HD DVD Rallies Consumer Audience in 2007 Driving Nearly One Million Dedicated Player Sales in North America

[pmalter0]

David: Thanks for the invitation; but, I firmly believe that the only effective petition would be one that has the name of a court at the top.

Akirby: HD DVD is so much more an efficient technology that it is hard to say which is sold at a loss -- a $150 HD DVD, or a $300 BR. I have heard that Sony also loses a great deal on the PS3. But all this is anecdotal, and must be taken with quite a few grains of salt. Selling at a loss becomes unlawful predatory pricing only where it is done so in order to advance a monopoly or restrain trade. Hence, assuming arguendo that Toshiba has sold at a loss, is not likely to be unlawful. In contrast, however, I believe that the latest Warner/Sony deal is clearly an antitrust violation. In one of my earlier posts, I noted that there are many reasons why Toshiba might be hesitant to sue; unfortunately, one of them is that Toshiba has engaged in some similar shenanigans. Although I believe that there are legally significant differences (the biggest -- Warner's admission of its intent to put HD DVD out of business), it might mean that the best party to sue would be an independent HD DVD disc manufacturer (this then opens up the question of whether the disc manufacturer would have sufficient financial resources to attempt such major litigation). If you have been waiting to avoid purchasing an orphaned or obsolete technology, wait a little longer; and if no one files an antitrust suit, your best bet is to plan on downloading your HD movies in a couple of years.

Dale: Just about all the opinions of others you cite, are at best, just opinions, at worse clearly self-serving BS. I tried to explain this to you above, in criticizing your quotes of the BR disc manufacturer. You cite Warner's "absolute" denial of being paid by Sony and the "great deal of laughter from all the insiders" as if this were convincing evidence. I hope the fact that the denial was a lie will cause you to rely less in the future on the unsupported allegations of interested parties and presumed infallibility of industry "insiders."

Phil

[Dale]

When there is no single format dominating, the CE industry fears a proliferation of formats which further confuses the public and negatively impacts total market potential. Another reason often given for a single format may be lessoning as online sales grow. The tradiitonal argument has been that retailers did not want to carry and give shelf and warehouse space to multiple formats. That is not nearly the problem with online sales.

Question: Does anyone have accurate fugures on the licensing fees for player and disks for the two main contending formats? Also, while I have seen many reports saying that the HD DVD player is cheaper to produce ,I have not yet seen any bill of materials that would support that conclusion. Does anyone have a bill of materials for either or both formats? Thanks, Dale

[stevekaden]

I can't speak to real terms - but in general the industry has shown, costs for hardware are considerably less than we would think. In huge scale manufacturing, we're talking cost of raw material, the processing from (almost) dirt into finished materials get's so cheap it's not that costly and thus you can almost talk in cost vs. weight.

Okay, sketchy commentary, but the bottom line for an HD DVD player is, unless exotic chips (Reon) and metal plates etc. are added they are not much more than ordinary upconverting DVD players. Drives (okay maybe Blue LD's are still a bit more than red) are basically the same, power supplies about the same, boards and most all the chips are still boards and processed silicon...I'd suggest that the cost of a HD player is only a tad more expensive than an upconverting DVD player - and they are down to $50. (Perhaps the HD drives are HD and DVD so maybe a bit more there).

The history of the industry makes this rather obvious. Thus, I do not think Toshiba is loosing money on hardware. I would guess they aren't on marketing either they haven't seemed to spend much. But Sony seems to be pouring on the marketing and are probably spending themselves negative.

(I would not suggest that the better hardware is not more expensive - less quantity, lots more material, maybe lots more labor...etc. pushs the costs quickly.)

[Shane]

The main factor between these new players and the upconverting DVD players you're comparing to is licensing. There's a lot of new IP (Intellectual Property) in these new players that have to be licensed.

So in that Bill of Materials, you need to include patents and licensing, not just silicon and drive technology.

- Shane

[Richard]

I write the following due to all the animosity this format war has ignited over the last 1.5 years.

The outcome of this format war along with the angry and accusatory voices from the losing camp would be no different had HD DVD claimed victory.

There is the business of manufacturing and the business of technology innovation! All products reach a plateau where manufacturing profits are limited and success or failure becomes a game of cents in cost to produce. Deep down these folks want nothing more than to have the public replacing their libraries of something every 10 years for some reason; it creates higher profits for manufacturing and can lead to new players in technology steering us to other places the old guard may not.

SACD and DVD Audio didn

[Dale]

My question above is:

Does anyone have accurate figures on the licensing fees for player and disks for the two main contending formats?


It occurs to me that we are all sincere people here. So, why not join forces as investigative reporters and let the conclusions be drawn from the facts we collectively gather?

OK, there may be a few jerks that haunt these forums and so those of you who are just jerks, how about bowing out and doing your fellow man a favor.

OK, with the jerks out of the way now let us more sober-minded take a serious look at these two formats.

But first...in reading the many forums on the high def DVD there is a staggering amount of prejudice at work. Let me be the first to jettison mine. I have learned that no new truth or fresh fact can penetrate a prejudiced mind. Quite frankly, I don't know where many of these very strong advocacies for either format come from. I have found very few who can stand up to deep questioning as to why they support this or that format. the determining factor typically boils down to some kind of hatred for a company identified with a format. When we get too close to where ignorance overtakes reason the reaction is to charge the questioner with a bias for the opposing side. In some cases a format is embraced for no other reason than to save a $300 investment made earlier and has little to do with any broader appreciation of a format's value. We need to rid ourselves of all this kind of thinking if we are to get to the truth.

I am hoping that some of you (or all of you) have already done a thorough job of investigative reporting and can offer us quickly a solid set of reasons for a conclusion (choice). Most of the arguments I have seen of late go feebly to finger pointing at "greedy manufacturers and manipulative studios" making smelly deals behind closed doors. That kind of argument can be taken up after we know all the more substantive facts and reasons for making a sound choice. Then we will know what is odorous and what is not.

Some of you on our forums may be part of professional team that is in support of one side or the other. It is not uncommon for professionals to use these forums to advance public opinion for your employer's ambitions. I hope you will reveal yourself and let this discussion be far more transparent. We need to know what you know but we don't want it fed to us in a way where our own credibility is questioned for not swallowing everything laid out in your anonymous one sided presentation. Join us without bias and we will listen.


TOPIC

One of the things being said today by Toshiba in their latest press release and new advertising campaign is that HD DVD has superior image and audio. Since we all respond to "better image and sound" that is a powerful consideration. Let's take that claim seriously and see if it is supportable. Back up your findings with as much engineering and science as you can and if there is any interpretation of those findings required for perspective's sake, use the most expert commentator you can find.

That should get us started. If no one picks up on this challenge then let's just leave the decision to those who have enough dicipline to examine every detail and abide by their conclusions. __Dale

[pmalter0]

I agree wholeheartedly with Dale. And in an effort to show some ecumenism, I, as an HD DVD backer will call BS on Toshiba; many reviewers have compared HD DVD to BR and none have found the alleged superiority of HD DVD. So let's start off by eliminating that potential issue. However the issue we were on --which is less costly to produce -- it's probably the most important issue of all.

Before we eliminate all polemics however, I would like to address some of the Richard's allegations:



[quote]SACD and DVD Audio didn

[film11]

many reviewers have compared HD DVD to BR and none have found the alleged superiority of HD DVD. So let's start off by eliminating that potential issue.

OK. But I do have to say that I know other reviewrs have noticed differences. Here's one example (which I agree with) from Josh Zyber on MI:3 (And I promise not to post anything further on the subjective superiorityof one format over another.)

"In comparing the VC-1 compressed HD DVD to the MPEG2 compressed Blu-ray, differences were subtle but observable. On my screen, the Blu-ray looks slightly softer throughout, with just a bit less vibrancy and "pop". I'll concede that at the present time I don't know whether this is attributable to the first-generation hardware currently available or a distinction between MPEG2 and VC-1. Where I do think the compression codec comes into play is that the Blu-ray is noisier in many scenes. For example, the green wall in the background of the shot at the 13:35 mark is grainy on both discs but less so and more stable on the HD DVD. Neither disc looks poor by any means."

[Dale]

I don't know how to approach this subject exactly so I will appreciate some guidelines form the forum.

Let me start out with my own view that says by "cost"we mean total "cost", including R & D, licensing, manufacturing engineering, manufacturing tooling, manufacturing, marketing, distribution, service and returns, overhead burden. Then that total cost is divided by the market size to be realized in that same time frame. Or do we take the simpler road and take unit price at retail and be done with it? Perhaps some experienced analyst can suggest how we arrive at true costs. Are we going to accept the cost benefit from the subsidized boxes and assume there will not be a payback later?

In the case of Blu ray, where all players are not required to do the same thing, the calculations might prove a bit dicier than with HD DVD.

There are licensing costs and I have asked for that information. I found some, though nothing conclusive, on the web. I think we must go to the horses' mouth--the licensing agents--and get from them all that we can. The licensing applies to the player, the DRM, the management of the license, and a per unit fee on the disk media. There is also special license for rewritables for computers, which appear from my research to be where the greater number of high def DVD drives will ultimately be installed. Knowing that number will help us arrive at total cost. Then there is the cost of disk mastering and pressing (licenses for each here also) and the cost of obtaining rights for movies and other content (is it the same for both formats? If so that's a wash.) Should we not take into account the cost of promotion to the various sectors and distribution and service to those sectors?

SINGLE FORMAT....WHY?

I think we need expert witnesses from the industry to give their reason why one format is desirable. Having been through all of the HDTV wars since 1984, I can tell you that the mantra throughout was to reach accord for one standard/format to keep cost at a minimum. I don't know if that was believed by everyone because of repetition of the message or whether consumer electronics development and manufacturing history made proved it to be an axiom? I will say that the presidents of all of the companies with which I had the privilege of interviewing always held up one standard per product category as the Holy Grail. When Europe broke away from the 1125/60 camp (that was the Japanese production standard) it was in order to temporarily scuttle the HDTV movement. Europe had not kept pace with emerging HD technology and they feared that their own consumer electronics industries -- huge employers with a uniquely European social flair-- would become beholden to, or even obliterated by the Japanese. Europe put the brakes on the entire world movement when they claimed the need for a uniquely European standard for production (which at that time dictated the display). I watched the air let out of the balloon and many threw up their hands in disgust. Had it not been for the introduction of digital into the dialog about transmission in 1991 I think the Europeans would have forestalled the global HDTV movement by as much as ten years simply by their introducing a seperate and divisive format. Even with two production standards the more-than-clever Joe Flaherty (he created also electronic news gathering) from CBS, Inc. reached a monumental accord with everyone involved around the world and from the 1125/60 and the 1250/50 production standards arose the Common Image Format of 1080i/50 and 60 (1080 active lines) . That allowed the world competitors to make one imager to get things rolling everywhere at the lowest possible cost. That proved to be a important in that it has led to global standards for displays, i.e., 1080 X 1920i 50/60 and finally 1080 X 1920 50/60p. That fixed common image format set the HD displays which can now be be found around the world. You can imagine the state of affairs if there were no industry guideline! We could have as many screen formats as there are households!

Of course, here in the USA, the FCC demands that there be just one standard or format for broadcasting. But that is a different situation than with stand alone external boxes.

I have this question: Does the public have the collective wisdom and focusing power to choose from a set of specifications and effect a sophisticated new format?

Let's call upon leaders in the CE industry and ask them what they know about the consumer's understanding and how prepared they think we are to make this decision on a format?

That's enough for now.

Dale

[Richard]

One of the things being said today by Toshiba in their latest press release and new advertising campaign is that HD DVD has superior image and audio.

The press release I believe you are referring is:
Toshiba Deploys New HD DVD Marketing Initiatives Based on Strong Fourth Quarter Unit Sales

HD DVD not only creates the ultimate high definition entertainment experience, leveraging all of the promise of the format such as superior audio/video performance...

I