The buzzword from HD-DVD, from the beginning, has been "affordability." But while this sounds like a great consumer benefit in press releases, what does it really mean?

Obviously, HD-DVD players are noticeably cheaper than Blu-ray players right now. And don't forget about the super-cheap Chinese HD-DVD player carrot that they have been dangling for nearly a year. (Fun FUD of The Day: With the recent track record of Chinese manufacturing, is there any guarantee that these Chinese HD-DVD players won't give you lead poisoning and kill your dog?)

As for the discs, the average Amazon price of HD-DVDs has either been the same as or higher than Blu-ray discs, so the only "affordability" in that case is for the studios. Step #1: Make discs cheaper. Step #2: Sell for the same price as (or higher than) the competition. Step #3: Profit!

But here's the thing that befuddles me the most. While pounding the "affordability" drum since day one, getting a couple month head start, AND selling players for significantly less, consumers have STILL chosen the more expensive—and later to market—option by a more than 2:1 margin.

What does this mean? Why is this happening? Could consumers be seeing the benefits beyond cost here? Is there a perception that HD-DVDs might be TOO cheap...hence the more expensive option must be of better quality? I got a C in Economics, so you guys tell me.

The answer is...Playstation 3 really.

They aren't deciding to buy the more expensive player, it's just a by product of wanting "the newest-greatest gaming console". What's that? No games? But it plays BDs? I guess I'll give those a shot.

A gaming console will get the idea of superiority out to the public at first. But eventually the SAs that are more for less will win out.

BDA campaign has just been completely confusing/mystifying the public for the past year, with inane propaganda

Hopefully the P/D announcement nullifies all previous BDA claims

Yet HD DVD's cost more than blu-ray's which are already expensive...

Prices need to come down on both sides.

Playstation 3

You cannot discount a platform(now with blu-ray!) that keeps close to 100 million strong following. At least until now, the sales compared to other gaming systems this generation are really bad.

You get what you pay for.

the thing I question about affordability is this..

as players get cheaper attach rates go where?

Toshiba and hd-dvd hope that having sub 200 dollar players early on in an hdm war will help them push media.

Yet they ignore the fact that people that will buy cheaper players will generally buy less media.

A person buying a 500 dollar player is more likely to spend another 500 dollars on media then a person that spent 200.

A person thats an early adaptor is likely to buy more media then a mainstream customer.

I'd also like to throw this out... HD-dvd fans say if not for them hdm players would still be 1000 dollars ala sony. I'd flip that on them, without sony, would toshiba care about cheap players?

Playstation 3

You cannot discount a platform(now with blu-ray!) that keeps close to 100 million strong following. At least until now, the sales compared to other gaming systems this generation are really bad.

the trojan horse did what it was supposed to do ,get a quick lead ,which in turn allowed for bda to trumpet they had won already

reality is hddvd is just getting started with their gameplan ,they knew this would happen (quick boost) why do you think they have been sitting quiet for so long before launching the counter attack

ps studio's are not looking at the disk sales #'s currently ,their looking at attach rates and projecting sale potential of formats based on player sales out 18months ,they see the magic number of 199 on hddvd shortly,they know that is the beginning pricepoint to mass adoption ,they see blu-ray with no chance of hitting those number until late 08/early 09

A person buying a 500 dollar player is more likely to spend another 500 dollars on media then a person that spent 200.
Screwed up logic, it would seem. So, a person who is willing and capable of buying a player for $500, suddenly gets one for only $200. Will they:
- buy less media because they now feel like a cheapskate?
- buy more media with that $300 they saved?

The population distribution of people who are willing/able to spend at any particular price point doesn't change just because of the player's cost. The faster the costs come down, the more people who buy them. The media that is bought is based on the person, not on the price of the player they bought.

(A standard flaw in statistical analysis is to equate correlation to cause/effect. Your argument is one of those flawed uses of stats.)

A person thats an early adaptor is likely to buy more media then a mainstream customer.
Yup - and they are still out there, whether they buy at $1000, $500 or $200. They have money that they will spend on media, and the less consumed by the player, the more for media.

So I would argue that in the aggregate, the average attach rate will be higher when player costs go down because you get more spent by early adopters in media. (In reality, I would expect that the early attach rate is more limited by the rate at which good movies come out in the format.)

I'd also like to throw this out... HD-dvd fans say if not for them hdm players would still be 1000 dollars ala sony. I'd flip that on them, without sony, would toshiba care about cheap players?
Getting to the commodity cost level was always an early strategy of the HD DVD folks. One of the reasons that some of the CE companies broke away and joined the BD camp was the worry that they wouldn't be able to make large profits on their players for several years if player competition drove costs down too fast. This has been discussed in many threads on AVS (go search on the early big threads on the Chinese HD DVD players in the HD DVD hardware forum for one case.)

So, nice try at a "flip" - but the answer would be "yes".

Facts:

1. 90+% of ALL BD players are the PS3

2. The new A3 is much cheaper to manufacturer due to less components needed to do the same thing as the A2.

http://www.cirrus.com/en/press/releases/P524.html

2A The Blue Laser Diode IC is now down to $2.60 in quantities of 10,000. How much for 500,000+?

http://rfdesign.com/rfic/atmel_atr0885_ic/

3. If Toshiba chooses to sell the A3 at $99 and lose $50 per unit on 1 million units - that's $50 million. Look what $150 million just bought!

4. HD DVD has 4 players priced at $399 or less. BD has NONE

That enough?