Toshiba's Secret Strategy to get HD-DVD to win...  

There is no doubt that hd-dvd has the price advantage. The equipment to press out standard DVDs is
incredibly wide spread, including presses sold on Ebay (which also probally goes a long way toward
thieft). All of this will give hd-dvd an early start, plus, it has the advantage of, well, an early start.
The rest will depend on Toshiba outperforming and outmanuvering Sony at every step. Mpeg-4
faster than Sony, more layers faster.

If they do that, they could well kill BD forever, recall that VHS was inferior technology to Betamax.

However, and its a big however, Sony is going to *KILL* HD-DVD in the computer storage market[1],
that is, if HD-DVD even shows up in computer storage at all. The alternative to the HD-DVD takes
it all, and what I think is likely, is that Sony takes the computer storage market, and outperforms
the HD-DVD for capacity in all respects, layers[2] and density, while pushing prerecorded discs
as well. Then BD takes over as the "new superbit" HD-DVD later this decade.

[1] DVD-R/W and DVD+R/W fought it out with basically equal byte capacity, which won't be true in
a BD to HD-DVD matchup. Also, writeable drives don't tend to go to multiple layers as quickly,
leaving BD, again, ahead in capacity.

[2] Although Toshiba is talking about lots of layers, Sony's thiner media requirements have
an inherent advantage for any "layer war" that would come about.

[3]Most people with HDTV's that know about a format war, will wait to see which format is "better". After seeing Blu-Ray's capacity and computer storage market, consumers could flock to Blu-Ray and leave HD-DVD in the dust.

[4]As consumers who are willing to wait, actually buy their Blu-Ray players, they'll tell non-educated consumers which format is "better" and the average joe's will buy into Blu-Ray.

As far as I'm concerned, the only two advantages HD-DVD has over Blu-Ray is time-of-release and supporting studios. And the supporting studios argument is really a non-issue as, whichever format "wins", all studios will flock to (if they like making money.)

Just to put a slight dent on your theory...

There are more CE manufacturers in the BD camp than there are in the HD-DVD camp. Toshiba can outsource to Orion but other smaller companies than Sony and Panasonic would also do the same - like Samsung and LG.

I also suspect that the commoditization of HD-DVD players won't happen during the first two years. Toshiba would barely make enough money out of their own players to start battling cheap HD-DVD players from China that has everything but the name.


fuad

False. People don't care about space unless we're talking about recording. Only us video geeks care whether a DVD is 4.7GB or 8.5GB DL. Blu-Ray isn't guaranteed to win on the computer front as well. There are a few companies squawking about hi-capacity optical formats.

I will default to the real important metric and that is price. Whichever format demonstrably proves its lower TCO is going to be the fans favorites.

Thus the pregenitor of this thread is correct in saying that HD-DVD may just have an advantage should China be able to produce HD-DVD for cheap.

no it was not, it had inferior PQ but was superior in all other ways and all the other ways whas what people chose. To consumers, I am guessing, HD-DVD will have no advantage over BR and so to anyone that cares about anything (recording time, PQ, movie length, less disks where you need to get up half way through a movie to change disk.....) BR has an advantage. To the guy that goes to the store with 1000$ and says put anything in the cart HD-DVD might do. But there is no reason anyone in the store looking at BR and HD-DVD will see anything to make him say put the HD-DVD in the cart. That was not true for Beta versus VHS

even though it is more important for recording, people care. All else being equal people would rather have less disks, and would rather not be forced mid movie to get up go to the player change disk and go start it up again to see the second half.

true I bet most people (even us) know if the disk used is SL or DL, but that does not mean they don't care, read what I said above


agree, but like I said before people want Movie/PC drives, that is why CD drives became popular before CD burners were available and the same for DVD while Jaz and Zip drives did not. People want recording, but want their drives to be more. I think BR is the best for both markets (HD-DVD much much less recording and slower drives, Other optical drives are not A/V standards)

and no one knows that, many think the price will be the same, if that happens who do you think will win.

no he is not because there is no proof that Toshiba is closer to outsourcing for cheaper manufacturing.

i personally think it comes down to price. As everything else in life its all about what it cost to have a collection of something. Currently in the real world people are still using VHS. Dont believe me check your local Blockbuster and ask them about other areas. Everyone here on these forums is smarter then most people when it comes to A/V stuff. With that being said my friend who didnt know anything about BR or HD-DVD said he would get what comes out first IF ITS AT A REASONABLE PRICE. After reading about how production of HD dvds will be cheaper i think thats a major leap over anything sony does. Secondly i think Microsoft has to adopt HD in the xbox 360 i think that is key for HD to survive because personally if the PS3 plays blue ray and new games im probably going to kill 2 birds with 1 stone. Lastly i dont think Space is even a ISSUE.
Only your mega nerds are concerned with having more space. Take this into account.
Divx/Xvid is around 350 mbs for a 60 min HD show. Mpeg 2 DVD takes up the WHOLE DVD on my dads media player MCE that he records. Space isnt everything the picture quality of the Divx/Xvid is smaller and way better in PQ. With that being said i think PQ on both formats will in the end be the same and home movies will be great. Everyone here will cry but BR holds more... of my extras on the DVD. Bah i never watch those anyways.

I think mass market will be all about the price. Personally I don't think we'll see any advantages between the two in terms of picture or sound. They both will be excellent in this regard. BR will just have more space for supplements.

But if the consumer is looking at the two and doesn't see any difference in picture and sound quality between the two, but HD-DVD is cheaper, HD-DVD is going to win out. Unless of course the blind lead the blind and automatically assume the numbers reflect what is better (like the laughable DTS vs Dolby Digital arguement).

What "all other ways" might that be ? Betamax was a smaller cartidge, and better picture
quality. If you are talking capacity (hours) VHS didn't get that until later. The original "long play"
option for VHS was done by DROPPING every other frame of the video into the trash can,
a stupid pet trick that could have easily been done with Beta as well. The capacity improvements
to VHS were done as recording technology improved, and could have been used for Beta
as well. It wasn't used for Betamax because Betamax was *dead* by that time. Hard to improve
a dead product.

True. And don't forget that three (January 2006)- six months (September 2005) after Toshiba releases their less than US$1000 HD-DVD player, Sony releases their Playstation 3 for under US$500. Within this foreseeable scenario - this is the dates both camps are holding firm to - and with price being the main criteria for consumer selection - assuming that BD + HD-DVD prices won't cost more than US$5-10 - then BD has a higher chance to win.

I think right now both camps are focusing on this and perhaps in this order:

1) Get specs finalized for the media - including content protection issues.

2) Get specs finalized for first batch of players/recorders/DVRs/computer drives and burners

3) Get prototype for first batch of equipment in point 2) for marketing showcase

4) Produce equipments for point 2) in the millions

5) Fine tune marketing showcase and product release plan

6) Produce content in the millions

7) Release product

8) Get specs finalized for second generation of players/recorders


I personally believe that the key thing to do to get a foot in the doorstep to consumers is after point 2). Once you get that and you know how your players supposed to work, you can already move right along to point 7) by making hybrids of DVD+BD or DVD+HD-DVD then releasing these hybrids. Of course, these hybrids must be new releases of blockbuster films or never-before released classic films to get people to buy them and not complaining about being double-dipped.

What happens after these hybrid releases is then really up to consumers because now they're satisfied that they have the movies they wanted in DVD format. After that, they have to make a decision to buy a new HD media player that can show them what HD truly is or wait it out. Then it really comes down to the price of first generation players.


fuad

1) why do you think HD--DVD will be cheaper?
2) how can anyone do a direct comparison if studios don't release in both formats?
3) when (if) some studios do end up releasing in the other format then that means the original format they were supporting is losing ground, so a comparison is useless.
4) blindness is not seeing superiority just because it is not obvious. The simple fact that someone is not willing to realize that 50 compared to 30 can be an advantage in many circumstances, that being able to cost effectively record and record more is an advantage is what is blind

[quote] Betamax was a smaller cartidge, and better picturequality.[quote]

I am a beta fan, so don't get me wrong, I would have preferred if it won, but

smaller cartridge is cool, but for a home video player there was no advantage there (and might have been a disadvantage - look at next response) as for PQ agree 100% and said as much before

it might be a stupid trick, but at the time it did mean longer recording time, and for the person that wanted to tape their shows while they were not there it was a big advantage, especially if it was a daily show(s) and some days you might not get a chance to see it all. There is also the fact that VHS was licensed globally early on while Sony made the mistake of keeping Beta to themselves (later they did license to Hitachi and I think one or two other companies) so when you went to the store you had many more VHS models to pick from then beta and so it gave the appearance that VHS was more popular and so better.


why did Beta lose? I don't think anyone knows, and my guess is that there was not just one reason but many. The simple fact is that Beta did not lose because it had better PQ but despite of that and that there is nothing that is relevant today. The situation is very different and I think that doing those simple logic games A is to B as X is to ? is useless

Beta was better-> beta = lost, BR is better-> BR= ?
Beta was Sony -> beta = lost, BR is Sony -> BR =?


Beta was not better, it was better in some respects but not in others and it was better in stuff that consumers did not care about. BR is not Sony, there are over 100 companies in the group

we need to look at the facts in front of us today, not just say Beta lost so BR will too.


Capacity: BR>HD

quality: BR>=HD

Recording: BR>HD

cost of device to consumers: BR<=HD (my guess using PS3 as example, and a price in Yen was given that was around 340$ if I remember correctly)

cost of media: BR=HD (my guess based on the simple fact that disk reproduction cost is the least important in determining price because it is so low in % of price)

# of models: BR>HD, (guess based on announcements and companies in each camp)

Computers: BR>>HD, (writable drives, all big players - apple, Dell, HP, while Toshiba and NEC are the only ones on HD-DVDs side)

how about LG, BenQ or Phiilips?
how about the PS3?

Beta lost because Sony was too slow to license the technology to enough other companies.

I remember walking into Good Guys and seeing twenty VHS players next to three Beta players and all of the VHS players were cheaper with more features. And while the quality of VHS was inferior, it wasn't grossly inferior - it was definitely watchable. People act like VHS was equivalent to a 2-bit cash machine screen and Beta was the same as laserdiscs. The two were noticeabley different side by side, but not overwhelmingly so.

People will gravitate toward a format that they think has already become accepted as long as the quality isn't overwhelmingly inferior. They want to be part of the crowd and not buck a trend. And they definitely don't want to pay a premium to take that chance. I knew people that bought Beta - usually engineers who understood the absolute specs - and they defended their decision for years to come.


If anything that war says BluRay will win.


Beta came out first, by a few months, which gave the public a chance to see the tech and start to think about it while prices were too high to buy.

Then along came VHS which was cheaper and had many more choices

Unless Toshiba gets some more partners, there are only going to be five HD-DVD players on the shelf next to twenty BluRay's with the PS3 being the cheapest - which would you buy?


Of course the main difference between that war and this one was the initial intended use. The early adopters of tape, and second generation were soley interested in recording - prerecorded movies initially trickled out until the studios realized they had sued their cash-cow. BluRay and HD-DVD will almost soley for watching prereorded movies, especially with the advent of the PVR.

This will also come down to which has more shelves of movies people want to watch.

Remember that a company sets its prices on the basis of what the customer will pay, not on its manufacturing costs plus markup. So if there are both BR and HD-DVD disks available, they will probably be exactly the same price, assuming that the picture and sound quality are pretty comparable. There may be a little more profit for HD-DVD in the beginning, but BR will obviously match their prices for both hardware and software. So there won't be any consumer price advantage to HD-DVD. As someone pointed out, BD will almost certainly have a future in data storage, regardless of how the DVD wars play out, so it's not going away.

here is something that I think makes sense.

More manufactueres are making blu-ray players, more machines getting crated means the prices will drop.

Toshiba Sanyo, NEC, don't have to many players that will be out on the market which means that there prices will take longer to fall since the manufacturing will not be as high as blu-ray.


so the Question is how fast will the prices of blu-ray fall, to compete with HD-dvd and then when will the prices for blu-ray beat out HD-dvd.

Yes to a certain extent but it's the end user who will decide on if the price meets their value requirements. Neither Sony nor NEC/Toshiba can price their blue laser products at any price they want and hope to make sales. Sony should have learned from the beating they took on SACD. You are basing your whole arguement on presumptions that you cannot verify. It is NOT obvious that Blu-Ray will match HD-DVD or vice versa. All we have now is theoretical production costs, soon we'll truly know what these things cost and the race will be on.

(since you were talking about players) why do you think BR will be more expensive then HD-DVD initially?

we all agree BR disk production will be more expensive initially, but why players?

Well It would make sense until you look at China. If you have money you can have some production facility in China make anything you want. Producing the hardware is going to be trivial and to date very few companies have given any exclusives. Thus Samsung is eyeing how to take advantage of both as are other companies.

There's very little ways to handicap these formats. The war is nigh inevitable so we may as well sit back and enjoy the ride.

well you are right, but the simple fact is if you compete for the same dollar you try (if possible) to stay close. If HD-DVD is 1000$ for a player I don't expect the equivalent BR player to be 3000$, if it cannot compete- offer it for around 1k$ then it is dead. And vice versa. The only difference is the PS3, it needs to compete in the <500 game console world, and companies regularly subsidize consoles to make up the difference (and more) in royalties on games. To get game developers you need market share, to get market share you need games and cheap consoles. Now an HD-DVD CE company could try and compete with the PS3, but unlike the PS3 that can be sold at cost (or below cost) and still make a profit a stand alone player cannot.


As for disks, the simple fact is that if you compare replication cost to consumer price that it is almost irrelevant (i.e. disk price is decided exclusively on what you can charge, that is why the same disk starts off at 20$ and as the weeks go by the price drops steadily, it is not that manufacturing has gone down, but just that newer disks came out that cost the same to produce and the same to the customer and so less people want the older movie )

we don't even have that much. Can you tell me how much will the production of a BD cost? we know that the theoretical BD cost should be higher, will it be .10$, 1$ or 10$ higher we don't know.


PS.
I think production price is important to studios and can influence them on what tech to pick, but won't have an effect to consumers or what the final price to consumers will be, and that is what I mean by irrelevant.

but at this point there is more product announced for BR then HD-DVD, and it is supposed to come out later.

I suspect that the actual cost of producing a Blu-Ray disk will be very close to that of producing an HD-DVD disk - if you disregard the cost of the equipment. In other words, since the current DVD-producing equipment can be modified fairly cheaply to output HD-DVD disks, and the BR disk-producing hardware will have to be manufactured mostly from scratch, the outlay to studios and such will be considerably more with BR, which means that HD-DVD offers them some financial advantages in the short term. Amortized over the lifespan of the equipment, probably not a huge difference in price per unit produced.

But doesn't most of the price from DVD sales go to the studios, the manufacturers, and the sales force? Maybe somebody knows what the usual breakdown is. My guess is that if you pay $15 for a DVD, isn't the cost of producing it less than a dollar? Maybe a quarter or less? The rest goes to the studio, the distributor, the seller, and so on. If the cost of manufacturing a disk is less that a dollar, the price difference to the customer would be almost insignificant, even disregarding the fact that competition will keep the cost of a disk competitive.

I have no direct knowledge of the finances involved. These conclusions just seem logical. Please set me straight if I'm assuming facts not in evidence.

I recall several years ago when the papers made a big deal out of the cost to manufacture going
below 50 cents.

I think ya'all that's posting about this alleged format war sure are optimistic about both formats chances, IMO! I think the reality is this could be a format war over a minority market. IMO, the real format wars is just to induce more people to actually get their first HDTV set! Laserdisc's top market-share was between 2 & 3%. I'm thinkin' that HD-disc format/s share of the market could be relatively minute, about like LD's, give or take a percent, for quite some time. In audio we just saw a format war quite akin, over a minority format/market segment. Remember D-Theater? The HD-disc market might, well, must be bigger than that, but then that's not saying all that much is it? If the market for HD-disc is 10x of D-Theater, it's likely stille small, relatively?...IMO.

In my estimation the market just isn't ready for an HD format yet. Audio-vidiots like me and you, and you, and you, and you are. Outside the blinders of "forum-world", people are woefully ignorant about HD and proably don't yet own their first HD set.

A minority market war is definitely "bad idea jeans". However, Sony might get a leg up with those game consoles that might, I say might, eventually get used to actually play HD discs, someday...?

not the studios but the replication companies most (if not all) replication is outsourced, obviously that will affect their cost, but the initial investment is from the replicators

agree

yup I think Alex said around .30$, on the other I guess that might be replication cost and then you need to add the plastic box and packaging


agree have been arguing that point for ages. I think the production cost advantage of HD-DVD is a reason for studio support of that format but at the end of the day the cost to consumers will be the same 5$-10$ more according to paramount. Also BR disks are supposed to cost more to produce because new machines and new lines means that the system is not as tweaked as HD-DVD that is mostly the same as DVD, but it also means that BR's price can drop faster and more then HD-DVD and my guess is that the BR cost will be no where near original DVD cost because even though BR is different it is not that different

Rachael Bellomy: even though it is a possibility I hope you are wrong

I think the brice of Blu-ray will drop really fast based on how many manufacterers are going tho have Blu-ray drives

I agree. I do think it is going to be more than 2-3% due to the marketing and shelf space dedicated to units. But, under 10% is very likely.

Blu-Ray, as you say, could almost totally flop as a dedicated unit in the early years and the PS/3 sales alone would make a compelling market for the studios. Like UMD on PSP. If it succeeds at all on PC/CE then there is that added boost.

The hope for HD DVD seems to be based on a massive success within its first six months. If that's the plan, then it is probably going to fail. They need to have a long term strategy to build the market. A fixation on disc production costs is not a stategy to sell hardware.

Gary