Industry Insiders Master Q&A thread IV: ONLY Questions to Insiders - Page 153  

There are 1 million customers for the format and growing. What is prudent about not selling them the high margin software they have for it? Shoot, they made space for the formats two years ago. Why did it make sense then and not now?

Look, it is fine to say HD DVD may get less shelf space. I won't argue with that if HD DVD business winds up having lower turn over. But saying that they are about to stop selling software/hardware in two quarters when their own representative clearly says otherwise, doesn't seem right to me.

Really, the grave is still warm from Warner decision and sharp HD DVD player price drop. Let's have the real selling season start again and see where that takes us and then make predictions....

It is certainly true that if items just sit collecting dust, then it would make sense to remove them. However, I do not follow your reasoning why HD DVD software should just sit and collect dust. Amazon has easily shown that the new prices are moving units, and I cannot see why that would not be the case at Best Buy as well. If units are selling, then why would they not buy software? Also, since HD DVD is the only way to get HD titles from Universal and Paramount, it seems that will attract current owners as well as all the new users attracted by the great hardware prices.

We will see what the next few months bring. The studios want HDM to succeed because of declining sales of DVD. They see this an another avenue to sell their catalog titles all over again. I have stated before, this is only my opinion.

I give retailers a lot of credit for making decisions that benefit their bottom line. If the retailers think they can have better sales (because of less customer confusion) would it not make sense to remove an obstacle in their path to better sales? This ultimately happen to Betamax, Atari, Commodore and many other products.

Don't you think it would make more sense for BBY and such to drop HD DVD for more profit by having a visual lack of any format war?
I mean most folks are waiting for a winner before buying anything and with the multiple CE companies doing BD and over 70% studio support, don't you think they would make more profit showing a clear path to HDM? To me that makes the most sense.

http://blog.hometheatermag.com/shane...er/011608para/

Check out Shane's blog and I think he sums up the way I feel. He and I talk quite a lot about this (he is my Editor).

Dave, I would like to add something to this. Mulholland, yes it appears that HD-DVD players are selling quite well on amazon, but unfortunately you are ignoring one important statistic that backs up this quote that Dave made earlier:


If you look at the software sales on amazon.com here
http://charts.highdefdigest.com/rank.aspx

You will see several things:
Only one HD-DVD title is in the Top 100 Best selling DVDs, while bluray has 11

Out of the top 10 selling HDM titles only one is HD-DVD. Damn Planet Earth has been a thorn in blurays Nielsen scores for quite a while!

Also, out of the Top 100 HD titles, 19 of them are HD-DVD, the remaining are bluray.

In short, selling the players is nice, but if we are going to use amazon as an example of how the well the players are selling, I think its fair to use it as an example of how well software is selling.

MODS, PLEASE dont delete this post. I just thought Id help Dave prove his point. Im of course assuming Dave has no problem with me saying this.

I have seen shelf space continuously grow on the Blu side while shrinking on the red side for the past few months, even before the Warner announcement.

Common sense would tell you this is going to keep happening until red is no more, unless something dramatic happens, and it really doesn't look like it will. I'm as frustrated as the next guy about this, but being on one side doesn't keep me from being realistic and looking at the whole picture.

The BDA played a very aggressive game and it paid off, while the HD DVD group played the waiting game, and when the big play came around, they dropped the ball. From the BDA we got massive BOGOS, paid endcaps, TV adds throughout the year, which still run currently, while on the HD DVD side we got what? a big Q4 push that was too late to make a difference, or even meet hardware goals, even at it's strongest, the HD DVD advertisement campaign couldn't come close to that of Blu-Ray. Obviously you can see which side is pushing their format harder.

When Paramount went exclusive, Fox immediately issued a press release announcing a barrage of tittles, press releases from the BDA etc, again they were prepared for it, they knew ahead of time and did any type of damage control that had to be done. Warner caught the HD DVD promo group by surprise, but even after the dust settled, how did they react? Lukewarm press releases, Ken Graffeo took his sweet time to release any type of statement, they announced a mediocre amount of titles, and slashed the price of hardware, not good enough, is it too soon to see the results to this? Yes, but what else is left to do? HD DVD always had the price advantage, why would it make a difference now? especially since they just lost a studio, and BD players are also dropping in price.

I still think that HD DVD had the better product out of the door, but the unwillingness from the HD DVD group to put their cards on the table and risk as much as the BDA side lost it for them. IMO securing Disney as neutral studio early last year would have been more important than keeping Warner, Disney's catalogue titles coupled with lower-priced players aimed at families would have done wonders for the format.

As for me, I'll be waiting a few months to pick up a BD player, or a good dual format one.



-To Dave or any other insider willing to answer, what do you think would take for HD DVD to get back in the game? would this even be a possibility at this point?

and,

-Why do you think the HD DVD promo group didn't try to go toe to toe with the BDA in terms of format push, of course they had a more affordable product, but IMO this wasn't enough for them to let the BDA run rampart all year long.

It seems to me that having both an economical solution such as provided by HD DVD, as well a higher margin solution which can appeal to those willing to spend more, will help the bottom line of many retailers best - since they can go after a broader range of customers. And nothing stops those who initially bought the economical solution to come back and purchase a Blu-ray player to complement their initial purchase - and providing a second sale to the retailer in the process. And such buyers will be able to buy software from both formats, additionally helping the retailers bottom line

In fact, having a low end and a high end solution to appeal to a broader spectrum of potential customers can indirectly be a benefit to HD DVD as I saw just yesterday at a local major retailer Their primary display for showcasing HD players had an HD DVD player representing the cheaper solution and the new LG Super-blu dual format player representing the upper end (and higher margins, I assume). There was not a stand-alone Blu-ray player in their primary display!

So if we are talking about bottom line and margins, it may be more appealing for retailers to push the dual format players, especially since such users can also purchase a larger selection of movies meaning even more potential profits for the retailer.

Here is another incentive Best Buy has to dump HD-DVD and this coming from a guy that know a a thing or two about retailing.

It doesn't have to make sense in that regard hence the reason I called it "hypothetical" .

He said retailers are smart and can make the decision that makes most money for them. I want to know if he really believes in their decision being always in his favor. If he only likes one outcome and not the other, then we know his assumption does not hold water.


Not at all. I personally don't know what the future holds for HD DVD. Warner decision was a big one. And the outcome could be the format's demise. Then again, they could put up a huge fight and keep it alive (which is different than "winning").

If the format stays alive, maybe it becomes like whichever game consoles achieves #3 position. Who here wants to say that BBY will dump the #3 console next quarter?


Much appreciated It is this kind of respectful discussion that keeps me interested in this forum!

Well said Merrick...

Also, using Amazon as a guage of the market as a whole is not a good way to judge sales. They move a fair volume, but nothing compared to what Best Buy does.

Amir,

If Toshiba can't move a bunch of players in a short time frame; say the next 45 days or so, then as an enthusiast, I want to see them bow out respectfully. Holding on to ruin HDM wouldn't make me happy as an enthusiast. I want to see HDM succeed and I feel that one format can do that, not two. If Warner (along with Fox) had decided the other way, I would be saying the same thing about Blu-ray right now. I never cared which side won, as long as one or the other did. I know of too many people who were sitting out the format war because they are "fringe" enthusiasts. As of this week, some have purchased players because of Warner's decision.

Is your hypothetical about just over December or the holidays or Since Inception?

I did not name the third console vendor. If you like, you can assume it is the 360 and then answer the question....

Helped relative to what? Both formats probably have given away more discs than sold! Given that, and the small market, let's wish that BBy discontinues both then .

Which is fine. I respect Dave's opinion and he may be right. For my own sake, I like to see more data. This is what I said after Warner news. Now we have one more piece of data, namely the much lower HD DVD player price. Let's see if there is more coming and effect of the action already taken.


Sorry but did you read my post? Retailers do not look at individual sales. They look at the total receipt. And HD player of either format is a substantial boost to their business. I know, I have spent a ton of time with BBY execs over the years. An HD player makes a slow moving Monster HDMI cable at $90 a fast mover. It makes the geek squad cars zoom even faster. It gets the customer to think that they NEED that power conditioner to have those pixels really shine. Yeh I am repeating myself but hoping the point is made the second time around .

I know this is your position Dave. And I appeciate where you are coming from.

I could say a lot in this regard, but I am too laze and too much in retirement mode to do so .

Respectfully, a year ago Bill Hunt also said similar things, that he felt HD DVD should bow out of the game. At the time you did not appear to agree with him. I have some journalist contacts who continue to feel that HD DVD should keep fighting, now they are in a position relative to you as you were to Bill Hunt a year ago. I can respect that you have your opinion, as I respect that Bill Hunt has his as well. My overall point to this is simply that I do not feel this forum should be an outlet for insiders to express outright opinion over respectful debate or true insider knowledge (though of course some opinion is always present in even the most cordial of debates) and of course opinions should clearly be marked as such.

Point taken. I'll refrain from my opinions....but in this case, my opinion is based upon talking with numerous people from the Inside on both the HD DVD and BD side of the aisle....for that matter, more on the HD DVD side.

Amir,

Thanks Enjoy your retirement!

Of course the analogy applies to HDM. We have an identical format war there, fighting for gaming content. Yet the world happily accepted two and now three vendors there. I wanted to know if the same standard should be applied in retailing of those products and if not, why not.

And kindly, you are being unfair here with your continued accusation . I don't work for Microsoft anymore and even when I did, I rarely got into any gaming arguments. The analogy was a hypothetical and designed to make people think. That's all.

Yeah Amir, quit posting and finish that audio test experiment you have been trying to do for the last two month or so. Another casualty of the format war

We are at our vacation house now so no testing this weekend .

But let's talk about this. I am trying to think how to run this test. The goal is to try to find out if outboard decoding is better than in player from audio fidelity point of view. Running objective test for this is a pain because I lack test tones encoded in advanced lossless codecs. If anyone knows of any (e.g. 1Khz sine wave) let me know. Otherwise, I think we are in bad shape here.

So next option is subjective listening test. To do this reliably, I need to be able to A/B quickly. This means that I need two of everything. I happen to have two Onkyo 805s. Yes, two! The HDMI port went bad in the first one! Circuit City would not do an in store exchange so I had to buy another and then return the first one. So I could fire up both units and feed one with BD-30 and the other BD-10. Have the former set to bitstream out and the latter to PCM. Then use the A/B switch in my stax amp to switch between the two 805s. I don't feel good about using two different players for this but am out of options.

Anyone can think of other ways to test this?

Using two different players is a no-no specially if you are going to share the results in this forum. I don't understand why you need two receivers. The 805 has three HDMI ports.

Thank you Dave, it has been great discussing this topic with you, I appreciate the response!

Well historically speaking how often has two competing video formats existed side by side? The only example I can think of is VHS and Laserdisc in which one was a major video format and the other was a niche video format. The game console market usually has a good amount of competing game consoles but I don't think you could directly compare it to the video format market anymore than you could compare it to the consumer OS market. After all doesn't each market have its own unique factors that affect the amount of competition in that market?

I asked about this a few pages back

I actually can't think of a consumer product that doesn't have multiple versions of it competeing with each other

Video games
MP3 players
Flash memory types (sd card , memory stick , etc)

Its only the movie busniess that doesn't have them. Actually its specificly the physical home video standard because as we see we have netflix , xbox live , apple tv and others all offering the same high def content .

I really don't see a reason why hd dvd and bluray can't co exist and both thrive . But who knows mabye we will see that change in the coming months

Sorry but what difference does it make where I post it? And what is the alternative? No testing?


Two reasons:

1. I need to level match the two. I am not hopeful that the two will be identical.

2. Switching inputs on an AVR causes muting, etc. which disrupts the analysis. Much nicer when the switching is done in analog domain where it is instantaneous.

Dave, I've always appreciated your insight and thoughts and I understand your perspective. I have a hypothetical question for you on this. If you were running Toshiba (which would put your focus on the best interests of your company and shareholders) what would you do at this point in time and why?

It would have been much more fun to be asked this question about 6 months ago!

But if I was running Toshiba right now I would be looking to sell as many players out of inventory as possible that I could (which is what they are doing) and hope that the people buying the players begin to buy software in big numbers. If they don't buy software, then I would start designing a dual format player and compete on that level to not leave my loyal HD DVD buyers behind. If it was my company and if I couldn't make a profit with HD DVD, then it would be time to dump it. They have stated that they make money on the players, but lose money on the marketing.