Toshiba To Start Price War?

[Rasczak]

In an interview with Toshiba Computer World is reporting Toshiba may be prepared to slash prices on it's HD DVD players to ensure mass market penetration:

as any follower of the current format war knows that both HD-DVD and Blu-ray fell far short of industry sales expectations. While the HD-DVD units are still quite high in relation to regular DVD units, if Toshiba prices aggressively, will this give HD-DVD a huge lead over Blu-ray? Here is what Yoshihide Fujii indicated might happen, who is president and CEO of Toshiba's digital media network company:

"At first, I thought the price threshold is $499. Maybe coming next is $399 and after that is $299." He didn't give a time frame for this possible drop in prices.

While it appears Toshiba would like to hold out as long as possible before dropping their prices (in hopes of sales increasing enough at the $499 level to keep from having to drop to $299 quickly just to entice buyers), dropping the price may very well give HD-DVD a nice lead over Blu-ray--which could balloon--especially if the HD-DVD 'hack' to defeat its DRM becomes widespread knowledge long before Blu-ray unti prices come down enough to lure the general public to purchase those. That said, it is hard to say what will happen in a world where profits reign supreme, and where Toshiba is a vigorous backer of DRM as well.

Sub-US$300 HD DVD players Should certainly peak the interest - although, as mentioned in the article, with HD DVD selling so well now it's unlikely to happen overnight. It will also be very interesting to see how companies like Pioneer react - they joined the BDA to preserve their ever declining market share and to avoid a price-war like that experienced with DVD recorders. If the BluRay camp are forced to cut costs as well where will companies like Pioneer go - dual format perhaps? Or into further decline?

Source:
http://www.cdfreaks.com/news/Will-th...VD-on-top.html

[MikeK]

although, as mentioned in the article, with HD DVD selling so well now it's unlikely to happen overnight.


Where does it say that?


cdfreaks said

both HD-DVD and Blu-ray fell far short of industry sales expectations

and Computerworld said

While both HD-DVD and Blu-ray Disc have appeared in stores during 2006, sales of both formats remain relatively low.

[Avi]

Originally Posted by Rasczak

In an interview with Toshiba Computer World is reporting Toshiba may be prepared to slash prices on it's HD DVD players to ensure mass market penetration:



Sub-US$300 HD DVD players Should certainly peak the interest - although, as mentioned in the article, with HD DVD selling so well now it's unlikely to happen overnight. It will also be very interesting to see how companies like Pioneer react - they joined the BDA to preserve their ever declining market share and to avoid a price-war like that experienced with DVD recorders. If the BluRay camp are forced to cut costs as well where will companies like Pioneer go - dual format perhaps? Or into further decline?

Source:
http://www.cdfreaks.com/news/Will-th...VD-on-top.html

Maybe sensible to avoid spending silly money on the current crop of BD players until all the format features/functions work and the price/performance benefits of HD DVD forces the BD cost to spiral down.

AVI

[Rasczak]

Originally Posted by Avi

Maybe sensible to avoid spending silly money on the current crop of BD players until all the format features/functions work and the price/performance benefits of HD DVD forces the BD cost to spiral down.

Indeed - this time next year BD players will be significantly better specced (BD Live, DTS-HD MA support, Dolby TrueHD support, HDMI 1.3 etc) and alot cheaper. Thankfully HD DVD players have arrived well specced - already support one of the lossless audio codecs - making a good case for early purchase. I should imagine we'll see DTS-HD MA support added though.

Nevertheless whilst I have resigned myself to replacing my BD player early next year - I am confident my HD DVD will be a solid performer for sometime to come

[Albion]

The first day of 2007 and Toshiba already going for the jugular.I would suggest this news is sooner than any one would have predicted.

TBH the temporary hack will only encorage sales of HD-DVD.
More players more disks sold.AACS has'nt been cracked and if it has it affects Blu-ray equally.

I think this is a very timely announcement, almost,if not, the perfect response to the mess which Blu-ray finds itself in at present.

As you say if a few BD supporters jump ship,we may get dual format players before the year is out.How would the other Blu-ray partners react to that.Can you imagine a Blu-ray player at $299 this year?They would need to be, if ,dual format players became available.

And would certain Blu-ray only studios start releasing in both formats,if there was a further surge in HD-DVD sales?

[BadAss]

Toshiba knows whats coming this year and the only way to compete is by keeping its players at rock bottom prices. Don't they realise they're actualy doing more damage to the HD market than anything else. Most people are scared of format wars and alot of people are put off buying any format, incase they purchase into the wrong one. Does Toshiba realy see HD-DVD being anything other than another betamax?

As a CE company what do they gain by dropping the price of players? I thought a compay was in the market to make profit? Why create a market that at best breaks even? It seems to me its for spite and spite alone.

It seem to me an act of desperation and a last gasp of hope to think price dropping is going to win this war. All Toshiba will do is create a niche within a niche. They'd probably gain more by ditching HD-DVD all togeher and make Blu-ray players for profit. That way they would gain the trust of consumers and open the market, instead of creating confusion and hate.

[Dr Force]

Originally Posted by BadAss

Toshiba knows whats coming this year and the only way to compete is by keeping its players at rock bottom prices. Don't they realise they're actualy doing more damage to the HD market than anything else. Most people are scared of format wars and alot of people are put off buying any format, incase they purchase into the wrong one. Does Toshiba realy see HD-DVD being anything other than another betamax?

As a CE company what do they gain by dropping the price of players? I thought a compay was in the market to make profit? Why create a market that at best breaks even? It seems to me its for spite and spite alone.

It seem to me an act of desperation and a last gasp of hope to think price dropping is going to win this war. All Toshiba will do is create a niche within a niche. They'd probably gain more by ditching HD-DVD all togeher and make Blu-ray players for profit. That way they would gain the trust of consumers and open the market, instead of creating confusion and hate.

I take it you prefer Blueray

[Avi]

Originally Posted by BadAss

Toshiba knows whats coming this year and the only way to compete is by keeping its players at rock bottom prices. Don't they realise they're actualy doing more damage to the HD market than anything else. Most people are scared of format wars and alot of people are put off buying any format, incase they purchase into the wrong one. Does Toshiba realy see HD-DVD being anything other than another betamax?

As a CE company what do they gain by dropping the price of players? I thought a compay was in the market to make profit? Why create a market that at best breaks even? It seems to me its for spite and spite alone.

It seem to me an act of desperation and a last gasp of hope to think price dropping is going to win this war. All Toshiba will do is create a niche within a niche. They'd probably gain more by ditching HD-DVD all togeher and make Blu-ray players for profit. That way they would gain the trust of consumers and open the market, instead of creating confusion and hate.

BadAss are you a consumer or a CE company ?

The best way to engender trust is to deliver what you promise out of the gate and offer the consumer great value. Would youi not agree ?

Niche within a niche ? HD DVD appear to be setting the standard. I suspect if you did a pole of who consumers trust BD would not come out on top given its performance thus far.

Both formats will be around for a while and if HD DVD forces the BDA to step up to the mark and offer better value that's a good thing.

AVI

[Packetfront]

Only when you are desperate they sell off cheap and this is a clear indication of that Toshiba feels threatened in the market so their only weapon is lower their prices until there is no margin anymore..

And what happens when Toshiba doesn't have the price weapon anymore to use? it's just a matter of time, less than 3 months that cheap players are coming out from the Blu-ray manufacturers like Samsung that will show it's budget player to compete with Toshiba A2 at CES in January.

In March 2007 the general consumer will stand in the shop and ask why HE or SHE shall buy a Toshiba for $300 when you can get the Samsung for the same price and 90% of all movies will be out on BD as the only studios not supporting BD are Universal and HDnet(should not even mention this company, its not a real studio, bikini movies for old men)

Yes the consumer wants the best deal and HD-DVD will not be the best deal in 2007.

[Rasczak]

Originally Posted by BadAss

Toshiba knows whats coming this year and the only way to compete is by keeping its players at rock bottom prices. Don't they realise they're actualy doing more damage to the HD market than anything else. Most people are scared of format wars and alot of people are put off buying any format, incase they purchase into the wrong one. Does Toshiba realy see HD-DVD being anything other than another betamax?

I would say Toshiba is being very clever here - they know the lack the CE support compared to BluRay and by crashing prices they are defeating the BDA companies in their original aim: to create a semi-cartel in order to maintain unit prices against the onslaught of Chinese/Asia mass produced players.

By slashing prices they will continue to drive up HD DVD market share - this has a number of benefits:

1) Will act as a positive influence on studios not currently backing HD DVD to join.

2) Will ensure component producers continue to develop dual format solutions meaning the core components will be there for CE companies to go 'dual' format - or at least not be disadvantaged should they go exclusively HD DVD.

3) Will force the BDA companies to slash prices in response - which companies such as Sony and Pioneer - will be loathe to do at present. This could force them down a dual route much faster than otherwise. It will certainly be a major encouragement to BDA companies with close links to Toshiba: Samsung and Hitachi for example.

As a CE company what do they gain by dropping the price of players? I thought a compay was in the market to make profit? Why create a market that at best breaks even? It seems to me its for spite and spite alone.

Not at all - the three reasons I pointed out above. Furthermore if Toshiba suceeds in a HD DVD win - or, as is more likely, a dual format future - then they stand to make billions in revenue from licencing over the next 10+ years. The more they take a 'hit' now the greater the chance of this outcome. The Toshiba group has fairly deep pockets so it'll be interesting to see how low they go - maybe sub-US$200 players by this time next year?

It seem to me an act of desperation and a last gasp of hope to think price dropping is going to win this war.

As desperate perhaps as Philips was when it drove down the cost of DVD recorders from £1000 to £200 in a little under 18 months? The net effect is they are now making millions in licencing revenue from the 'plus' media that has far outstripped their hardware losses. The same price war almost put Pioneer's optical drive business out of business BTW. Toshiba is merely following suite - the difference of course is Toshiba is much bigger, and much richer, than Philips. Ergo this price war may go alot lower.

[cj]

Originally Posted by BadAss

Toshiba knows whats coming this year and the only way to compete is by keeping its players at rock bottom prices. Don't they realise they're actualy doing more damage to the HD market than anything else.

So providing a better product that costs the consumer less is somehow damaging the HD market??? You guys make me laugh Don't worry Blur-Ray will still be around as proprietry PS3 format - UMD has hung around on the PSP.

[Packetfront]

Originally Posted by BadAss

Does Toshiba realy see HD-DVD being anything other than another betamax?

A format can never survive with only three major studios, Warner, Paramount and Universal.

That's what you get with HD-DVD.

It gets bored to watch King Kong and Superman over and over all the time and rely so much on Universal to bring out new titles.

It's like subscribing to Sky and that's the only thing you get, i want choice so i have a large motorized satellite dish and get all channels i want to watch.

Consumer wants choice, HD-DVD is not.

[Rasczak]

Originally Posted by cj

UMD has hung around on the PSP.

Although it seems Sony may now be moving onto HDD technology instead I'm sure they'll provide support to all their loyal customers though...

[Rasczak]

Originally Posted by Packetfront

A format can never survive with only three major studios, Warner, Paramount and Universal.

HD DVD has alot more than 3 studios supporting it though...

- Warner
- Universal
- Paramount
- Studio Canal
- 2Entertain/BBC
- New Line
- HBO
- Weinstein
- Magnolia
- Brentwood Home Video
- BCI
- DVD International
- Eagle Rock Entertainment
- Concert Hot Spot
- Image Entertainment
- Goldhil Home Media
- HDNet
- Razor Digital Entertainment
- Rhino Entertainment
- Disocvery Channel
- MTI Home Video

...I think most would describe at the least the first eight to be "major" studios

[Packetfront]

Originally Posted by Avi

BadAss are you a consumer or a CE company ?

AVI

He works for Sony or whatever and i don't care to be honest as he is telling you the truth.

Toshiba needs to slash the prices fast if they want to make some impact and it's January already and CES is not too far away counting the days.

And as soon the Samsung is out and other manufacturers will introduce cheap BD players you can kiss goodbye to HD-DVD by the summer at the latest.

What you will see is tons of HD-DVD players selling on Ebay, people being desperate as no one wants a ancient HD-DVD player that can only play King Kong and some other blockbusters.