competitive advantage. So if HD loses out to downloads, they may be hurt considerably.

Why wouldn't WalMart be positioned to get some of the Download business? They do music, and I am sure will do movies at some point.
http://musicdownloads.walmart.com/catalog/servlet/MainServlet

I dont see WalMart going Exclusive on way or the other. Price is their #1 concern and if one or both formats can cater to their customer base they will gladly sell them. IMO of course.

Why wouldn't WalMart be positioned to get some of the Download business? They do music, and I am sure will do movies at some point.
http://musicdownloads.walmart.com/catalog/servlet/MainServlet

I dont see WalMart going Exclusive on way or the other. Price is their #1 concern and if one or both formats can cater to their customer base they will gladly sell them. IMO of course.

Wal-Mart already gave up it's DNL business to Netflix - a partnership so to speak. If someone goes to WM to downlad a movie - it comes from NF and WM gets a cut. A smaller cut than if they did it themselves.

Wal-Mart already gave up it's DNL business to Netflix - a partnership so to speak. If someone goes to WM to downlad a movie - it comes from NF and WM gets a cut. A smaller cut than if they did it themselves.

I didn't know that, thanks.

But it does prove they are positioned get a cut. But my guess is that the DL business is not WalMarts priority. They, above all else, want you to some into the store to buy your movies so they can sell you other crap.

I have no idea what makes you think that Walmart would go more or only HD DVD. Robert Zohn has already revealed that Blu-ray players have the higher profit margin, which is in essence the only thing Walmart et al care about.

But some Sams Club stores have an HD-DVD display.
http://www.avsforum.com/avs-vb/showthread.php?t=853787
I dont think that what Sams does (in store or on the website) has much correlation to what WalMart decides to do.

Of course Sam's Club is a division of WalMart. I have no idea if they share product managers.

Back in the Spring KARE11 had a KARE Extra (http://www.kare11.com/news/news_article.aspx?storyid=143234) about the war (link includes the video)

I have no idea what makes you think that Walmart would go more or only HD DVD. Robert Zohn has already revealed that Blu-ray players have the higher profit margin, which is in essence the only thing Walmart et al care about.

What about the issue of sales versus profit per sale? If you can sell 1 million $199 priced player and make $50 each that is a $50 million dollar profit versus selling 200,000 at $399 and make $100. Thats only $20 million.

I have no idea what makes you think that Walmart would go more or only HD DVD. Robert Zohn has already revealed that Blu-ray players have the higher profit margin, which is in essence the only thing Walmart et al care about.

Wal-mart also knows what price level their customer base will goto. Wal-mart's average customer is not likely going to buy a $500 player. It is a matter of the bean counters deciding if they make more with Blu selling at low volume or will they move enough extra units of a less profitable HD DVD and make more money.

I have no idea what makes you think that Walmart would go more or only HD DVD. Robert Zohn has already revealed that Blu-ray players have the higher profit margin, which is in essence the only thing Walmart et al care about.

Who is Robert Zohn?

So, Wal Mart makes most of it's money catering to high-end consumers trying to spend $500 on a media player? They make most of their money on high-margin items?

Wow, I guess I am not looking at WMT, which has a 3.23% profit margin compared to 4.75% for TGT. What alternate universe do you live in that the demographic WMT targets isn't the most price-concious, budget seeking, generally lower earning, people on the face of the planet?

I guess that's why you see Pioneer Elite plasmas in WMT along with B&W speakers and Krell amps.

The straws that some of you people grasp at are rediculously funny.

Nice article and as you described it accurately - a few error's but minor. Here is my concern:



If this holds true as a prediction, will the studios push harder for HDM next year? Or will they cut back to allow the market to grow more (pop. of players.)

I did like the speculation about Wal-Mart going HD DVD. That would be IMO "the shot heard around the world."


It doesn't take a rocket scientist to figure out if you couple HDTV penetration with a format war, your sales are going to be lackluster...

Downloads while definitely a part of the future, I just don't see it :

1. Being the same market as optical.
2. Having infrastructure to seriously harm optical until the far future. It's just not there yet, the DRM is worse than any optical disc, and the pricing is so out of whack it isn't funny.

HD Optical will at some point be the next standard, which format is still up for debate. :P It has to be a longer term focus and I don't think we'll see serious numbers for @ least another year, maybe 2.

Who is Robert Zohn?A well-known retailer from this forum, and a staunch supporter of HD DVD.
So, Wal Mart makes most of it's money catering to high-end consumers trying to spend $500 on a media player? They make most of their money on high-margin items? Hey, if you guys are going to go on and on about how HDM is only 1% if the market, then you can't turn around and say that the big companies don't want a higher profit margin for such an infinitesimal market. Pick one.
Wow, I guess I am not looking at WMT, which has a 3.23% profit margin compared to 4.75% for TGT. What alternate universe do you live in that the demographic WMT targets isn't the most price-concious, budget seeking, generally lower earning, people on the face of the planet?Again, you're talking about necessities and established wide-market products. HDM is neither, unless you guys now want to claim that it's not just a tiny portion of the market.
The straws that some of you people grasp at are rediculously funny.And the rationalizations that you provide are much more so. What's even funnier is that these rationalizations are consistently being blown away by the real world. HD DVD's cheapness will bring more smaller studios? Wrong. HD DVD's cheapness will bring more manufacturers? Wrong. HD DVD makes production easier? Wrong. Meanwhile, Blu-ray is picking up all of those small studios, and manufacturers, and ramping up production. The only advantage HD DVD has right now is marginal price differences, web features and PiP. The first has barely kept HD DVD in the lead in standalones, the second hasn't proven to be a selling point, and the third has also not proven to be a selling point and at the same time not an advantage in 90 days.

As a BD supporter, Wal-Mart going HD DVD would be a cause for great concern. As to why they would choose HD DVD, well a lot of people have already commented on the pricing aspect. However, for some reason retailers also see a great need to differentiate themselves from their competition. Therefore, if Target goes BD, Wal-Mart may go HD DVD at least partially to be different. Granted I don't think that is the over-riding consideration, but I do think it is one.

That said, if I were the BDA I would be bending over backwards to get Wal-Mart on-board with BD. I would use Sony's relationship with Wal-Mart to introduce their HDTVs and place "knowledgeable representatives" in their stores as the springboard.

A well-known retailer from this forum, and a staunch supporter of HD DVD.
Hey, if you guys are going to go on and on about how HDM is only 1% if the market, then you can't turn around and say that the big companies don't want a higher profit margin for such an infinitesimal market. Pick one.
Again, you're talking about necessities and established wide-market products. HDM is neither, unless you guys now want to claim that it's not just a tiny portion of the market.
And the rationalizations that you provide are much more so. What's even funnier is that these rationalizations are consistently being blown away by the real world. HD DVD's cheapness will bring more smaller studios? Wrong. HD DVD's cheapness will bring more manufacturers? Wrong. HD DVD makes production easier? Wrong. Meanwhile, Blu-ray is picking up all of those small studios, and manufacturers, and ramping up production. The only advantage HD DVD has right now is marginal price differences, web features and PiP. The first has barely kept HD DVD in the lead in standalones, the second hasn't proven to be a selling point, and the third has also not proven to be a selling point and at the same time not an advantage in 90 days.

Again, it's not about "higher profit margin" for WMT, which obviously you didn't get with my post. WMD is a volume discounter, TGT is also but not nearly to the extent WMT is, considering TGT makes ~50% more profit than WMT.

WMT is about bulk. If HD-DVD hits a low enough price point that it becomes appealing to the average consumer with an HDTV, then they will certainly push it more. I have never said HDTV and HDM are anything but niche products at this time, but that's because they are limited by price. Even if HDTV is only at a 30% penetration, it is accelerating due to the lower costs of LCD tvs which are driving down everything else.

Right now HD-DVD is beating BR in all aspects of stand-alone sales, making it the volume leader which is also decreasing in price rapidly. This means it will hit the mass-market breakthrough point much faster than BR and will thus be more appealing to WMT faster.

I conjecture that margins on BD players are way higher than on HD DVD players.
Your conjecture is FALSE. The margins are the same.


... as selling a BD player at $249.
.

This player is coming into Wal-Mart on the back of a unicorn ... so I have read.

Don't you think the BDA would throw hundreds of millions of dollars at them to prevent that from happening?


The walmart thing is kinda wierd. My local elk river walmart went BD only a few weeks back. They got rid of the on HD-DVD player (HD ad-on) do to sales. Then added the S300. Also their new release section has a few BDs mixed in. So far its just been about 5 of the last months movies. But it show it could be differrent in some areas. Wether or not this walmart will switch to HD-DVD is unknown. It would be nice if they had the A2 along side the s300 just to be fair.

Haven't read the papper yet but may pick it up now..

WMT is about bulk.I have never said HDTV and HDM are anything but niche products at this time, but that's because they are limited by price.Well, then thanks for supporting my point.
Right now HD-DVD is beating BR in all aspects of stand-alone sales, making it the volume leader which is also decreasing in price rapidly.The only aspect we know that HD DVD is beating BD in for standalone sales is number of players. And that's by, what, 20000 total against a DVD market of 1.5 million monthly? Do you see now where your HDM volume arguments make you contradict yourself?
This means it will hit the mass-market breakthrough point much faster than BR and will thus be more appealing to WMT faster.Despite the fact that BD prices have dropped faster? Despite the fact that HD DVD standalones have been half the price or less of BD standalones until last month, but only managed to sell at most half-again as many players? Again, your constant harping on cherry-picked numbers from Toshiba PR still manages to contradict your arguments.

Your conjecture is FALSE. The margins are the same.Maybe you should tell that to the retailers, because that's news to them. Here's the word straight from Robert (http://forums.highdefdigest.com/showpost.php?p=215301&postcount=143):PErsonally I own 3 BD players and display every BD player in my store. I just believe HD DVD is a better solution for the general public and av enthusiasts. And my preference for HD DVD has nothing to do with profit as BD yields far more margin than HD DVD.

So, when should I expect your proof? With the unicorn?

Well, then thanks for supporting my point.
The only aspect we know that HD DVD is beating BD in for standalone sales is number of players. And that's by, what, 20000 total against a DVD market of 1.5 million monthly? Do you see now where your HDM volume arguments make you contradict yourself?
Despite the fact that BD prices have dropped faster? Despite the fact that HD DVD standalones have been half the price or less of BD standalones until last month, but only managed to sell at most half-again as many players? Again, your constant harping on cherry-picked numbers from Toshiba PR still manages to contradict your arguments.

Nobody has ever said that the HDM market was huge, how big was the DVD market 1 year after release compared to VCR? Yet, you did see Wal Mart carrying the cheapest players, at that time which were ~300. I know because my brother got into DVD in 1998 and I remember looking at a "cheap" one there.

Wal Mart sells a lot of items considered "cheap" or low-margin compared to similar items that doesn't sell a lot in volume, relatively speaking to other items. Would you compare them selling an HDTV which is marginally higher margin and lower volume to your standard tube tv that has an even lower margin and much higher volume? No, thats a non-sensical argument. They generally choose the cheapest item for their demographics because those demographics can only afford those cheaper items. This is across *ALL* product markets, from DVD to HDM. Naturally you're going to argue agaisnt this, but reality doesn't suppor you.

I guess you haven't heard of price elasticity? At this point consumer's demand for HDM is price elastic because there are plentiful replacements for HDM that are good (DVD is good, but not great). However, once the marginal cost of buying an HD-DVD player delivers significant marginal returns over DVd, you'll see it take off. It's simple price and utility economics that are the foundation of retailing.

You somehow think my points contradict my arguments, yet I fail to see where they do, except when spun by somebody like you who constantly thinks the opposite of reality.

BD Myth No. 23: That HD-DVD standalones have outsold BD standalones is irrelevant. Standalone sales are only relevant when BD outsells HD-DVD


Only a total fanboy wouldn't acknowledge that this is the case. However, according to the HD DVD PRGs own numbers, that gap is closing pretty rapidly.

Of course anything can happen but it is not like either Costco or Walmart to try to "make" a market.

They generally wait until the market has been made and people know what they want to buy, then they jump in with the low-priced solutions.

Given the current state of the marketplace, I would either expect to see these companies temporize for a while, or decide to go big with Blu-ray. Going with HD DVD--clearly behind by objective measures -- would be a very strange choice.

Nobody has ever said that the HDM market was huge, how big was the DVD market 1 year after release compared to VCR? Yet, you did see Wal Mart carrying the cheapest players, at that time which were ~300. I know because my brother got into DVD in 1998 and I remember looking at a "cheap" one there.By mid-1998, a little less than 1 year after full US launch, roughly 450,000 DVD players (3x that of HD DVD at 1 year) had been sold in the entire US, only a couple of months after prices started at $1000. DIVX was essentially dead, and had been only one chain besides, so there was no format war (VHS was not a competing format, it was last generation) to drive down price.
Wal Mart sells a lot of items considered "cheap" or low-margin compared to similar items that doesn't sell a lot in volume, relatively speaking to other items. So, considering that HD DVD doesn't sell a lot in volume, there's no incentive here. Why did you argue this again?
Would you compare them selling an HDTV which is marginally higher margin and lower volume to your standard tube tv that has an even lower margin and much higher volume? No, thats a non-sensical argument. And? They don't look at two low-volume HDTVs, choose one HDTV that's the cheapest and sell that one to exclusion of all, do they? You're arguing for how Walmart breaks out different technology at different markets, not competing versions of essentially the same market, which is the case with HD DVD and Blu-ray.
They generally choose the cheapest item for their demographics because those demographics can only afford those cheaper items. This is across *ALL* product markets, from DVD to HDM. Again, they choose several different items in those categories. When you can prove Walmart only sells the absolutely cheapest Olevia LCD TV instead of a multitude of TVs from different companies at different price points, come back to us.
Naturally you're going to argue agaisnt this, but reality doesn't suppor you.You've done nothing to prove anything but your own version of reality, here. Of course I'm going to argue my points.
I guess you haven't heard of price elasticity? At this point consumer's demand for HDM is price elastic because there are plentiful replacements for HDM that are good (DVD is good, but not great). However, once the marginal cost of buying an HD-DVD player delivers significant marginal returns over DVd, you'll see it take off. It's simple price and utility economics that are the foundation of retailing.No, it's assumptions and opinion about a business model that is only a possible outcome, and which definitely isn't happening now.
You somehow think my points contradict my arguments, yet I fail to see where they do, except when spun by somebody like you who constantly thinks the opposite of reality.When they don't directly contradict your arguments, they go off on unrelated tangents or apply incorrect models to situations. I've shown the evidence of what happens now, all you have is best-case scenarios and assumptions no one can verify.

Your conjecture is FALSE. The margins are the same.

Since you try to claim this as a fact, please provide the evidence :)
At this point, yours is no more than a conjecture that my conjecture is false.

Wow - what a quick deflection back into Walmart's potential role as retailers take sides in the format war.

I was more interested in how this portrays the current state of this fracas to those who aren't very informed, and might consider an upgrade this fall. If you had only heard bits and pieces about these formats - perhaps by seeing displays in BB or Target, what impression would you take away after reading this -- remember, front page, A section of a medium-large market newspaper.

My own sense is it would encourage people to sit on the fence.

Any other thoughts?

I have no idea what makes you think that Walmart would go more or only HD DVD. Robert Zohn has already revealed that Blu-ray players have the higher profit margin, which is in essence the only thing Walmart et al care about.BD players have higher margins.

But Duuuudddeeeee......

Wal-Mart interest in HD DVD stems from the fact that if HD DVD hardware pricing is lower than Blu-ray standalones, and it is closer or if it fits their sub $199 consumer electronics pricing model, they can make money from selling mass quantities to consumers at a smaller margin per unit.

Blu-ray higher margins per unit is an irrelevent fact if the prices are too high for most Wal-Mart customers to consider their purchase. ( Kinda like the impact of the Target endcap).

Wal-Mart will consider selling and pushing a $199 or even $299 CE device. The only thing in the electronics department $499 or above now is HDTVS for the most part.

I mean Wal-Mart is the purest example of the profitable low cost low margin high volume business. Volume is driven by consumer cost, and HD DVD is closer to that level of mass consumer adoption.

When Wal-Mart sells HD DVD or Blu-ray this fall , it will have negotiated the best margins in the industry.

BD Myth No. 23: That HD-DVD standalones have outsold BD standalones is irrelevant. Standalone sales are only relevant when BD outsells HD-DVD
Okay, if you want to say that, then I think we've got to be on HD DVD Myth No. 5,347 by now: Wal-Mart is *still* going HD DVD with those Fuh Yuan players... :rolleyes:

By mid-1998, a little less than 1 year after full US launch, roughly 450,000 DVD players (3x that of HD DVD at 1 year) And 4X what BD had at one year. What's your point?

Okay, if you want to say that, then I think we've got to be on HD DVD Myth No. 5,347 by now: Wal-Mart is *still* going HD DVD with those Fuh Yuan players... :rolleyes: You will be able to know for sure on or about the time you read the Black Friday sales inserts on November 23rd, 2007 or when you wander into your local Wal-Mart on that date. :D

It's too bad they don't report that BD players won't have the features of HD-DVD until next year for some players and never for others - caveat emptor

It's too bad they didn't point out HD-DVD will never support current features of Blu-ray (that are actually useful in the movie watching experience), like the 48mbs data rate, and seemless branching.

And 4X what BD had at one year. What's your point?

actually BD has about 1.7 million players now, so at a year they were well over 1 million. over double what dvd had. game over.

It's too bad they didn't point out HD-DVD will never support current features of Blu-ray (that are actually useful in the movie watching experience), like the 48mbs data rate, and seemless branching.

Is there a 48 mbs rate movie on BD . . which one?

actually BD has about 1.7 million players now, so at a year they were well over 1 million. over double what dvd had. game over.

Was everyone of those 1 million and 1.7 million BD players connected to an HDTV?

Is there a 48 mbs rate movie on BD . . which one?

both pirates movies, for example.

Was everyone of those 1 million and 1.7 million BD players connected to an HDTV?

was every dvd player plugged in to the wall? wtf does it matter? they are sold to consumers.

both pirates movies, for example.

Try again..ABR on those seems to be ~30MBs

was every dvd player plugged in to the wall? wtf does it matter? they are sold to consumers.

It matters because every DVD player worked with every TV. But a BD player only works with an HDTV. Just like a HD DVD player. Both functions of a HD player require an HDTV:

1. Play an HD movie
2. Upscale DVD to "near" HD PQ

Can you see where I am coming from? The accepted percentage of PS3's attached to a HDTV is right around 20% to 25%. So approx 75% to 80% of PS3 owners are not going to buy a movie on BD.

It matters because every DVD player worked with every TV. But a BD player only works with an HDTV. Just like a HD DVD player. Both functions of a HD player require an HDTV:

1. Play an HD movie
2. Upscale DVD to "near" HD PQ

Can you see where I am coming from? The accepted percentage of PS3's attached to a HDTV is right around 20% to 25%. So approx 75% to 80% of PS3 owners are not going to buy a movie on BD.

spin spin spin spin spin. numbers are numbers. game over.

Try again..ABR on those seems to be ~30MBs

but peak definitely caps out. hd-dvd could never come close to the image quality.

I dont think that what Sams does (in store or on the website) has much correlation to what WalMart decides to do.


Walmart's ability to squeeze suppliers, which is one of its key competitive advantages at this point, comes from its huge volume. Wouldn't they want to maximize that by combining Walmart and Sam's in their procurement negotiations?

Note also that the BD players that Samsclub.com carries is a nice subset of that what Walmart.com carries.

tripton,

spin spin spin spin spin. numbers are numbers. game over.

Well, actually numbers aren't necessarily numbers without a context - hence the old saying about statistics.

On the other hand, if you want to count every PS3 player as a BD player, then you have to explain the rather appaling disc sales that result from that point of view. If roughly 1.7 million players can only sell about 80k discs a month, BD is in a lot of trouble (no I am not saying HD DVD is any better shape), but you have a situation where the sales probably dont make the format viable.

And 4X what BD had at one year. What's your point?His point was that the bigger numbers would mean a price drop. Considering it took 3-4x of current players without a format war, and assuming his $300 figure is true (highly doubtful), then neither format should swing too low.

I love it. i hear on these boards all the time that wal-mart is the evil of the evilist corporate entity out there. but if they like hd-dvd then all of the sudden "wal-mart rules'. funny it is. it cares not. software drives sales blu has it, especially this coming quarter where i'm sure wal-mart wants to make a ton of money of what disney and sony have to offer. wal-mart is the biggest bully on the block but they ain't dumb.

By mid-1998, a little less than 1 year after full US launch, roughly 450,000 DVD players (3x that of HD DVD at 1 year) had been sold in the entire US, only a couple of months after prices started at $1000. DIVX was essentially dead, and had been only one chain besides, so there was no format war.

That's very interesting, can anyone remember what price the first DVD players were? If it was the same as BR player pricing or higher, I'd say that it's definite proof that the format war has been impeding adoption rates. The only caveat I can see with this line of reasoning is that you need an HDTV to enjoy the benefits of HDM, but early adopters in electronics are far more likely to own a HDTV than the general populace.

That's very interesting, can anyone remember what price the first DVD players were? If it was the same as BR player pricing or higher, I'd say that it's definite proof that the format war has been impeding adoption rates. The MSRP on the first DVD players was $1000, which was also the MSRP on the first BD players.

Jblackow,

The MSRP on the first DVD players was $1000

That is only partially true. Toshiba offered a base model at $499 (which I bought) and a step up model w/component out for either $799 or $899.

this is actually the best (most square shooting) analogy I've read about the "war" in a month of Sundays.

and more evidence that it's gonna drag on a lot longer than people want to see here.

Of course anything can happen but it is not like either Costco or Walmart to try to "make" a market.

They generally wait until the market has been made and people know what they want to buy, then they jump in with the low-priced solutions.

Given the current state of the marketplace, I would either expect to see these companies temporize for a while, or decide to go big with Blu-ray. Going with HD DVD--clearly behind by objective measures -- would be a very strange choice.
Actually, going with the lowest-priced option would be perfectly consistent with what they do all the time. They put a lot of pressure on BB and CC last Christmas by slashing prices on flat panels, and they've said they want to expand their electronics presence. Is it really unthinkable that this Christmas, they would offer a high def DVD player at a mass-consumption price, like $149?

but peak definitely caps out. hd-dvd could never come close to the image quality.

I watched DMC (since folks seem to think it is the better PQ of the 2) with the bitrate meter turned on and ignored te movie and never saw the bandwidth "capped out" (best I saw was about 38MBs). And I think you would have some argument that HD DVD could "never come close to the image quality". I would argue that myself as I own both a BD player (PS3) and several HD DVD players (A1, A2, XA2) and while I think probably Apocalypto was actually the best I have seen on either format there are many HD DVDs in my collection that are REAL close seconds (like if I had to pick an overall winner I couldn't.. I guess I just liked Apocalypto) but certainly there are many titles I own in HD DVD that are less than 2% worse image quality than the best PQ of Apocalypto. This is a far cry from "never come close" and I feel most of that is due to the filming style and color pallate of Apocalypto having so much "pop"

but peak definitely caps out. hd-dvd could never come close to the image quality.


...and how do you know this? Let's not make statements that are patently ridiculous.

That's very interesting, can anyone remember what price the first DVD players were? If it was the same as BR player pricing or higher, I'd say that it's definite proof that the format war has been impeding adoption rates.


His numbers were 450,000 DVD players the first year. If HD DVD had 1/3 that(note less than 1/3 of US homes have a HDTV) and Blu-ray 1/4 then combined that is 262,500. Which works out to 58% of DVD when only 30% of US households have HDTV for the HDM formats. So, then is adoption rate actually nearly twice that of DVD?

His numbers were 450,000 DVD players the first year. If HD DVD had 1/3 that(note less than 1/3 of US homes have a HDTV) and Blu-ray 1/4 then combined that is 262,500. Which works out to 58% of DVD when only 30% of US households have HDTV for the HDM formats. So, then is adoption rate actually nearly twice that of DVD?Thats a really good point. If you only factor in HDTV owners, it appears HDM formats aren't as slow to pickup as it would seem.

His numbers were 450,000 DVD players the first year. If HD DVD had 1/3 that(note less than 1/3 of US homes have a HDTV) and Blu-ray 1/4 then combined that is 262,500. Which works out to 58% of DVD when only 30% of US households have HDTV for the HDM formats. So, then is adoption rate actually nearly twice that of DVD?

Those numbers are for stand alone machines only? If so with PS3 you beat DVD straight up w/o consideration given to HDTV penetration.

One little "fly in the ointment" . . . .

The time period you are talking about . . .DVD was a purchase only media - no rentals available like it is today.

I love it. i hear on these boards all the time that wal-mart is the evil of the evilist corporate entity out there. but if they like hd-dvd then all of the sudden "wal-mart rules'. funny it is. it cares not. software drives sales blu has it, especially this coming quarter where i'm sure wal-mart wants to make a ton of money of what disney and sony have to offer. wal-mart is the biggest bully on the block but they ain't dumb.
Interesting point. They might sell twice as many BD disks as HD, but at $200 per HD player I'll bet they can sell a lot more than 2* a $500 player. And that will sell more HD disks.

BTW, do you visit a lot of left-wing boards?

They might sell twice as many BD disks as HD, but at $200 per HD player I'll bet they can sell a lot more than 2* a $500 player. And that will sell more HD disks.

Yes, they might sell more HDDVD players but Walmart doesn't care about units sold, they care about money made. Assuming margin percentage is the same (which I have not idea if it is or not) they would have to sell 2.5 HDDVD players to equal the profit from the sale of 1 BD player.

Yes, they might sell more HDDVD players but Walmart doesn't care about units sold, they care about money made. Assuming margin percentage is the same (which I have not idea if it is or not) they would have to sell 2.5 HDDVD players to equal the profit from the sale of 1 BD player.

Do you think with Wal-mart's customer base it would be easier for them to sell 100 $500 players or 250 $200 players?

Do you think with Wal-mart's customer base it would be easier for them to sell 100 $500 players or 250 $200 players?

I know what you're getting at and normally I would say a $200 player would definitely sell better at WalMart BUT...the fact that Wal-Mart really dove into the flat panel market last christmas and apparently has not had any problem selling hundreds of thousands of tv's >$500 makes me think they would not have a problem selling a $500 BD player. As a matter of fact, knowing Walmart they would have the manufacturer make a special "WalMart only" version of the BD player and sell it for $300 so who knows?

I know what you're getting at and normally I would say a $200 player would definitely sell better at WalMart BUT...the fact that Wal-Mart really dove into the flat panel market last christmas and apparently has not had any problem selling hundreds of thousands of tv's >$500 makes me think they would not have a problem selling a $500 BD player. As a matter of fact, knowing Walmart they would have the manufacturer make a special "WalMart only" version of the BD player and sell it for $300 so who knows?

I do not equate an HDTV to an HDM player. Two different animals. You can see HD on an HDTV without HDM - plenty available to anyone who wants it. The HDM is an "add on" - like a fancy stereo system in a new car. You are really buying the car.

Plus that $999 42" HDTV sale WM had was the "pin" in the grenade of profitable HDTV sales . . .and WM pulled the pin - and profits exploded to nothing. Sales went through the roof - and no manufacturer made any money. Some lost money. With the new law enacted on MSSP - that won't happen again.

I agree that an HDTV and a BD player are two different products but I still believe that Walmart would not have a bit of a problem selling a $500 item in their store. And I certainly don't think that they would sell greater than 2.5x as many HDDVD players.

Walmart is not the Dollar Store. Yes the do specialize in low prices but people buy EVERYTHING at Walmart. Food, furniture, electronics, books, bbq grills, sporting equipment, bicycles...

I agree that an HDTV and a BD player are two different products but I still believe that Walmart would not have a bit of a problem selling a $500 item in their store. And I certainly don't think that they would sell greater than 2.5x as many HDDVD players.

Walmart is not the Dollar Store. Yes the do specialize in low prices but people buy EVERYTHING at Walmart. Food, furniture, electronics, books, bbq grills, sporting equipment, bicycles...

How about $3000 HDTV's? Do they sell those? They sell $29, $49, $79 and $99 priced DVD players. They sell movies for $5.50.

So Joe Public is going to spend from 5X to 16X the price of a DVD player and 5X to 8X the price of a DVD . . . to see HD on a Disc? When if they have an HDTV they can get HD CBL or HD SAT with no upfront money on the latter and little if any on the former.

How about $3000 HDTV's? Do they sell those?

I don't know that. Probably not. Just like they won't sell high end pioneer BD players for $999.

They sell $29, $49, $79 and $99 priced DVD players.

Now they do yes. And before the product matured they sold dvd players for more money than that.

So Joe Public is going to spend from 5X to 16X the price of a DVD player and 5X to 8X the price of a DVD . . . to see HD on a Disc? When if they have an HDTV they can get HD CBL or HD SAT with no upfront money on the latter and little if any on the former.

Yes, just like Joe public will spend $999 on an HDTV when they could spend $150 on an SD tube televison and see the same content on sd dvd or sd cable.

*one of few Minneapolis Media on topic posts ;) *

last night I heard a promo for Toshiba HD DVD players on KFAN (an AM sports talk station). it wasn't just a commercial from Toshiba, CC, or the like, it was a recorded promo directly from one of the bigger name hosts on the station. he mentioned that he had one in his house too.

these promos are the norm, but they are usually for Subway, certain local sports bars, etc...

IMO a promo like this does MUCH better in the mindshare department, than does the Target announcement. a guy goes to Target and sees the endcap, then hears the promo the following day, realizes that BD is NOT the only game in town.

*one of few Minneapolis Media on topic posts ;) *

last night I heard a promo for Toshiba HD DVD players on KFAN (an AM sports talk station). it wasn't just a commercial from Toshiba, CC, or the like, it was a recorded promo directly from one of the bigger name hosts on the station. he mentioned that he had one in his house too.

these promos are the norm, but they are usually for Subway, certain local sports bars, etc...

IMO a promo like this does MUCH better in the mindshare department, than does the Target announcement. a guy goes to Target and sees the endcap, then hears the promo the following day, realizes that BD is NOT the only game in town.

Toshiba has been doing a lot of these personal endorsements on various radio stations in the Twin Cities. IMHO it is a very smart, effective and relatively inexpensive way to advertise for them.

Toshiba has been doing a lot of these personal endorsements on various radio stations in the Twin Cities. IMHO it is a very smart, effective and relatively inexpensive way to advertise for them.
especially during the holiday season!!!