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Scenario of how HD DVD wins format war quickly!

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Old 03-30-2007, 12:48 PM   #1
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Default Scenario of how HD DVD wins format war quickly!

Here is how I believe the HD DVD camp could quickly and decisively win the format war and take over the market from SD DVD.

1).They accept a temporary loss on each DVD produced and produce all the new releases and even put out catalog DVDs in a SD/HD DVD format for let's say $20 each. Eventually the shear economy of scale will make the DVDs profitable again. Especially when they gain total dominance in the DVD market. People will purchase because the cost will be around the same as the SD DVDs they've been purchasing and since they have both formats they cannot become obsolete.

2). Continue to undercut the prices of the hardware in comparison to Blu-Ray and reach the magical under $200 HD DVD player with good quality and features. Then the consumer would find it easy to reconcile replacing their old DVD players with a much improved HD DVD player and still enjoy all their previously owned DVDs and even CDs.

Doing these two main factors would easily cause HD DVD to take over the 200 billion dollar DVD market without having to cause the money concious consumer to raise his spending limits and they would love it because they would come to understand the greater viewing advantages of HD without having to spend a great deal of extra funds.

It's a Win, Win situation for the companies and the consumer!

Last edited by unotis; 03-30-2007 at 12:56 PM.
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Old 03-30-2007, 01:27 PM   #2
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Default I agree with the player pricing model

unotis,

Your hardware point is possible for Toshiba players, since they make players and have the most to gain from winning out over BD. As far as movies, Toshiba doesn't make any and there is no incentive for the studios to lose money (or make less) in order to give HD-DVD a boost. They don't care which format wins.

In fact if Toshiba was able to produce and distribute a $200 player there would be no need to cut movie prices. Average consumers would consider buying the players to "future proof" themselves, even if they didn't have a HD television.

Would that be enough to win the war? Who knows, but it couldn't hurt.
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Old 03-30-2007, 01:29 PM   #3
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I agree with this, Unotis. I've always felt the releasing combos only at non-combo prices would be like a sledgehammer to Blu-ray. Also, $199 is the critical mass price point and if HD DVD can get there (with a standalone) by the holiday season, they will sell a bunch, as not only will the price be irresistable, but people will reflexively buy an HD DVD player to go along with the HDTV on their way out the door.


I'm actually pretty optimistic that your scenario will occur.
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Old 03-30-2007, 01:56 PM   #4
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Personally, I like combo discs, DVD-A/CD, SACD/CD and I would like HD DVD/DVD or Blu-ray/DVD but I am surprised others here do. The combo disc is not well thought of on the other forums and mostly to be avoided based on the posts I read. The strategy of software companies taking a loss to help a hardware platform succeed is novel, but not realistic. Warner and other companies you are asking to do this are interested in profits and releasing combo discs at a loss, harming their own profitable products, DVD and Blu-ray just isn't something that will even be considered. The starter of this thread is not really suggesting this as a viable option, at least I hope not.

"Warner would you start releasing HD DVD/DVD combo discs at a loss, while also losing profitable sales on the same title on DVD and Blu-ray to help HD DVD succeed?"

Just like the Blu-ray participants, the HD DVD participants are involved hoping to make a profit, that isn't one strategy that will ever be attempted.

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Old 03-30-2007, 02:01 PM   #5
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Quote:
Originally Posted by SLedford View Post
unotis,

Your hardware point is possible for Toshiba players, since they make players and have the most to gain from winning out over BD. As far as movies, Toshiba doesn't make any and there is no incentive for the studios to lose money (or make less) in order to give HD-DVD a boost. They don't care which format wins.

In fact if Toshiba was able to produce and distribute a $200 player there would be no need to cut movie prices. Average consumers would consider buying the players to "future proof" themselves, even if they didn't have a HD television.

Would that be enough to win the war? Who knows, but it couldn't hurt.
You forget the Studios that are producing HD DVDs have a very large vested interest that the format wins and really do care.

If the market started to respond to the increase of SD/HD combo DVDs sales along with the increase of HD DVD players sold all the Blu-Ray studios woud see the writing on the wall and jump aboard also.

They also know when the SD format is taken over by the HD DVD format cost per HD DVD would drop considerably and profits would soar because they could drop the dual disc format to cut cost per unit.

Lose some profit for the short term to make huge profits in the future because of total domination of the market as the result of only one format being present!
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Old 03-30-2007, 02:08 PM   #6
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Release HD-DVD/Combos at $19.99 MAX. Don't release DVD only titles.
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Old 03-30-2007, 02:14 PM   #7
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Quote:
Originally Posted by Chris Gerhard View Post
Personally, I like combo discs, The strategy of software companies taking a loss to help a hardware platform succeed is novel, but not realistic. Warner and other companies you are asking to do this are interested in profits and releasing combo discs at a loss, harming their own profitable products, DVD and Blu-ray just isn't something that will even be considered. The starter of this thread is not really suggesting this as a viable option, at least I hope not.

"Warner would you start releasing HD DVD/DVD combo discs at a loss, while also losing profitable sales on the same title on DVD and Blu-ray to help HD DVD succeed?"

Just like the Blu-ray participants, the HD DVD participants are involved hoping to make a profit, that isn't one strategy that will ever be attempted.

Chris
If they want to really make a profit, they would help Toshiba, then yes, they would lose in the short run inorder to maximize profits later.

They would realize this would be the quickest way to penetrate the market and stop them from having to produce two competing formats that do not have anywhere near a large segment of the possible market. Why would they like to divide up their efforts and not combine them for much greater profits in the near future.

Even they realize HD is going to become the predominate home view format because of nothing else then HDTV penetration which will only increase and ultimately control totally.

This is just good marketing and business strategy, why would they not do this because they love Blu-Ray and owe Sony alligence?

I think not, alligence only lasts until they know the way the market is going.
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Old 03-30-2007, 02:17 PM   #8
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Release HD-DVD/Combos at $19.99 MAX. Don't release DVD only titles.
Correct, that way everyone could be protected and the average consumer could transition without any financial pain.
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Old 03-30-2007, 02:37 PM   #9
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Again, what you are asking is have the companies that can make a profit on their DVD and Blu-ray sales to forgo that, replace it with HD DVD/DVD combos with a loss per unit, hoping somewhere down the road they can profit. The Blu-ray exclusive studios will have to find that one hilarious but obviously can easily compete by lowering the Blu-ray titles to a break-even point, which will be lower than the loss leader HD DVD/DVD titles. Now consumers that want HD are faced with buying HD DVD/DVD for a premium for the titles that are available or buying the same title at a lower price on Blu-ray or one of the Blu-ray exclusive releases for less since Blu-ray can't allow HD DVD/DVD combos to be sold for less. Consumers that want the DVD are going to write letters to all involved asking why they now have to pay extra for this other side they can't play to get a DVD. This is among the silliest suggestions ever. I suspect the strategy is now the second one I can see that does end the war quickly, in favor of Blu-ray.

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Old 03-30-2007, 02:47 PM   #10
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Correct, that way everyone could be protected and the average consumer could transition without any financial pain.
Of course this isn't going to happen..
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Old 03-30-2007, 05:56 PM   #11
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Quote:
Originally Posted by Chris Gerhard View Post
Again, what you are asking is have the companies that can make a profit on their DVD and Blu-ray sales to forgo that, replace it with HD DVD/DVD combos with a loss per unit, hoping somewhere down the road they can profit. The Blu-ray exclusive studios will have to find that one hilarious but obviously can easily compete by lowering the Blu-ray titles to a break-even point, which will be lower than the loss leader HD DVD/DVD titles.
Chris
Why do you assume that they would be sold at a loss? It costs pennies more to make a combo over a non-combo HD DVD.
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Old 03-30-2007, 07:43 PM   #12
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Well, no one would be talking about them *losing* money on combo discs, just making less profit (not that they want to make less profit ).

The costs to produce these discs is under $5.
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Old 03-30-2007, 07:46 PM   #13
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The only way I see this utopian scenario working out is if Toshiba is willing to subsidize these HD-DVD movie releases by blowing wads of cash for every movie that is released. While I don't think it would happen, I think this would be a small amount of money to spend when considering the long term royalties and licensing fees that would come in years from now.
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Old 03-30-2007, 08:10 PM   #14
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I definitely see Universal trying it on a few new high-profile releases eventually. This is something that would occur very gradually and would be constrained to new releases only (maybe in a few years they would release catalogs this way and discontinue the SD version)
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Old 03-31-2007, 09:05 AM   #15
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Quote:
Originally Posted by Chris Gerhard View Post
Again, what you are asking is have the companies that can make a profit on their DVD and Blu-ray sales to forgo that, replace it with HD DVD/DVD combos with a loss per unit, hoping somewhere down the road they can profit. The Blu-ray exclusive studios will have to find that one hilarious but obviously can easily compete by lowering the Blu-ray titles to a break-even point, which will be lower than the loss leader HD DVD/DVD titles. Now consumers that want HD are faced with buying HD DVD/DVD for a premium for the titles that are available or buying the same title at a lower price on Blu-ray or one of the Blu-ray exclusive releases for less since Blu-ray can't allow HD DVD/DVD combos to be sold for less. Consumers that want the DVD are going to write letters to all involved asking why they now have to pay extra for this other side they can't play to get a DVD. This is among the silliest suggestions ever. I suspect the strategy is now the second one I can see that does end the war quickly, in favor of Blu-ray.

Chris
It is amazing how you can grab ahold of the idea and mis-understand it so much, just so you can keep your mindset of Blu-Ray winning intact.

They would not have to pay extra for the other side, they would get it for free (where did you misunderstand that?) so they would not write anyone to complain.

Also why would Blu-Ray dropping the cost of their DVDs do any good? The consumer would still have only the Blu-Ray disc and couldn't watch it on the DVD players they already have. And they would still have to pay for the now over priced under featured Blu-Ray DVD player (no where near to the magic under $200 price point).

The whole idea is to make it painless to transition to HD without any worry about the DVDs becoming obsolete because the HD format failing, They would still have the SD side to watch!

And I really don't think it would cost that much more per disc to make it a combo, to capture the entire market, it would be a relatively cheap investment. Spend a (at most) few million to earn many billions!

You're probably correct this would be silly and would make Blu-Ray win faster (in your dreams that is).

Last edited by unotis; 03-31-2007 at 09:16 AM.
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