Sony CEO needs coaching

Yep, although it could be bollocks

 

They are. That's not belief, that's fact.

Now, while not a fact, a reasonable supposition would be that it's in Toshiba's best interest to drive prices down to mass market adaptation levels as soon as possible. This, however doesn't mean that they're bleeding money doing so. The HD DVD spec allows for comparatively simple hardware, and at this point the BOM for their bottom line players seem very cheap indeed. Have a look at the innards of the A3. Apart from the two main NEC ICs (an EMMA3 and an additional VR5701C MIPS cpu) it's basically nickel and dime stuff in there. Considering their shared history of HD DVD development, I hardly think Toshiba is paying exuberant prices for the main ICs either.

That thing is extremely cheap, and is see no reason why it should be "common knowledge that HD DVD hardware was a loss leader". Granted, the Celeron that sat in the A2 probably cost them a few dollars more than the additional MIPS unit and they're probably not very profitable when all has been said and done either. Even so, there's been no indication that this last sale was a Toshiba 'sponsored' promotion.

 

The isn't whether they are losing money on $99 or $199 players, its how good the margins are, because Toshiba just effectively drove down the price expectations for HD-DVD standalones. So what other companies want to get into the market manufacturing HD-DVD players at razor thin margins?

If I were a CE manufacturer besides some cheapshit Cyberhome chinese knockoff factory, I'd be a little concerned that the leader of the format is driving my profit margins to dust. This is way worse than Sony selling the PS3 @ $400, because 1) there's still nice margins to be had on a standalone @ $400, and 2) the PS3 isn't a standalone and there are people who prefer standalones and won't buy a PS3 just to get a BD player.

I mean, let's stop the MS/Toshiba spinfactor here. It's clear HD-DVD was in trouble, and the rapid race to the bottom and dealings with the studios (Paramount) are attempts to reverse the slide that the format was facing. Toshiba loses on studio support, so the HD-DVD game plan is to try and get Joe Sixpack to buy HD-DVD, rather than Joe "I build a freakin 120 inch screen theater in my basement" Videophile.

Whether or not this strategy works is dependent on J6P caring enough about HDTV and owning one to offset the huge base of PS3s by Johnny Gamer and high-end video philes who are not price sensitive and don't want low-end players anyway.

Only time will tell what strategy works. But to act like Toshiba isn't desparate here is to act like Sony isn't desparate to make up loss ground on the PS3 vs XB360. They are behind, and they will shit bricks to avoid HD-DVD failing. And Microsoft will be happy to lend them a hand, for many reasons, HDi, more VC-1 usage, fscking over Sony, confusion of consumer yielding opportunities for Media Center/digital downloads, etc

 

Why would a $99 player preclude a $400 player? Different customers. Before the HD formats launched they were still selling $999 DVD players even after years of cheapo $40 boxes.

Margins for who? Are there any BRD players retailing near $400 besides the BDP-S300. Actually, are there any BRD players at all selling more than a handful besides the BDP-S300.

Sure they were. In big, big trouble the day the PS3 launched. Less and less so every day since.

If you have the potential advantage in costs facing a competitive situation, why wouldn't you? I would. Look at the A3 above. A cheap unit to build and sell, yet it seems to work well enough and offer tremendous value at >$200 prices. If that's what's going to drive mass market adoption and tip the scales in their favor, I'd call it a suave move, not a desperate one.

You make "dealings with studios" sound like some nefarious clandestine activity. Seriously?

Slide? Some 100K BDP-S300s worldwide isn't going to change the fact that the Blu-ray advantage in sofware is being driven by the existence of the PS3. When it didn't deliver the knockout blow everyone (including me) was expecting, I fail to see how that's an advantage in the long term.

Make that "used to loose". In particular with Fox an MGM keeping such a low profile.

That's your cause and effect argument? Might as easily have argued that Blu-ray is banking on Joe "I play with myself and my PS3" rather than Joe "high-end". Have you got any data on the sales of higher end players to back that up?

Even cheap standalone DVD players sell DVDs. Current PS3 owners may not be very price sensitive, but that hasn't caused them to buy into BRD en masse (with the exception of the 5% that bought the thing knowing it was a HD player and planning to use it as such).

Of course they are. They're in a competitive situation with lots at stake. Just don't assume that Sony is any less so.

From where I'm standing, it seems to me that Toshiba has executed pretty spectacularly given the cards as they were dealt (can't say the same for Sony). I honestly didn't think they would.

 

Why are there so few third party HD-DVD players and many third party BD players? Think all the CE manufacturers are itching to get into a market where Toshiba is dumping players? Every other piece of CE equipment went through a lengthy early adopter phase and a slow slide of prices. It took years before cheap DVD players popped at Walmart. This lag helps fund CE equipment manufacturers through the initial stages and product revisions by making high margins with low volume. This time around, the process has been compacted, squeezing the opportunity for IHVs. Now, if you want to make money, you have to bet the farm, making a player with thin margins and selling millions of them. If your business plan contains such magic reasoning of ramping up a million plus seller while keeping costs down, prior to developing the first player model for that market, and in competition with very cheap, but good players, well, good luck.

Why does a $100 player preclude a $400 player? It doesn't, but the more the $100 player offers all or most of the features of the $400 player, the more they've commoditized the player. And once HD-DVD becomes a commodity, there is little left to differentiate onesself to sell luxury versions except for marketing and styling.

 

There are? Really. Ones that are selling? Not discontinued?

Spoiler

The Sony BDP-S300, Samsung BD-P1400, and the PS3 seems to be the only real options ATM.

Toshiba being the only big kid CE in their club, I hardly find their dominance all that surprising. They're executing the strategy they need to if they're going to have a chance to win. Blu-ray, on the other hand, held the promise of a swift decision with a quick return to the normality of an unopposed format introduction after HD DVD had been carried from the ring. Obviously inciting for the CEs.

When it didn't happen they've seemed less and less willing to invest to push any advantage for the BDA. With Toshiba not dead and pursuing low prices, what can Blu-ray do for them? They have a hard enough time competing with partner Sony, not to mention lower cost HD DVD players. At least not to the effect where it will have an impact on deciding a winner.

Turning to dual format is one possibility (LG and partially Samsung). Just staying out of it for the time being is another (Pioneer, Panasonic, (Sharp, Philips)). Given cost realities, I'm guessing that a combo is more likely to replace an Blu-ray sale than a HD-DVD sale (some of each, more of the former, and some additional sales). Also given cost realities, I'm guessing that if all players were to be combos, agnostic publishers would go with the higher margin format. Thus, Toshiba probably won't fear combos (might even welcome them), and they needed to drive some of the other CEs to the bench. This is not a weakness, rather it is what they needed to do.

You said it yourself: Toshiba aren't selling the A2/A3 line to Joe "I build a freakin 120 inch screen theater in my basement" Videophile. They do have options for him though, and once the dust settles there should be just as many of him to go around as it were while DVD reigned supreme.

PS: What is your reasoning for stating that "Toshiba is dumping players"? Commoditizing, sure, that seems to be their strategy, but "dumping"? I don't see it.

 

It's hard to take you seriously, when you stretch the limits of credibility with such spin. There are also players on the market right now from Phillips, Panasonic, Pioneer, and Sharp. And I'm not even counting LG's dual format one or second tier IHVs like Marantz (which introduced a player at CEDIA) That's 6 different IHVs (not counting LG) and some of them ship more than one SKU. At CES, Daewoo and Denon are expected to ship their players too. If you truly want to take into account all manufacturers onboard, it's atleast 10.

So not selling well removes a player from the list? Does that mean that HD-DVD had zero players when the A1/A2 were the only game in town? Oh, those were selling like hotcakes off the shelves so fast that Walmart had to unload them from inventory at $98. Fact is, overall, standalones are not selling well, nor are BD/HD media discs, it's still a tiny tiny fraction of overall CE/disc sales.

This discussion is about CE industry support, not sales. As I originally said, ask yourself why there is a huge disparity in IHV support between BD and HD-DVD.

As for availability, every player I listed is available from online retailers, and I've seen them at Frys too. The new Sharp BDHP20U is particularly impressive with very fast start times.


HD-DVD last year could have been called the "Toshiba/Universal disc player" because that's effectively what it was, almost like Circuit City's DiVX player, a single IHV standaline. The Paramount deal changed the media equation, but didn't change the IHV player support, it's still mostly Toshiba's game, whereas in the BluRay camp, there is serious support beyond just Sony players.

 

It's not spin, it's trying to make a salient point: The "CE advantage" hasn't benefited Blu-ray. Sony is selling the vast, vast majority of the total number of players and roughly half the standalones. Do you dispute this?

It would seem to me that "CE strength" doesn't matter one iota for deciding the format war now that Toshiba (the living dead according to the BDA) has driven the price down. These units are selling to your Joe "I build a freakin 120 inch screen theater in my basement" Videophile. Selling in minute numbers to begin with, and I bet even fewer now that the fight is a officially "stalemate" (if Stringer is to be believed). The lure of BRD for CEs rested on the quick win.

Tell me, as I sincerely don't understand this, "Why are there so [...] many third party BD players" and why does it matter when deciding this 'war'? You'd think that if it really was a decisive advantage it would have manifested itself by now.

 

Looks like the Blu side is still dominating:

http://www.engadgethd.com/2007/11/0...gh-def-market-share-for-week-ending-november/

 

Its not irrelevant at all.

It shows that Blu-ray is maintaining its 2:1 2007 lead over HD DVD.

Disney's blockbusters probably would have raised the Blu-ray numbers a bit higher but it doesnt render the numbers invalid. Plus the A2 sales included five free HD DVD's so I doubt many HD DVD discs were sold with that hardware.

 

With these kinds of outsell ratios week after week, I wonder what (number) install base would put the HD-DVD camp on equal footing?

 

I think Xmas will be quite important to the numbers. What players are bought and what HD-DVD's are bought for presents for others or family will show a better picture of position in the fight.

 

A larger one?

HD DVD has been clawing back a bit of share after the Paramount switch, even with clever BDA marketing strokes like BYGO deals at select stores to dampen the marketable impact of Transformers in the numbers. The average PS3 owner might not buy all that much media, but when they do it tends to be of the blockbuster variety, so it's no surprise to see Blu-ray do well on the back of Spider-Man. Behind that though, all numbers are outright pathetic for both. I'd expect the good Blu numbers to continue next time driven by Ratatouille (and to some degree Cars), but that a 'dull' week (no major releases) is roughly 60:40 at the moment.

If Toshiba keep pumping out cheap players they might regain parity, but at the same time there's a potential in all those PS3s that are hard to overcome for mindshare WRT blockbuster titles.

 

Though, with the emergence of China these periods are becoming rapidly compressed, for this and all other CE products.

How does this relate to those whom might want to produce HDDVD players but did not have to participate in its development? For them it is solely a margin game, as they have next to nothing to recoup. The quicker they can get to the point of selling large volumes of product, where they only value added features they provide are 'cosmetic' like name brand or software features, the better of they will be.

 

The numbers are much more significant in showing that HD sales aren't really picking up very much at all. Blu-ray and HD DVD are slow, neither makes a significant impact on the market at this time.

In fact I think DVD sales are still growing by more than HD sales. When DVD starts dropping off in favor of an HD format there may be something to talk about.

 

According to 'insider' posters on AVSForums it does not. Couldn't find the thread again, though as AVSForums have had a round of mass deletions and instituted a "let's talk about fluffy bunnies, not format wars"-policy.

Spoiler

Probably had to be done, as the latest developments had that place spinning rapidly out of control with a breakneck posting pace, hidden and explicit agendas, rampant flaiming, bating, trolling, and uptheen threads on the same topics. Too bad, though, that quite a lot of interesting information got lost in the process.