HomeVideo Savant Weekly Rewind: Not Buying It -- Sony CEO Says BD Will Win
Weekly Rewind: Not Buying It -- Sony CEO Says BD Will Win
Written by Video Savant
Saturday, 24 November 2007
It's not really surprising that Sony Corporation CEO Howard Stringer has publicly backpedaled from his recent comments that the HD disc format war is a "stalemate" that "doesn't mean as much as all that."
So now Stringer's out there setting things right, by saying Blu-ray has "momentum and scale" and "I think Blu-ray is just a better format."
Blah, blah, blah...
I believe Stringer's original, unsanitized comments are probably a lot closer to his true, gut feel as a businessman about the HD disc marketplace. And I think a stalemate is exactly what Toshiba is aiming to bring about through its aggressive price-cutting. The way I see it, Toshiba can't win at this point, but it can inflict plenty of damage on Sony whether it follows Toshiba downmarket on player pricing or not.
I think there's also something fundamentally untenable about a continuing stalemate. The market for a product this new generally won't function efficiently without realistic prospects for dramatic near-term growth -- businesses play the game to make money. This truth applies to all parts of the product food chain here, from the format "owners" at the top of the pile, down through the movie studios, the pressing plants, and the retailers and rental outlets. If neither format can take command of this market and accelerate the number of units moving into consumers hands, then key parts of the chain will lose interest and look for better places to invest their time and money. From there, stalemate quickly becomes defeat.
As a result, I believe that Sony and Toshiba must get together and work out a long-term HD disc alliance.
Because Sony and its Blu-ray partners have managed (so far) to maintain relatively good control over pricing, it makes the most business sense to go forward with Blu-ray as the sole HD disc format. Perhaps a case can be made for Toshiba as the surviving format, but it's hard for me to see it. Regardless, deciding how to divvy up the spoils for the "losing" camp and its partners will be difficult, and that process could easily end in tears (and no agreement).
But even more challenging will be determining what to do about the early adopters who bet on the wrong horse. I don't see the consumer side of this battle having a "no fault" end -- there's simply too much at stake in terms of PR. Both Sony and Toshiba are already spending hundreds of millions dollars in promotion of their products, including studio "incentives," hardware rebates and subsidies, and disc giveaway programs that are growing like kudzu. If a stalemate is truly a realistic prospect, millions more will have to be spent with no certainty of any eventual payback. That money can surely be put to more productive use under a united banner.
So yes, I really am suggesting a customer bailout. As crazy as that sounds, I think it makes economic sense, even though the precedent it would set would raise concerns. But if this sort of program is executed properly, it could transform obsoleted buyers feeling like chumps into reasonably reliable product advocates.
If high definition discs are going to be a popular and profitable product, then starting immediately all efforts need to be focused in expanding the installed base. If there are 1 million BD and HD DVD players out there today, the focus needs to be on how to grow that to 10 million players. And maintaining the support of consumers who have already declared for high-definition discs at home is one of the better places to start.
It's time to stop talking about who's winning and who's going to win, and to figure out what it takes to turn this disaster around. This isn't something either Sony or Toshiba can accomplish on their own, in the traditional way they've done business.
It's time to get truly creative or sit back and watch both products die.
In other home entertainment developments this week, FCC Chairman Kevin Martin continues on the receiving end of criticism for his suggestions that the agency now has expanded regulatory power of the cable TV industry, this time with senior legislators piling on... YouTube says reports last week that claimed it was planning to move to HD video are incorrect, citing Internet speed limitations and the relative lack of consumer uptake for the HD video cameras that would be needed to produce HD user-generated content... The momentum against digital rights management is growing, as UK online retailers are complaining that it's hurting sales and alienating would-be customers.
The PSX Extreme web site is reporting that existing PlayStation 3 consoles will be receiving a firmware update before the end of the year to make them compliant with the new Profile 1.1 Blu-ray specification... iSuppli reports that Vizio narrowly held the third-quarter LCD TV sales lead, with 13% market share against Samsung's 12.8%. Vizio enjoyed nearly a 3-percentage-point lead over the second-place LCD seller during the previous quarter...
Video Savant 
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