Toshiba 'disappointed' over Warner Bros. decision
LAS VEGAS--"Disappointed" probably isn't a strong enough word to describe when a major focus of your business plan and the highlight of your Consumer Electronics Show pitch is derailed two days before by one of your former partners.
As the most prominent backer of the HD DVD high-definition video format, Toshiba's press conference at CES this morning drew a lot of interest among the tech press, mostly out of morbid curiosity. What could it say after Warner Bros. announced Friday it would exclusively back rival Blu-ray, after the studio had played it neutral up until now?
Toshiba didn't waste any time addressing the 800-pound gorilla in the room. President and chief executive of Toshiba America's consumer division, Akio Ozaka, took the stage to lament the studio's announcement despite strong sales of HD DVD players in the last quarter of 2007.
"Unit sales of HD DVD in Q4 were the strongest yet. Therefore we were surprised by Warner Bros. announcement that it plans to abandon HD DVD later this year," said Ozaka. "We were particularly disappointed this decision was made in spite of the momentum HD DVD has gained in this market."
Toshiba vice president of marketing for digital audio and video products Jodi Salley was even more somber.
"As you can imagine, this is a tough day for me," she said as she took the stage. "I fully expected to come here this morning to share with you the successes of the last year of HD DVD, (but) the events of the last few days have shifted the focus of my comments."
Instead of announcing a fourth-generation HD DVD player as expected prior to Warner Bros. announcement on Friday, Toshiba took the opportunity to simply reaffirm its faith in the format, and point out features like Web connectivity and the presence of Ethernet ports on every player, which Blu-ray does not have.
"It is difficult to read pundits declaring HD DVD dead...but we've been declared dead before," Sally said.
Despite that sense of optimism, she didn't offer any details on what Toshiba's next move will be.
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur. E-mail Erica.
View complete CES 2008 coverage from CNET.
Toshiba, Microsoft or other HD-DVD backer. No need to call in the
DOJ, here.
Microsoft could have ended this war a long time ago by including a HD-DVD drive on the 360. Sony's gamble by including blu-ray on the PS3 paid off.
Toshiba, Microsoft or other HD-DVD backer. No need to call in the
DOJ, here.
Microsoft could have ended this war a long time ago by including a HD-DVD drive on the 360. Sony's gamble by including blu-ray on the PS3 paid off.
Sure glad I'm not the one who put on the striped jacket, straw hat and taped my cane doing the song and dance.
--- CHAS
Sure glad I'm not the one who put on the striped jacket, straw hat and taped my cane doing the song and dance.
--- CHAS
Note: for collusion to happen, the underlying act the parties agree to must be illegal. Examples include price fixing, predatory pricing, tied-products, etc.
However, giving an incentive for a company to support a particular standard or format IS PERFECTLY LEGAL. There are no laws nor regulations which prohibits such an incentive. Therefore by itself such an act cannot be deemed anti-competitive.
Regulators tend to focus on *products* instead of *formats*. For example, it would be illegal if Blu-Ray supporters were required to buy laser diodes exclusively from Sony, or to sell their products at particular price-points, or to "divide up" the B-R market share at fixed percentages. BUT IT IS LEGAL FOR EACH OF THEM TO EXCLUSIVELY SUPPORT BLU-RAY.
Note: for collusion to happen, the underlying act the parties agree to must be illegal. Examples include price fixing, predatory pricing, tied-products, etc.
However, giving an incentive for a company to support a particular standard or format IS PERFECTLY LEGAL. There are no laws nor regulations which prohibits such an incentive. Therefore by itself such an act cannot be deemed anti-competitive.
Regulators tend to focus on *products* instead of *formats*. For example, it would be illegal if Blu-Ray supporters were required to buy laser diodes exclusively from Sony, or to sell their products at particular price-points, or to "divide up" the B-R market share at fixed percentages. BUT IT IS LEGAL FOR EACH OF THEM TO EXCLUSIVELY SUPPORT BLU-RAY.
Until they stop making regular DVD's, I'll keep living in the past - where it's a lot cheaper.
Until they stop making regular DVD's, I'll keep living in the past - where it's a lot cheaper.
Who pays these people?
Who pays these people?
1. They need to attack Blu Ray by jumping onboard the dual-format player, and NOW.
2. They need to offer a rebate system so that older HD-DVD players can upgrade for a lower cost than the retail price.
3. They need to offer a year-long price advantage to their disks to make it only 125% above the cost of a standard DVD.
4. They need to open up the entire library of movies and push those movies in the new HD-DVD format for $10 each, in $50 bundles.
Now, HD-DVD's war is not just with Blu Ray, but with the standard DVD. They need to convert us DVD people over to HD-DVD and not wait until Blu Ray becomes the defacto standard.
But it is too late now. BD vendors are already announcing players with MSRPs around $300 - which means they'll be selling for much less online - $500 MSRP players already sell for $350 or less. BD is closing the HW price gap quickly, as well as the feature gap.
Toshiba is already subsidizing their players, and always have been. Even taking on loss on HD DVD they haven't been able to win - they just can't afford to spend much more. Who's going to pay for all those promos?
Universal, Paramount, and DreamWorks Animation aren't going to pay to subsidize HD DVD. There is nothing in it for them. They could just as readily switch to Blu-ray. They don't have a real stake in the war. And authoring HD content takes time and money, so there is a limit to what they can get out this year. If they do a bad rush job and just shovel existing content on HD discs, then it will give the format a bad name and not help.
Warner's move is probably the end of the war. Expect to see Paramount and DreamWorks start releasing Blu-ray again in the coming months, followed by Universal caving in and going Blu.
1. They need to attack Blu Ray by jumping onboard the dual-format player, and NOW.
2. They need to offer a rebate system so that older HD-DVD players can upgrade for a lower cost than the retail price.
3. They need to offer a year-long price advantage to their disks to make it only 125% above the cost of a standard DVD.
4. They need to open up the entire library of movies and push those movies in the new HD-DVD format for $10 each, in $50 bundles.
Now, HD-DVD's war is not just with Blu Ray, but with the standard DVD. They need to convert us DVD people over to HD-DVD and not wait until Blu Ray becomes the defacto standard.
But it is too late now. BD vendors are already announcing players with MSRPs around $300 - which means they'll be selling for much less online - $500 MSRP players already sell for $350 or less. BD is closing the HW price gap quickly, as well as the feature gap.
Toshiba is already subsidizing their players, and always have been. Even taking on loss on HD DVD they haven't been able to win - they just can't afford to spend much more. Who's going to pay for all those promos?
Universal, Paramount, and DreamWorks Animation aren't going to pay to subsidize HD DVD. There is nothing in it for them. They could just as readily switch to Blu-ray. They don't have a real stake in the war. And authoring HD content takes time and money, so there is a limit to what they can get out this year. If they do a bad rush job and just shovel existing content on HD discs, then it will give the format a bad name and not help.
Warner's move is probably the end of the war. Expect to see Paramount and DreamWorks start releasing Blu-ray again in the coming months, followed by Universal caving in and going Blu.
I think Sony and Toshiba have been foolish. Their technologies are in competition with each, but more importantly DVD. That is not to mention downloads, IPTV, on-demand, and the PVR/DVR.
The only solution to this mess is that the Koreans step in and Samsung and LG clean up with combo-players.
However, Sony as a company is now doomed. Nothing can save its moribound consumer electronics division. They were dethroned by Samsung about 5 years ago. The beginning of the end for them was almost 20 years ago when they decided to buy a record company and a film studio.
Also if you look at the Video Games business. They had a stranglehold on the fifth generation with the Playstation. A stranglehold on the sixth generation with the Playastation 2. In the current seventh generation they have been eclipsed by the Xbox360 and Wii. The PSP is now redundant while the DS is very strong. How strong is the VAIO PC business? Also they just sold the Semi-Conductor business to Toshiba.
We don't even need to mention the failed mobile phone venture with Ericsson or the comatose MP3 Player business. Or the failed connect.com service.
In fact the former King of the CRT world is only still in the TV business because of the s-lcd Ltd venture run by archrival Samsung in Korea.
Sony has no future. Sony is in a desparate state and although I'm an Englishman, they have totally imcompenent and arrogant management in the shape of Stringer and Harrison.
Maybe if they got rid of SonyBMG, sold Sony Pictures, sold the insurance and credit card businesses in Japan and fixed their rotten CE business....
Sony has a P/E ratio of 27.01. and pays a dividend of 0.2. I prefer a P/E of 20 or lower, however for a well known consumer electronics company, a P/E of 30 is good.
I like Samsung products, however, they do not have a P/E, nor do they pay a dividend. Sony is the stronger of the two companies.
A general rule of thumb is that a company that is making money and paying a Dividend is not in trouble
I think Sony and Toshiba have been foolish. Their technologies are in competition with each, but more importantly DVD. That is not to mention downloads, IPTV, on-demand, and the PVR/DVR.
The only solution to this mess is that the Koreans step in and Samsung and LG clean up with combo-players.
However, Sony as a company is now doomed. Nothing can save its moribound consumer electronics division. They were dethroned by Samsung about 5 years ago. The beginning of the end for them was almost 20 years ago when they decided to buy a record company and a film studio.
Also if you look at the Video Games business. They had a stranglehold on the fifth generation with the Playstation. A stranglehold on the sixth generation with the Playastation 2. In the current seventh generation they have been eclipsed by the Xbox360 and Wii. The PSP is now redundant while the DS is very strong. How strong is the VAIO PC business? Also they just sold the Semi-Conductor business to Toshiba.
We don't even need to mention the failed mobile phone venture with Ericsson or the comatose MP3 Player business. Or the failed connect.com service.
In fact the former King of the CRT world is only still in the TV business because of the s-lcd Ltd venture run by archrival Samsung in Korea.
Sony has no future. Sony is in a desparate state and although I'm an Englishman, they have totally imcompenent and arrogant management in the shape of Stringer and Harrison.
Maybe if they got rid of SonyBMG, sold Sony Pictures, sold the insurance and credit card businesses in Japan and fixed their rotten CE business....
Sony has a P/E ratio of 27.01. and pays a dividend of 0.2. I prefer a P/E of 20 or lower, however for a well known consumer electronics company, a P/E of 30 is good.
I like Samsung products, however, they do not have a P/E, nor do they pay a dividend. Sony is the stronger of the two companies.
A general rule of thumb is that a company that is making money and paying a Dividend is not in trouble
I don't understand if the market was growing, why they can't continue to support BOTH formats? Why are they forcing us to go to Blu-Ray?
I've never been more upset at a company...
- I'm disappointed in Warner too
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by ericnn24
January 6, 2008 10:36 PM PST
- ...having just bought an HD DVD player during the holiday, then a few weeks later this bomb is dropped.
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Reply to this comment
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Showing 1 of 3 pages (120 Comments)I don't understand if the market was growing, why they can't continue to support BOTH formats? Why are they forcing us to go to Blu-Ray?
I've never been more upset at a company...