The New York Times-20080128-Sales of HD DVD Players Plunge After Warner Move
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Sales of HD DVD Players Plunge After Warner Move
Full Text (416 words)One week after Warner Brothers Entertainment announced that it was abandoning its support for the next-generation HD DVD format in favor of the Blu-ray high-definition format, consumers abandoned HD DVD.
What was a 50-50 market split in 2007 for the high-definition players shifted sharply in Blu-ray's favor in the new year. For the week that ended Jan. 12, Blu-ray hardware captured 90 percent of the market, according to data collected by the NPD Group, a market analysis firm.
The Warner film studio, a division of Time Warner, announced Jan. 4 that after May it would release movies solely in the Blu-ray format. Until then, it was the one major studio to release in both the HD DVD and Blu-ray formats.
But is one week of sales data an indicator of the end of HD DVD or simply a temporary blip?
Toshiba, the major manufacturer of HD DVD players, thinks the data signify little. Jodi Sally, vice president for marketing of digital audio/video at Toshiba America Consumer Products, said player sales dropped because the company had just ended a Christmas discount and because some Blu-ray players were being given away to the buyers of certain flat panel TVs.
Stephen Baker, NPD's vice president for industry analysis, said not too much should be read into one week's sales results. One week is not a trend. It's a data point, he said.
Still, Mr. Baker doubted that sales swings of that magnitude could be attributed to price changes alone, especially given the extensive news coverage the Warner announcement received.
Toshiba certainly took notice. To spur sales, it cut the price of its players on Jan. 13. Its entry-level HD-A3 machine now sells for $149.99, down from $299, making it not that much more expensive than some of the old-fashioned DVD players. Blu-ray players typically cost about $300.
Warner's announcement leaves DreamWorks Pictures, Paramount Pictures and Universal Pictures with the HD DVD format. In addition to Warner Brothers, Blu-ray distributors include Walt Disney, Fox, Lionsgate, MGM and Sony.
Consumers have gotten the message loud and clear, said Andy Parsons, chairman of the Blu-ray Disc Association, a trade group. Lowering prices sends the message that Toshiba is having a fire sale.
Toshiba says it will increase its marketing efforts, including running HD DVD ads during the Super Bowl. At $149, HD DVD is still a great value, Ms. Sally said.
I don't see market share going back to 50-50, Mr. Parsons said. That I will bet a lot of money on.
