- The Washington Times - Wednesday, February 20, 2008

Toshiba Corp. yesterday raised the white flag in the war over the next-generation home movie format, announcing the end of its HD DVD business in a victory for Sony Corp.’s Blu-ray technology.

The move could finally jump-start a high-definition home DVD market that has been hamstrung as consumers waited on the sidelines for the battle to play out in a fight reminiscent of the VHS-Betamax videotape war of the 1980s.

Toshiba’s surrender came on the heels of a string of high-profile endorsements for Blu-ray, beginning with Warner Bros.’ jump to Sony’s camp in early January and ending with nods last week from key players Best Buy Co. Inc., Netflix Inc. and Wal-Mart Stores Inc.

Toshiba, which has sold 1 million HD DVD players since 2006, said it plans to kill the business by the end of March. About 700,000 additional HD DVD drives have been sold as computer accessories.

Consumers were quick to vent their frustrations on the Web.

“I just feel like yet again the consumer is screwed. … These people are all good hardworking [people] who now will have to buy everything again,” one user wrote on HDDVD.com.

Another added: “Waging a war where the biggest casualties were loyal consumers did no one any favors.”

Technology blog Engadget.com crafted a list of the “Top ten things to do with your now-defunct HD DVD player,” including, “Put it in a time capsule, just to confuse future generations,” and, “Lock it alone in a room with a few lethal weapons [and] let it die honorably.”

Toshiba said it would continue to service HD DVD players for the next eight years. Retailers including Amazon.com are already slashing prices on the players and DVDs to unload them as soon as possible. HD DVD players which cost Christmas shoppers $100 in November were listed for as low as $85.99 on Amazon yesterday, compared with about $250 for the lowest-priced Blu-ray Disc player.

The format war, like the VHS-Betamax struggle, had put consumers in a precarious position as Hollywood studios and electronics manufacturers began to take sides. Before Toshiba’s announcement, only two Hollywood studios had sided with HD DVD: Universal Studios Home Entertainment and Paramount Pictures. Universal Studios yesterday said it would now support Blu-ray, and Paramount is expected to make a similar announcement.

For those consumers who have been waiting on the sidelines, now might be the time to snatch up a Blu-ray player before prices creep up later this year, according to Richard Doherty of the Envisioneering Group, a market research firm.

“The [Blu-ray] players that are out there were discounted almost one-third” to help them compete with attractively priced HD DVD players in November and December, Mr. Doherty said. “So, when these are gone there may be players this summer that are higher in price and not any better.”

At the same time, he noted, consumers who are willing to pay more for players with new features might want to hold off.

Now that the format war is over, Sony can shift its attention toward innovations such as wireless Internet-equipped players.

But the increasing availability of movies online has raised questions in some corners of how viable Blu-ray might be after all.

“Digital download alternatives are available now that may mitigate the need to buy [Blu-ray] players,” said Van Baker, an analyst with Gartner Inc. “Many of these services are much more convenient than physical media, albeit lower in quality. As the format war dragged on and more consumers moved to broadband Internet service, they became aware of these alternatives.”

When it comes to high-definition movies, however, Mr. Doherty said limitations of the nation’s broadband network will prevent the Web from being a factor for some time to come.

“There isn’t enough Internet bandwidth out there to match the titles that are already out there” on Blu-ray, he said. “Maybe by 2011, by 2015.”


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