Looming end to DVD war good news for consumers--analysts
Agence France-Presse
First Posted 18:06:00 02/18/2008
TOKYO--The end of a format war in high-definition DVDs will reduce consumer confusion but high prices mean the new players are likely to remain a niche market for now, analysts said Monday.
In a replay of the VHS-Betamax video cassette format war in the late 1970s, Japanese high-tech giants have been battling to set the industry standard in next-generation DVDs with two rival formats that are incompatible.
Now Toshiba Corp. looks set to throw in the towel after US giant Wal-Mart dealt a heavy blow to its HD DVD technology last week, opting to exclusively stock DVDs in the Blu-ray format pushed by Sony Corp. and its partners.
Toshiba is reviewing the HD DVD business and a complete withdrawal is one option, an industry source said Monday on condition of anonymity.
"It's good for consumers, some of whom must have been resisting buying next-generation DVD recorders because of the two incompatible formats," said Hiroyuki Shimizu, an analyst at IT research company Gartner.
"If there's only one format, consumers don't have to worry about incompatibility," he said.
Toshiba's exit would be unlikely to cheer those consumers who have already bought an HD DVD player, however.
Success for Blu-ray could help restore some luster to Sony's reputation for innovation after the company that brought the world the Walkman fell behind other companies such as Apple with its iPod hit music player.
"But on the other hand, manufacturers still face a challenge to persuade people who are satisfied with conventional DVD recorders to replace them with next-generation ones," said Shimizu.
The growing popularity of viewing videos via the Internet also means that people are using their DVD players less and less, analysts said.
In some countries such as Japan and South Korea, watching television on mobile telephones is also becoming more common.
"The nature of competition is changing from the need to win the industry standard to competition with another business model," said Shimizu.
Blu-ray and HD DVD both promise cinematic-quality images and multimedia features, but the players come at a much steeper price than current-generation DVDs.
For this reason "it will take a few more years for next-generation DVDs to become popular among households," said Tsutomu Nagaoka, an official at the Japan Electronics and Information Technology Industries Association (JEITA).
"Prices for Blu-ray products are still above 100,000 yen ($850)," he noted, predicting that it would take a few more years for the prices to come down to more affordable levels for most shoppers.
There are also concerns that prices may take longer to come down if Toshiba's exit from the DVD war reduces competition.
"The drastic price cuts we've seen in the past two years, like a 30-percent price cut a year, may not continue without HD DVD manufacturers' low-price offensives," said Masahito Ichijo, a Japanese freelance technology writer.
The death of HD DVD has been heralded since January, when Hollywood titan Warner Brothers said it would only distribute high-definition DVDs in the Blu-ray format.
A study last month showed that Blu-ray, even excluding PlayStation, enjoyed a crushing 90 percent of next-generation DVD recorder sales in Japan in the last three months of 2007, although HD DVD fared somewhat better in the US.
But despite signs that an end to the format war may finally be in sight, a sales clerk at major electronics retail chain Best Denki, based in western Fukuoka, said he was not expecting any immediate rush for Blu-ray recorders.
"Most of customers who want high-quality DVD recorders are buying Blu-ray products. I don't think the news of Toshiba's withdrawal will have much impact on our sales floor," he said.
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