Analysts: Blu-ray's Not Home Free
Sony won the format battle. Can it win the war for consumers' wallets?
Feb. 20, 2008 — -- So it finally happened. In the two-way battle for the high-definition video player format, Toshiba gave up on HD DVD and Sony is crowing. But should it be?
According to analysts, just because Sony's Blu-ray prevailed doesn't mean it's won the war for consumers' eyeballs and wallets.
After a wave of increased support for the Blu-ray format over the last two months, Toshiba announced Tuesday that it would no longer make or develop HD DVD players.
"We concluded that a swift decision would be best," Toshiba President Atsutoshi Nishida told reporters.
HD DVD's slide began in January when Warner Bros. made a surprise announcement — at least to Toshiba — that it would release its high-definition videos on Blu-ray. In the following weeks, Netflix, Best Buy and most notably Wal-Mart announced that they were dropping HD DVD products.
Not surprisingly, Sony viewed Toshiba's withdrawal as a clear win, the company told ABCNews.com in an e-mailed statement.
"Overwhelming support from all the relevant industries, including Hollywood studios, consumer electronics and IT companies, retailers and video rental stores is clear proof that consumers have chosen Blu-ray as the next generation optical disc format," Sony said. "We believe that a single format will benefit both consumers and the industry, and will accelerate the expansion of the market. Blu-ray has been and will continue to be a core part of Sony's high-definition strategy."
With strong studio and retailer support, Sony's Blu-ray disc is now the only offering for high definition DVD. But that fact alone won't push it to the top in terms of consumer acceptance, according to analysts.
Consumer support for next-generation DVD players, for both Blu-ray and HD DVD, is small at best. Less than 1 million of the new DVD players – both HD DVD and Blu-ray — were sold last year, according to Ross Rubin, director of industry analysis for consumer technology at the NPD Group. (NPD declined to divulge the sales of HD DVD and Blu-ray players individually.) Compare that to sales of 10 million standard home DVD players in 2007.
