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You've Gotta Be Kiddin' Me

Jun 4th, 2008
Savvy strategy or seriously sour grapes?

The Internet is all abuzz about a story published in Japan’s Yomiuri Shimbun newspaper that Toshiba is about to market yet another high definition disc format. The source is said to be an unnamed individual within the company. If true, Toshiba clearly has Sony in its sights after being soundly defeated in the marketplace.

The claim is that the quality will be comparable to BD, but the format will be an extension of the DVD format. The hardware is rumored to cost $200 or less and be available by the end of the year. As you might expect, it will be backward compatible with DVD and will scale up DVD’s standard definition to 720p or 1080i/p, just like Toshiba’s HD DVD players did. I infer that this is going to be a red laser technology.

A few years ago, if you’ll recall, when hardware manufacturers and studios were in discussions about bringing HD on disc to market, some favored a red laser solution combined with the improved efficiency of advanced video CODECs, like MPEG-4 (which evolved into AVC). If I remember correctly, Warner Home Video supported that approach.

I can imagine the reasoning process at a Toshiba brainstorming session that asked the question, now that HD DVD is dead, what are we going to do now? Toshiba executives and engineers might have looked at Internet download services and deduced that there are many consumers that don’t care about quality, so physical media at lower cost that offered reduced quality in the form of low bit rate transfers might fly. And thus, another wrongheaded concept was born.

What we don’t need right now is more consumer confusion with the introduction of another competing high defintion format, particularly if it lowers the performance bar instead of raising it. Blu-ray Disc won the format war and it deserves the full support of studios and hardware manufacturers. It delivers images and sound that exceed the qualities found at the motion picture theater (more about that in my next column).

This potential incursion comes at a time when Blu-ray Disc is enjoying formidable growth. BD sales during the first third of 2008 are more than four and one half times those from the same period the year before. In fact, more BDs have been sold in the first third of 2008 than in all of 2007. Eleven million BDs have been sold since format introduction.

Admittedly, during the last week in May, overall BD sold only 7% compared to 93% for DVD. Regardless, the format’s growth is impressive. If one examines the percentage of BDs versus DVDs for individual high profile titles, one finds that the numbers can hover around 25% for Blu-ray Disc.

With high profile titles being released later this year, like Transformers on September 2nd, and the introduction of a variety of Profile 2 BD players to ease the supply and demand bottleneck, I expect BD growth to accelerate significantly during that last third of the year. The consumer research firm NPD Group determined that four million HD-ready television owners plan to buy a Blu-ray Disc player within the next six months.

Market research firm StrategyAnalytics issued a recent report entitled “Blu-ray Disc Devices: Global Market Forecast.” The company’s summary states, “Blu-ray Disc has now been confirmed as the de facto next generation optical disc standard. Our forecasts for BD players, games consoles and PCs indicate that total annual device sales will reach 57.4 million units annually by 2012. We estimate that nearly 30 million households worldwide will own at least one BD device by the end of 2008, and predict 132 million BD-owning households by 2012.”

This is no time for Toshiba or any other company to confuse consumers or increase uncertainty when a buy decision is being considered. I can only hope that the studios realize that another destructive format war will only erode sales, slow acceptance of HD on disc, and delay their abilities to sell their back catalogs in high definition.

The market has spoken. Let’s stay Blu.