DVS - New Media and Technologies

It's official - Blu-Ray wins.

It's official, Toshiba has thrown in the towel on HD-DVD.  From the Toshiba Japan press web site:

Toshiba Announces Discontinuation of HD DVD Businesses

19 February, 2008

Company Remains Focused on Championing Consumer Access to High Definition Content

TOKYO--Toshiba Corporation today announced that it has undertaken a thorough review of its overall strategy for HD DVD and has decided it will no longer develop, manufacture and market HD DVD players and recorders. This decision has been made following recent major changes in the market. Toshiba will continue, however, to provide full product support and after-sales service for all owners of Toshiba HD DVD products.

HD DVD was developed to offer consumers access at an affordable price to high-quality, high definition content and prepare them for the digital convergence of tomorrow where the fusion of consumer electronics and IT will continue to progress.

"We carefully assessed the long-term impact of continuing the so-called 'next-generation format war' and concluded that a swift decision will best help the market develop," said Atsutoshi Nishida, President and CEO of Toshiba Corporation. "While we are disappointed for the company and more importantly, for the consumer, the real mass market opportunity for high definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality."

Toshiba will continue to lead innovation, in a wide range of technologies that will drive mass market access to high definition content. These include high capacity NAND flash memory, small form factor hard disk drives, next generation CPUs, visual processing, and wireless and encryption technologies. The company expects to make forthcoming announcements around strategic progress in these convergence technologies.

Toshiba will begin to reduce shipments of HD DVD players and recorders to retail channels, aiming for cessation of these businesses by the end of March 2008. Toshiba also plans to end volume production of HD DVD disk drives for such applications as PCs and games in the same timeframe, yet will continue to make efforts to meet customer requirements. The company will continue to assess the position of notebook PCs with integrated HD DVD drives within the overall PC business relative to future market demand.

This decision will not impact on Toshiba's commitment to standard DVD, and the company will continue to market conventional DVD players and recorders. Toshiba intends to continue to contribute to the development of the DVD industry, as a member of the DVD Forum, an international organization with some 200 member companies, committed to the discussion and defining of optimum optical disc formats for the consumer and the related industries.

Toshiba also intends to maintain collaborative relations with the companies who joined with Toshiba in working to build up the HD DVD market, including Universal Studios, Paramount Pictures, and DreamWorks Animation and major Japanese and European content providers on the entertainment side, as well as leaders in the IT industry, including Microsoft, Intel, and HP. Toshiba will study possible collaboration with these companies for future business opportunities, utilizing the many assets generated through the development of HD DVD.

Toshiba to halt HD-DVD Production

According to a report by the Japan Broadcasting Corporation (NHK), Toshiba will halt HD-DVD production.

An unnamed source at Toshiba was quoted, "We have entered the final stage of planning to make our exit from the next generation DVD business."  He added that an official announcement could come as early as next week.

With this recent "announcement", Toshiba shares jumped 5%.  Analysts applaud Toshiba's seemingly quick decision to pull the plug on the technology because of the heavy costs involved in promoting the format.

No one could be reached for comment at Toshiba's public relations office in Tokyo.

Wal-Mart discontinuing HD-DVD Sales

And now… the end is near… for HD-DVD

The nations largest retailer, Wal*Mart, announces today that they will be discontinuing HD-DVD sales by June. “By June Wal-Mart will only be carrying Blu-Ray movies and hardware machines,” states Susan Chronister on the Wal-Mart Checkout Blog.

From the Wal-Mart Facts website:

We’ve listened to our customers, who are showing a clear preference toward Blu-ray products and movies with their purchases," said Gary Severson, senior vice president, Home Entertainment, Wal-Mart, U.S.  "With the customers best interest in all we do, we wanted to share our decision and timeline with them as soon as possible, knowing it will help simplify their purchase decision, increase selection, and increase adoption long term.  We anticipate enhancing our selection with continued great values in hi-definition Blu-ray products, so our customers can further enhance their entertainment experience at home."

Wal-Mart will continue to sell through remaining HD DVD product, but in less than 30 days customers will see a more predominant move toward Blu-ray in stores, clubs and online.  As the nation’s largest retailer, Wal-Mart thoughtfully reviewed all areas and impact in making its decision, and is excited to move forward with one format and share its future plans with customers.

One-Two Punch to HD-DVD

Today, HD-DVD got both a blow to the head and chest by Netflix and Best Buy.

First with the one-two punch, Netflix announced that after carrying both HD-DVD and Blu-Ray since 2006, they are expecting to phase out HD-DVD titles by the end of the year.

“The prolonged period of competition between the two formats has prevented clear communication to the consumer regarding the richness of the high-def experience versus standard definition,” stated Ted Sarandos, Netflix chief content officer. “We're now at the point where the industry can pursue the migration to a single format, bring clarity to the consumer and accelerate the adoption of high def. Going forward, we expect that all of the studios will publish in the Blu-ray format and that the price points of high-def DVD players will come down significantly. These factors could well lead to another decade of disc-based movie watching as the consumer's preferred means.”

Hours later, Best Buy President/COO Brian Dunn finished the combo punch by stating, “Best Buy will recommend Blu-ray as the preferred format. Our decision to shine a spotlight on Blu-ray Disc players and other Blu-ray products is a strong signal to our customers that we believe Blu-ray is the right format choice for them.”

While we at DVS are disappointed that HD-DVD isn’t able to get a foothold in the market, we are pleased that the market is moving towards a single HD format. DVS has been authoring both HD-DVD and Blu-Ray since the end of 2006.