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Scenario of how HD DVD wins format war quickly!

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Old 04-02-2007, 01:12 PM   #61
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Quote:
Originally Posted by unotis View Post
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?
Ok we need to clarify the numbers: For 2005 (2006 has not been released yet but the feeling is a 2% increase):

IN THE USA ONLY:

16.5 Billion Dollars in DVD Sales

8.5 Billion Dollars in DVD Rentals

Total DVD revenue for 2005 for the USA = $25 Billion

Can't find worldwide sales.
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Old 04-02-2007, 02:02 PM   #62
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Quote:
Originally Posted by unotis View Post
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?
What Blu-ray players don't upconvert. The only one I was aware of that doesn't was the PS3, but the only one I have used to upconvert is the one I own.

If you guys are willing to pay so much for DVD's, I sure wish you would bid on some of my eBay auctions, I am trying to thin out my collection and rarely get over $5 including shipping and often get no bids at all.

You are all united, as usual with you guys, logic and realism never gets in the way so you know my prediction, the single inventory HD DVD/DVD combo won't be tried and if it is, won't be successful. I know for certain, you will revel in seeing me proven wrong, so I am setting myself up for you all to have some fun. As far as I know there have not been any single inventory combos yet, every one also has a standard DVD release, but if that is wrong, please let me know that as well. You guys are a hoot!

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Old 04-02-2007, 02:29 PM   #63
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As yet I don't dislike you enough to revel in having you proved wrong.

That's really funny about you thinking how "united" we are. I wish.
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Old 04-02-2007, 02:37 PM   #64
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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.
OK, sorry but I feel the need to do some sarcasm here. (: So when I watch a DVD in a PS3 on a 1080p TV, the TV magically converts to 480 lines of resolution (or maybe it just shows the movie in the corner of the screen)? The obvious answer is no, you will still be able to watch the DVD on your TV whether it is upconverted by the player or not. Your TV will automatically upconvert the image that it receives, although in all fairness some TVs are better than others.

Based on your logic, a person should not buy either format, but just stick with an upconverting DVD player. If a person has gone through the trouble to buy a High Def player (like HD-DVD), then they aren't going to be satisfied watching upconverted movies - they want true High Def. For that reason, studio exclusivity has continued to be a selling point for both formats, and losing that would probably be the nail in the coffin if one side could remain exclusive, but the other had no major exclusive titles.
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Old 04-02-2007, 02:54 PM   #65
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I fully agree with you and I guess I left the " " off of the original post to let you know I was mostly joking about most BD players not upscaling because most are the PS3 which does not scale.

One thing though is that not all HDTVs upscale. Only fixed pixel displays do and there are a lot of CRT based HDTVs out there since they were the ONLY HDTVs for the first few years. Granted almost all new HDTVs ARE fixed pixel now be it LCD, plasma, LCOS, DLP, etc. but I would guess that probably 30-40% still CRT based.

Some of those higher end (then) CRTs can upscale to 1080i but I think those are fairly rare. That is why a lot of people are upset that the PS3 could not upscale the PS3 games that are 720p resolution which is most of the ones I own/have looked at.
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Old 04-02-2007, 02:57 PM   #66
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I'll try to put this as clearly as I can.

1. When I say for HD DVD to win quickly, Toshiba would have to convince the studios producing HD DVDs to only make combo discs, (especially for the new releases) price them agressively so they cost no more then a standard SD DVD would.

Sure they would forgo some intial profits for a short time (they would not lose money on the discs themselves) in order to change over the format from the present SD DVD to the improved HD DVD format.

They know it will eventually go there because eventually everyone will end up with a HDTV (it is going to happen sooner or later).

To cause an easy shift to the new format for the consumer and to not cause any backlash from them, make it a no brainer in choosing the DVD, the only thing different for the consumer is they could watch every DVD they buy without fear of it becoming obsolete.

2. Why should they choose HD DVD instead of Blu-Ray?
Because right now it would be a much easier transition for both manufacturer and consumer in so far as cost.

One of the most popular Blu-ray DVD players lacks the ability to upconvert the present SD DVDs so many people already own ( PS3?) and the others don't have the ability to use the lossless audio codecs yet.

All HD DVD players can or are upgradeable to do so ( I'm mostly talking about the stand-alone players).

The greater capacity of the discs is no longer a selling point for Blu-Ray (HD DVD is getting a larger disc approved)

Copy protection is no longer a selling point for Blu-Ray (hackers have cracked the code already).

The Players and hardware are less expensive for HD DVD, sure they are losing money right now on the hardware but, when the war is over and they've won, economy of scale will quickly make up for their early losses.

The format war is good for the consumer in regards to pricing being forced down but it is not good for the industry.

For them to help the transition (which will happen) it would be far less costly and quicker to help HD DVD to win and end it in order to get back to business as usual for them all.

Last edited by unotis; 04-02-2007 at 03:08 PM..
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Old 04-02-2007, 03:18 PM   #67
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Originally Posted by Chris Gerhard View Post
What Blu-ray players don't upconvert. The only one I was aware of that doesn't was the PS3, but the only one I have used to upconvert is the one I own.

If you guys are willing to pay so much for DVD's, I sure wish you would bid on some of my eBay auctions, I am trying to thin out my collection and rarely get over $5 including shipping and often get no bids at all.

You are all united, as usual with you guys, logic and realism never gets in the way so you know my prediction, the single inventory HD DVD/DVD combo won't be tried and if it is, won't be successful. I know for certain, you will revel in seeing me proven wrong, so I am setting myself up for you all to have some fun. As far as I know there have not been any single inventory combos yet, every one also has a standard DVD release, but if that is wrong, please let me know that as well. You guys are a hoot!

Stop picking and choosing what you read, I said some of the Blu-Ray players and you know that you consider the PS3 to be the example of a Blu-Ray player.

If in the future you want ot leave out that game console from discussions of Blu-Ray players just let us know and I'm sure we will do that just for you.

And also, You're the one who kept asking for someone to show a way that HD DVD could quickly win the format war!

I did with this thread, I did not say it had to happen this way anymore then your fantasy of Universal throwing in the towel and saying "We give up Blu-Ray's won"! has to happen.

So if you want to cry do it in your bathroom, although I do enjoy you're little tantrums AND YOU ARE A HOOT!

Last edited by unotis; 04-02-2007 at 03:20 PM..
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Old 04-02-2007, 03:30 PM   #68
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Unotis in regards to point #1, we don't seem to be communicating too well, so how about if we try something different. You tell me what you think I am saying, and I will tell you what you are saying.

So for #1, you are saying that if Toshiba can convince all HD-DVD studios to release combo disks at the same price as DVD disks, they will win the format war. The way that Toshiba will convince them to offer those discs (at a potential loss of profit since they are currently selling them at $5 more) will be the future profits that they will get when BR fails and they can sell to the whole HD market.

In regards to #2, I don't think I need to summarize that, but here is my rebuttal:

At the current moment, it would be easier for BR to win the format war than for HD-DVD. Only one thing needs to happen. Universal just needs to announce that all future movies will be released only in BR format. Consumer will then realize that the player that will play all (or almost all since some small studios like porn are HD-DVD only) is the BR format, and they will only have a limited selection of titles if they choose HD-DVD. Universal going this route would cost them nothing - they could still sell their HD movies for as much money as they like. On the other hand, if they did try your approach, there would be no guarantee that the 2 items you listed would guarantee HD-DVD winning the war. With the PS3 out there, there will continue to be a large market of potential buyers even if HD-DVD was winning on all other fronts. To top it off, BR is currently winning in total HD movie sales, so it would be harder to knock them off than it would be to knock HD-DVD.

So in summary, if I am Universal, here is what I am looking at:

If I try to ensure HD-DVD wins:
  • I suffer a profit loss on combo disks
  • No guarantee that I will be able to kill off BR just by selling cheaper combo disks
  • I cannot sell my product to owners of the PS3 who do not also own another High Def player

If I try to ensure BR wins:
  • I do not suffer any loss of money, in fact I get access to all of the owners of the PS3.
  • I could guarantee the end of the format war by switching to BR support.

If you were a corporate exec, which would you chose? Either way you supposedly can end the format war, but which way is better for you?

Last edited by fryet; 04-02-2007 at 03:33 PM..
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Old 04-02-2007, 03:36 PM   #69
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You do not think a lot of HD DVD owners being pissed at Universal not even going neutral but becoming BD exclusive will make a lot of HD DVD owners not buy their movies in the future?

If Universal went to BD only they would lose a lot of sales for HD DVD movies because they wouldn't sell them by your scenario. I bet they lose a lot more revenue that way than taking less profit on the combos pricing them at new release SD DVD prices. I believe I read somewhere that the additonal cost of combos still keeps costs very close to DL HD DVD & SL BD25 discs. If I recall it was less than $1.00 per disc.

Maybe someone who remembers better or can provide a link so Chris does not have to do any research himself at all.
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Old 04-02-2007, 03:40 PM   #70
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If I was Universal I would try to have my format win the war just as much as if I was Ford... I wouldn't stop making Fords because the competition is costly and decide I'll just re-tool and start making Chevys.

Wouldn't that be smarter, after all Ford is in business to make profit isn't it?

But, would it be smart to base that decision on just 2 months of sales when they are right now coming back into parity?

I guess I don't understand your point?

And I was not talking about them winning and having the entire HD market, I was referring to them having the entire DVD market after the transition.

Why would the company that produces and supports one format exclusively, decide to not try and win the format war and take all the money from the market home to their vaults?

I'm not trying to be a smart ass but the thread is Scenerio of how HD DVD wins format war quickly! not how they could find a way to lose more quickly?

Last edited by unotis; 04-02-2007 at 03:51 PM..
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Old 04-02-2007, 03:49 PM   #71
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Quote:
Originally Posted by Chris Gerhard View Post
You are all united, as usual with you guys, logic and realism never gets in the way so you know my prediction, the single inventory HD DVD/DVD combo won't be tried and if it is, won't be successful.
I'm curious as to why you think it wouldn't be successful? Right now, a new movie comes out and its released as follows:

Happy Feet
DVD - $19.99
Blu-Ray - $29.99
HD-DVD Combo - $34.99

So if we eliminated DVD and went with the following:

Blu-Ray - $29.99
HD-DVD Combo - $19.99

How would this not be successful? All those that would buy DVD now end up with HD-DVD. If this was done with all DVD's that are made by HD-DVD studios, there would be millions of non-HD-DVD player owners with HD-DVD's. So when they decide to upgrade, what do you think they'd buy?
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Old 04-02-2007, 03:59 PM   #72
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I'll make one observation:

Does it seem that the rebuttals I've been getting to my Scenerio are based on very short term happenings in the war?

Like Blu-Ray being temporally ahead in sales of DVDs and the fantasy of Universal deciding to chuck it and join the competiton.

Or my favorite... that the consumer will not pay the same for a combo DVD as a regular SD DVD (which they have been paying the same for 10 years) because they should be able buy a single sided( soon to be obsolete product) for less?
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Old 04-02-2007, 04:03 PM   #73
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Quote:
Originally Posted by mshulman View Post
I'm curious as to why you think it wouldn't be successful? Right now, a new movie comes out and its released as follows:

Happy Feet
DVD - $19.99
Blu-Ray - $29.99
HD-DVD Combo - $34.99

So if we eliminated DVD and went with the following:

Blu-Ray - $29.99
HD-DVD Combo - $19.99

How would this not be successful? All those that would buy DVD now end up with HD-DVD. If this was done with all DVD's that are made by HD-DVD studios, there would be millions of non-HD-DVD player owners with HD-DVD's. So when they decide to upgrade, what do you think they'd buy?
Excellent post!

Finally someone completely understanding where I was going with the scenerio in this thread!
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Old 04-02-2007, 05:01 PM   #74
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PFC - You do have a point. The safer thing for Universal would be to go Neutral and support both formats, then if they wanted to they could support BR exclusively after they have built up their BR library. Regardless, by just going neutral, they would still be delivering victory to BR, since from a content perspective the main reason to choose HD-DVD over BR is Universal movies.

Unotis:
If I was Universal I would try to have my format win the war just as much as if I was Ford... I wouldn't stop making Fords because the competition is costly and decide I'll just re-tool and start making Chevys.

The problem with this analogy is that Universal isn't making cars, they are making something that goes into the interior of the car. Whether HD-DVD or BR wins, Universal will still be selling their movies. For them to support one over the other has to give them a financial benefit. So when you are suggesting that they lose money to ensure that Chevy wins, it is contradictory for the reason they have created movies in the first place - to make money.

Quote:
And I was not talking about them winning and having the entire HD market, I was referring to them having the entire DVD market after the transition.
OK, you have lost me here. They already have the entire DVD market. Anyone with a DVD player can play their DVD movies, and they release all of their new movies on DVD. Them selling their combo disks at less profit is not going to increase their DVD sales numbers. People aren't going to say, "Well, I wasn't going to buy this movie, but since it is on a combo disk, I will buy it." People buy movies because they want to watch it. If anything, high costs discourage people from buying a movie.

Quote:
Why would the company that produces and supports one format exclusively, decide to not try and win the format war and take all the money from the market home to their vaults?
Because studios don't make more money if one side or the other wins the format war. Regardless of which side wins, they will continue to make money as they sell to the winning side. The only benefit that they can get is if they can avoid the costs of producing for both sides, i.e. they benefit if one side wins as opposed to a long-term dual format race.
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Old 04-02-2007, 05:09 PM   #75
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Quote:
Originally Posted by mshulman View Post
I'm curious as to why you think it wouldn't be successful? Right now, a new movie comes out and its released as follows:

Happy Feet
DVD - $19.99
Blu-Ray - $29.99
HD-DVD Combo - $34.99

So if we eliminated DVD and went with the following:

Blu-Ray - $29.99
HD-DVD Combo - $19.99

How would this not be successful? All those that would buy DVD now end up with HD-DVD. If this was done with all DVD's that are made by HD-DVD studios, there would be millions of non-HD-DVD player owners with HD-DVD's. So when they decide to upgrade, what do you think they'd buy?
It's simple, you as a movie studio make more money selling the DVD for $20 and the BR DVD for $30 to the double dippers. Or if they choose not to dip twice, they buy the $30 disk instead of the $20 disk. Movie studios LIKE higher prices. Why sell 2 different formats for $20 when you can sell them separately for more money? That is probably the reason why the combo disks are priced $5 more, they are sacrificing the ability to sell you a $30 HD-DVD movie in the future, so they want some immediate compensation now.

No one is arguing that customers would prefer combo-disks at the same price as conventional DVDs. No one is arguing that if studios did that, it would help HD-DVD compete in the format war. What we are arguing is that the studios would ever choose to do so. There is no financial benefit for them to sell their product for less. The only studio incented to suffer a profit-loss in the format war is Sony Studios, and they are on the side of BR. Until you can show how the studios will make more money by selling their product for less, this will never happen.
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