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Scenario of how HD DVD wins format war quickly!

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Old 04-01-2007, 06:25 PM   #46
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I think you hit the nail BobY. Later on the combo will work better when players are lower priced and they can more easily sell the combo idea.
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Old 04-01-2007, 06:36 PM   #47
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Combos will definitely happen. Why have everybody swim across the river when you can build a cheap bridge? Retailers will demand them. Consumers will want them and studios will oblige. Like Boby said its way early for that kind of demand and only desirable now on new releases. Besides, the uncertainty of the format war at this stage doesn't help either. Hopefully everything will fall into place later in due time. The popularity of combos will be a very gradual event.
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Old 04-02-2007, 05:01 AM   #48
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Last time I looked, more than 50 percent of the upcoming releases are going to be of titles already available on DVD. The single inventory combo disc has been tried and failed with SACD and DualDisc. The Rolling Stones catalog had about 15 or so SACD hybrids released. They did sell as CD's to most people, the price was a dollar or two higher and I would guess most people didn't even know it was a hybrid SACD. The hybrid SACD's have been replaced by CD's of the DSD remastered albums. These 2002 Abkco releases didn't even state SACD on the cover, the subsequent CD releases indicate DSD remastering. The SACD versions were discontinued. A few DualDiscs were released as single inventory releases in this country. It is a failed strategy and won't be tried with HD DVD. Even if HD DVD/DVD combo discs continue, which I doubt, the DVD will be released as well and will sell far greater quantities.

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Old 04-02-2007, 05:16 AM   #49
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You guys seem to be ridiculing me for stating this plan won't be tried and after time passes and it isn't being used, I would assume you will then accept the obvious.

I will try one more time and make it simple. Forcing consumers to move to the next format or a different format by a single inventory combo disc can't work. Even if consumers are willing to pay $20 for DVD's which I don't believe but will assume they are for the sake of argument. A way too large segment will look at an HD DVD/DVD combo and immediately think, I should be able to get the DVD a whole lot cheaper if it didn't have the HD DVD on one side. The perception of being ripped off is inevitable, the plan can't work. I said it can't work when I saw it discussed for SACD and DVD-A. Consumers that want a CD are going to resent paying for something they don't want. After it had a limited market trial, it was agreed by all major labels it can't work. Selling a CD to someone willing to pay for an SACD or DVD-A can work, because everybody that can play either more expensive high resolution format can also play CD and many will find having one for the auto or other location a benefit.

I had to argue the same issues, single inventory will help offset the additional costs and the companies can forgo profits for awhile to gain acceptance of the format. I said it didn't matter then and I was right and it won't matter this time and I will be right again. I don't even see it as close or complicated.

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Old 04-02-2007, 06:42 AM   #50
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Originally Posted by Chris Gerhard View Post
You guys seem to be ridiculing me for stating this plan won't be tried and after time passes and it isn't being used, I would assume you will then accept the obvious.

I will try one more time and make it simple. Forcing consumers to move to the next format or a different format by a single inventory combo disc can't work. Even if consumers are willing to pay $20 for DVD's which I don't believe but will assume they are for the sake of argument. A way too large segment will look at an HD DVD/DVD combo and immediately think, I should be able to get the DVD a whole lot cheaper if it didn't have the HD DVD on one side. The perception of being ripped off is inevitable, the plan can't work. I said it can't work when I saw it discussed for SACD and DVD-A. Consumers that want a CD are going to resent paying for something they don't want. After it had a limited market trial, it was agreed by all major labels it can't work. Selling a CD to someone willing to pay for an SACD or DVD-A can work, because everybody that can play either more expensive high resolution format can also play CD and many will find having one for the auto or other location a benefit.

I had to argue the same issues, single inventory will help offset the additional costs and the companies can forgo profits for awhile to gain acceptance of the format. I said it didn't matter then and I was right and it won't matter this time and I will be right again. I don't even see it as close or complicated.

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All good points Chris . . . if all things were equal. But as we know they are not equal, there being a format war. Companies are going to try different things to gauge the reaction of the consumer. Some will work while others will not.

We also know that we are dealing with large corporations who move at a snails pace. Their ability to make quick decisions is non-existant. Too many people in the decision making process.

But with all "wars" there is a game plan. And adjustments are made as time passes. We really don't know what the future holds so to totally rule something out may be a bit premature.
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Old 04-02-2007, 09:19 AM   #51
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The only problem I see with Chris's point of the people saying "If I've got a HD side on my SD DVD for $20 shouldn't I be able to pay less for the DVD if it didn't have it?" Just does not work in real life.

If a consumer goes to Circuit City and sees a new release with a MSRP of $29.99 but it is selling for $19.95, he wants it and he buys it, then if he sees the same movie in a combo disc for the same $19.95, why would he say" If I don't have the HD side why can't I pay less"? He wouldn't think that because he has been paying the same prices for new releases for 10 years, instead he will say "Well now I can try the HD version when I buy my next DVD player, which I think will be a HD DVD player because I can get one now for $199 and this way I get it for free, and I'm safe from it becoming obsolete".

That is what would really happen.

People don't look at products in the store and say "If they wouldn't spend money on giving me something free, I could buy this product for less. It is human nature to think two for the price of one?? Great!

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Old 04-02-2007, 09:28 AM   #52
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Originally Posted by BobY View Post
Do you think "My Dinner with Andre" was introduced at $3.49? All that tells you is how much profit margin there really is in DVD. While retailers may cut margins to the bone to move old or slow-moving stock, they won't sell at a loss--it makes more sense to dump them in the trash and write them off as bad inventory.

What difference does the price of a specific old DVD selling at "end of life" price have to do with this?

No matter how you slice it and dice it, the ultimate *cost* of a combo HD DVD/DVD will be no more than current combo SD discs. If the studios or retailers decide to charge more, that's a different issue, but all that has to happen is for one major retailer to say "Hey I think I'll sell these at $12.00 and make up the loss in per unit profit with increased sales volume".
My bad, I was being sarcastic, it was "April Fools Day".

I thought the "rolling eyes face" at the end of the post would give it away.

But, excellent points!
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Old 04-02-2007, 09:49 AM   #53
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The only problem I see with Chris's point of the people saying "If I've got a HD side on my SD DVD for $20 shouldn't I be able to pay less for the DVD if it didn't have it?" Just does not work in real life.

If a consumer goes to Circuit City and sees a new release with a MSRP of $29.99 but it is selling for $19.95, he wants it and he buys it, then if he sees the same movie in a combo disc for the same $19.95, why would he say" If I don't have the HD side why can't I pay less"? He wouldn't think that because he has been paying the same prices for new releases for 10 years, instead he will say "Well now I can try the HD version when I buy my next DVD player, which I think will be a HD DVD player because I can get one now for $199 and this way I get it for free, and I'm safe from it becoming obsolete".

That is what would really happen.

People don't look at products in the store and say "If they wouldn't spend money on giving me something free, I could buy this product for less. It is human nature to think two for the price of one?? Great!
Great post unotis!

This was exactly what I was going to say. Glad I read through before replying from the previous page.

Also comparing a format severely limited in actual use/demand like SACD to HD DVD which many more multiples of people will be buying is not a good indicator for predicting what will happen in the future.
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Old 04-02-2007, 10:13 AM   #54
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Great post unotis!

This was exactly what I was going to say. Glad I read through before replying from the previous page.

Also comparing a format severely limited in actual use/demand like SACD to HD DVD which many more multiples of people will be buying is not a good indicator for predicting what will happen in the future.
Thank you, now I can hardly wait to see what Chris comes up with to reinforce his belief that if we sell combo DVDs for the same price as normal DVDs the consumer will revolt because they got something for nothing!

After all they really want less for less (but who but real penny pinchers would)?

His responses are entertaining.
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Old 04-02-2007, 11:06 AM   #55
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oops, didn't look at who was posting...
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Old 04-02-2007, 12:07 PM   #56
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My thoughts on this discussion:

1. HD-DVD releasing a quality $200 player would greatly help their side - I am not sure that it provides a guarantee win, though, especially since they will be burning cash to do it. It would also cause other manufacturers to not join Toshiba's side, since they want to make a profit on their players. Toshiba needs more manufacturers on their side, so it would in some ways hurt them if they started selling players at a loss. On the other hand, this may be the only thing they can do to avoid losing the format war, so they may indeed try it.
2. The only movie studio that has any interest in HD-DVD winning is Universal, and Universal alone selling movies for less profit won't be a deciding factor in the format war. Most movie studios would prefer that you buy the DVD version, and then later buy the High Def version, since they make money on you twice. If the studios decide that they are better off with one format, the fastest way to end the format war would be Universal switching to the BR camp. Currently, Universal hasn't done that, so it appears that the studios don't mind that much having a 2 format war.
3. When it comes to movies, the BR camp can match any price drops that HD-DVD does. In the end, neither side would have the advantage, studios would just be making less money.
4. Having combo HD-DVD/DVD disks for the same price as DVDs would be an advantage for HD-DVD, since the BR camp is not allowed to release combo disks, however as we discussed, only Universal has a reason to release a combo disk for less profit. Regardless, even if all of the studios did release combo disks at the same price, it would not be the deathknell of BR, since the main advantage BR has over HD-DVD is exclusivity. You won't be able to get Spider Man 3 on a combo disk for any price, and it will never run on a HD-DVD player.

By the way, I am one of the foolish people that pays $20 for most of my movies. I normally only buy new releases, and I just go to the local store to get it when I want it. The price really isn't that much to me, and I consider it a good deal at $20. Heck, I pay $4 to rent a movie for a week.
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Old 04-02-2007, 12:29 PM   #57
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By the way, I am one of the foolish people that pays $20 for most of my movies. I normally only buy new releases, and I just go to the local store to get it when I want it. The price really isn't that much to me, and I consider it a good deal at $20. Heck, I pay $4 to rent a movie for a week.
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Old 04-02-2007, 12:36 PM   #58
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My thoughts on this discussion:

1. HD-DVD releasing a quality $200 player would greatly help their side - I am not sure that it provides a guarantee win, though, especially since they will be burning cash to do it. It would also cause other manufacturers to not join Toshiba's side, since they want to make a profit on their players. Toshiba needs more manufacturers on their side, so it would in some ways hurt them if they started selling players at a loss. On the other hand, this may be the only thing they can do to avoid losing the format war, so they may indeed try it.
2. The only movie studio that has any interest in HD-DVD winning is Universal, and Universal alone selling movies for less profit won't be a deciding factor in the format war. Most movie studios would prefer that you buy the DVD version, and then later buy the High Def version, since they make money on you twice. If the studios decide that they are better off with one format, the fastest way to end the format war would be Universal switching to the BR camp. Currently, Universal hasn't done that, so it appears that the studios don't mind that much having a 2 format war.
3. When it comes to movies, the BR camp can match any price drops that HD-DVD does. In the end, neither side would have the advantage, studios would just be making less money.
4. Having combo HD-DVD/DVD disks for the same price as DVDs would be an advantage for HD-DVD, since the BR camp is not allowed to release combo disks, however as we discussed, only Universal has a reason to release a combo disk for less profit. Regardless, even if all of the studios did release combo disks at the same price, it would not be the deathknell of BR, since the main advantage BR has over HD-DVD is exclusivity. You won't be able to get Spider Man 3 on a combo disk for any price, and it will never run on a HD-DVD player.

By the way, I am one of the foolish people that pays $20 for most of my movies. I normally only buy new releases, and I just go to the local store to get it when I want it. The price really isn't that much to me, and I consider it a good deal at $20. Heck, I pay $4 to rent a movie for a week.
Good post!

The only one that I dispute is:
1 BR can compete with the $20 disc but, they cannot do a combo Disc, some of their players cannot upscale SD DVDs and price matching with a combo would not do it, why would the consumer pay the same for half the product?

2 There are more then one studio that would like to stop splitting their costs and efforts and completely dominate the DVD market worldwide, if this choice if explained to them correctly, Would you prefer having a small segment of the over $20 billionWorldwide market or have the total $20 billionmarket to yourself with no competion?
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Old 04-02-2007, 12:50 PM   #59
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The only one that I dispute is:
1 BR can compete with the $20 disc but, they cannot do a combo Disc, some of their players cannot upscale SD DVDs and price matching with a combo would not do it, why would the consumer pay the same for half the product?
Many customers won't care if the HD version is included since they don't have a HD player. Others may not care that the DVD side is included since they only plan to watch it in HD. And of course others would care, and would buy the combo disk. Like I also said, the combo disk won't help if the title is only available in BR. All in all, a cheap combo disk would be attractive to the customer, but it wouldn't be the deathknell of BR.

2 There are more then one studio that would like to stop splitting their costs and efforts and completely dominate the DVD market worldwide, if this choice if explained to them correctly, Would you prefer having a small segment of the over $20 billionWorldwide market or have the total $20 billionmarket to yourself with no competion?
If the studios are that concerned about having the HD market split, the easiest way to end the format war is for Universal to support BR exclusively. Pricing their DVDs lower would not automatically win the war, and a studio that already supports both formats would be just as likely to price their BR disks lower as their HD-DVD version. If a studio truly wanted to hurt the BR camp and ensure that HD-DVD won, they would do more damage by just deciding to support HD-DVD exclusively. So far they haven't decided to do that, so I don't see why they would consider doing some half-measure, that would just result in them losing money.
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Old 04-02-2007, 01:06 PM   #60
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fryet:

Your #2 (no pun intended ): "So far they haven't decided to do that, so I don't see why they would consider doing some half-measure, that would just result in them losing money."


This response could be applied to Universal ALSO not wanting to do this either. Universal has it's reasons for backing HD DVD that we do not know. Ditto for Fox & Disney.

I WILL be watching Spiderman3 when it comes out because I own both formats, but even if I didn't I would still watch it. I would just watch it as upscaled SD with my excellent upscaling HD DVD player.

Most of the BD players do not upscale SD DVDs because MOST of the BD players are PS3 which do not. This means they will not see King Kong, etc from Universal (and Weinstien, Studio Canal, etc) even upscaled.

ps. There are actually one more studio supporting HD DVD compared to BD but most of them are minor studios just for the record.
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