Why last week's fire sale was a mistake...

[bazie]

I don't think you can be so critical of this.

What was accomplished was
1) give a large increase in the standalone sales so people would have machines to buy movies for over the christmas season. And this worked with apparently 90k sold over teh weekend.

2) Drive awareness of the format. This also worked as the sale spread like wildfire all over the internet and from mouth to mouth...as is evidenced by the fact they pushed 90k sales in a weekend which is HUGE for the console market.

So now the prices are back up to the (previously record low) of 199.....people who are now aware of HDDVD and aware that it has come down in price will still look at 199 and see it as half the cost of a bluray player and buy it.

[Oblivion]

Originally Posted by JumboJoe

Don't give in to the deseatful jedi mind trick campaign of HD-DVD. They are trying to confuse our minds and befuddle us into disdoubt. The mind is where this battle will be won-- you must believe!!!

I believe in Sony and BlueRay!!!

Think positive thoughts and get positive results.

I agree with that; but it does concern me because for the first time this year I have started to see some 'HD DVD may win this' type articles Fringe writers of course but still worrying. Blu is the better format though so I'm confident we'll prevail in the end.

[PatC.]

The firesale was reportedly driven by Wal-Mart, not Toshiba. As usual the Mart was trying to corner the market on low prices without regard to what it would do to the manufacturer or consumer. The rush was on and the other stores had to compete. There will always be a market for the lowest price but that will not decide the format war. The camps are totally entrenched and will end up like Windows and Mac with some preferring one over the other for a long time. Blu-ray seems to have more friends than hd so I don't see it going away no matter how many hd players are sold at $98.

[scook]

I wouldnt even call it a desperate move, I would call it pathetic. HD Dud knows there going down hard so they paniced and slipped up. Like people have said before when there losing money on players they have to make it back on disc sales BUT most of the people that are purchasing these are those HD Fanboys that already have players which will not increase disc sales or those consumers that know absolutely NOTHING about HD content which will result in 1 or two purchases and regular DVD sales again not helping Toshiba. The end is near I can promise you I will enjoy watching each and every blow that Blu will dish out as HD Dud slowly crumbles.

[richteer]

Originally Posted by JumboJoe

Don't give in to the deseatful jedi mind trick campaign of HD-DVD. They are trying to confuse our minds and befuddle us into disdoubt. The mind is where this battle will be won-- you must believe!!!

I believe in Sony and BlueRay!!!

Agreed about the Jedi mind trick--but it's Blu-ray, not BlueRay!

[mdm1699]

Originally Posted by RobertB

So...how many of the A2 buyers are current 360 HD-DVD addon owners?

I just cant for the life of me see how this firesale can make much of a dent in the HD market. People who wait to buy a player for 100 bucks just wont be blowing 100s of dollars every week on movies. No way...

I don't think that anyone considered the fact that a lot of these players would be purchased as second or third units within a single household. This does not lead to more sales for the HD-DVD format. Also, no one considered that they would be used primarily for Upconverting DVDs. Be careful what you wish for. The number sold is not as impressive when you analyze the effects now that the dust has settled. Has anyone checked ebay lately? Seems most bought them for the free movies.

[mikem471]

I think the fire sale will really sting the "lesser-informed" consumers who purchased those garbage players once their friends and neighbors start talking about "this great 1080p tv I just got".........."oh, sorry!"

[bazie]

Originally Posted by scook

most of the people that are purchasing these are those HD Fanboys that already have players

I definitely don't agree with that. Sure some of the HDDVD fan boys will pick up a second one, but of the 90k i am sure teh vast majority of them will be either new customers, of HDDVD buying for family members...so....new customers.

Remember most people arn't like the select few that frequent HDM forums and spend all their money on home theater.

[spam.curitiba]

Originally Posted by bazie

I don't think you can be so critical of this.

What was accomplished was
1) give a large increase in the standalone sales so people would have machines to buy movies for over the christmas season. And this worked with apparently 90k sold over teh weekend.

2) Drive awareness of the format. This also worked as the sale spread like wildfire all over the internet and from mouth to mouth...as is evidenced by the fact they pushed 90k sales in a weekend which is HUGE for the console market.

So now the prices are back up to the (previously record low) of 199.....people who are now aware of HDDVD and aware that it has come down in price will still look at 199 and see it as half the cost of a bluray player and buy it.

First off...just from reading forums it seems like alot of CURRENT hd-dvd owners went out and got a second player. So I can bet that at least 30 to 40 percent of those players sold if not even higher are to current hd dvd player owners.

I talked to a guy at best buy that has seen people pissed they didn't have anymore and weren't about to buy a hd dvd player at 199 when they can wait a little longer and get one for 99. He went on to say that even with the hd dvd firesale they still sell more blu players and movies.

It seems like PS3 owners are getting more aware of the blu-ray functionality in their game system and are now starting to pick up movies....if you don't believe me just look at the sales numbers on amazon for this week.

I am sorry but I will take 4million ps3 owners over 90k err shall I say 50k new cheap ass shopping hd dvd owners anyday. Plus those 50k new hd dvd owners will buy how many hd dvd's in a year at 30 bucks a pop? That's right maybe 1 or 2.

[spam.curitiba]

Originally Posted by bazie

I definitely don't agree with that. Sure some of the HDDVD fan boys will pick up a second one, but of the 90k i am sure teh vast majority of them will be either new customers, of HDDVD buying for family members...so....new customers.

Remember most people arn't like the select few that frequent HDM forums and spend all their money on home theater.

wrong. I bet at least 40% were already hd dvd owners...especially since over at AV$ every single hd dvd fanboy said they got one....

[TauRus]

[QUOTE=stockstar1138;328177]toshiba at one point is going to have to look at this and say, we can't keep doing this.QUOTE]

As much as we want this to happen soon, people need to realize that Toshiba is a large corporation with some serious resources to keep losing investment if they are still hopeful of any success. Also it has the alleged MS support as well. Therefore, I think they will keep pushing their format a for a while. At this point Toshiba probably is not hoping the HD DVD format will prevail, rather they are probably just creating conditions for both formats to get limited to some niche markets. That is why we cannot count on Toshiba folding any time soon, instead we need to continue our support for Blu.
I also think Sony is quietly moving in the right direction - instead of continuous rivalry, they are trying to further engage Toshiba in joint businesses. The recent deal related to Cell development falls nicely into this picture. Hopefully, at some point Toshiba will have the sufficient revenue stream from Blu-ray to consider not wasting resources on HD DVD. But all of that will take time, this is not something we will see happening in a month or so.

[ArkGuy]

Originally Posted by Blu-Ray Buckeye

I would also add that people have to factor in how many of the 90k units were sold to existing HD-DVD owners.... my guess is more than half. Think about it this way: how many PS3 or blu-ray owners would consider getting another BD player if it were below $200? How about adding a 2nd PS3 so you wouldn't have to move it between rooms if it were say $249? That's right, you'd be first in line. Trust me, most of these were sold to existing HD-DVders.

Of those sold to new, "unique" HD-DVD users, how many bought it not understanding the need to buy HD-DVDs at all and only plan to use them to make their existing DVDs look better? Don't say none, because you know it's some.

Of the remaining folks who are truly unique, new buyers and who do understand HD-DVD disc and such... how many bought it because it was very cheap and simply won't become big spenders all of a sudden. You always have a major problem when you try to win on being cheap---------> but your actual media are very expensive. Think about it in real terms and in regard to real economics of the Walmart customer. You have a cheap console but media twice as high as standard DVDs. What is PS3 or 360 suddenly started selling at $199 but they made their games $100+. Would you really boost s/w sales?

I've wondered the same thing and would love to see a breakout of these three groups of buyers:

1) brand new Hi-def player buyers
2) existing HD owners
3) existing BD owners

I'd say 100% of the latter two groups and a signicant portion of the first knew exactly what they were getting, despite what some here claim.

Having said that, even of true, that would not likely translate into a huge spike in HD-DVD disk sales. Group 1 folks would obviously buy some, maybe more than what some of you who sneer at the "Wal-Mart-J6P crowd" think. I can envision people who, for whatever reason, weren't interested in - or able to - paying upwards of $400 for a player, taking the plundge at $98, then buying a movie every payday or so.

However, total sales to existing HD owners (GRoup 2) might be very little. I can see them buying a second unit, cheap, for matters of convenience, like having a player in the bedroom or game room. THey could be well aware of the limitations of 1080i, but might have, say, a 36" or 40" 720p HD television and don't care. Plus, as noted by several, it could be used as a good upconverting DVD player in those locations. I realize several of you have platinum plated home theaters in several rooms of your houses but not everyone does.

The third group (BD owners) might not buy a lot of movies over time, picking the freebees and getting others over time from HD exclusive studios while continuing to build their BD collection.

In short, I can easily imagine a spike in A2/AA3 sales not translating into a corresponding increase in media sales. Some but not huge. It just depends on who is buying these players and I'm not sure even Toshiba knows the answer to that yet.

[dialog_gvf]

Originally Posted by WickyWoo

2- A single company sells those blades for about $1.50 each retail price. Total cost of manufacture is pennies each. Toshiba on the other hand at best makes a nickle a disc. At a $170 loss per deck, they have to sell 3400 discs for every one of those decks to make it back.

A 3400 attach rate to break even on the simple model.

Add in the (continuing) R&D, advertising, studio payoff, and disc giveaway costs, and then how many per deck do they need to sell?

Gary

[bhampton]

The sale wasn't a mistake.

Almost no one will be foolish enough to buy into HD DUD in 2008 so all this crap has to be pushed though the inventory chain before Toshiba has to pay to have it recycled.

-Brian

[bazie]

Originally Posted by spam.curitiba

First off...just from reading forums it seems like alot of CURRENT hd-dvd owners went out and got a second player. So I can bet that at least 30 to 40 percent of those players sold if not even higher are to current hd dvd player owners.

I talked to a guy at best buy that has seen people pissed they didn't have anymore and weren't about to buy a hd dvd player at 199 when they can wait a little longer and get one for 99. He went on to say that even with the hd dvd firesale they still sell more blu players and movies.

It seems like PS3 owners are getting more aware of the blu-ray functionality in their game system and are now starting to pick up movies....if you don't believe me just look at the sales numbers on amazon for this week.

I am sorry but I will take 4million ps3 owners over 90k err shall I say 50k new cheap ass shopping hd dvd owners anyday. Plus those 50k new hd dvd owners will buy how many hd dvd's in a year at 30 bucks a pop? That's right maybe 1 or 2.

No way 40% of those people were buying repeats. Forums like these and avs do NOT represent the average person. I would give the number at 10% at best.

The anecdote about your personal best buy not withstanding, I am pretty sure that bluray sold far less then 90k over the weekend in hardware sales (Including the ps3 and its low attach rate). And its true some may be pissed about the higher price. But if they care so much about the 100 dollar price jump to 199 will they really want to spend the 300 dollar price jump to the ps3? Such customers won't get into HDM at all so who cares about them.

I agree the big marketing campaign will hopefully help inform customers of the ps3. It does remain to be seen how much these customers will care after they are informed and whether being informed translates into software sales. Also what do you mean about looking at the amazon rankings? The disney movies are all doing smoking but i don't think you can correlate this at all with people being more aware of the ps3's bluray capabilities.

And finally, you can ridicule the attach rates on the A2, but i think they will still be better then for the ps3.

Anyways, stop making me defend HDDVD The point is this sale will be somewhat effective and to be completely dismissive of it is a little silly imo. I WANT to point out reasons why it is completely inconsequential and is a sign that bluray will win out, since that is what I want to happen.

[esteban2]

Originally Posted by Steelmaker

I see this as a complete act of desparation from Toshiba and a last ditch effort to gain support from the movie studios. They will not succeed and by this time next year, this war will be over.

I suspect so, too. Toshiba has tried many things, but the bottom line is that BD continues to out-sell HD-DVD where it counts most - disc sales. It will still lead in disc sales after this fire-sale too.

All BD has to do is continue to lead in disc sales and it will win the war.

[bazie]

Originally Posted by dialog_gvf

A 3400 attach rate to break even on the simple model.

Add in the (continuing) R&D, advertising, studio payoff, and disc giveaway costs, and then how many per deck do they need to sell?

Gary

The guy's estimate of toshiba making only 5 cents per disk is more likely an underestimate. If royalties are only 5 cents a disk...then think about the BDA...they split the royalties amongst several different companies....so each company gets what only 1 cent per disk? I think the royalities have to be much higher then that.

Also, toshiba is hoping to recoup a lot of that money back on hardware sales (if HDDVD were to win). With economies of scale, there is no reason why they can't profit off cheap HDDVD players and if they have manipulated it so that they are the sole manufacture out there there is al ot of money in hardware sales to be made even at cheap prices.

[mikem471]

Originally Posted by spam.curitiba

wrong. I bet at least 40% were already hd dvd owners...especially since over at AV$ every single hd dvd fanboy said they got one....

40%???? Please, let's not get carried away there. That's crazy to think that almost half of those players moved were hd-dvd owners picking up a 2nd player.

[JTK]

Probably a bit early to gauge, but thus far I'm not seeing any signifigant software sales boosts to go along with these firesaled A2's.

In the end, it's still about content, folks.

These 90,000 A2's that a lot of DUDers bought for themselves as replacements or additional players still aren't going to play all the great, exclusive content that we're seeing now starting with the Spideys on through into January.

Content is king.

[SpikesBluBlooded]

Originally Posted by Oblivion

Not sure I agree with that theory - Toshiba is the only major HD DVD producer but we and they know that and it isn't going to change overnight. What the firesale does do though is entrench the brand. The latest figures - 100,000 standalones and 210,000 xbox addons in the last month - will account for 1 million+ disks before Xmas assuming 3 or 4 disk attach rates. That's alot and will encourage Blu only producers to add HD DVD to their devices to ensure sales. And I think in a dual format world we'll lose; studios will be drawn to the (alleged) cheaper production of HD DUD.

OK, you need to check your figures: HD DVDs cost roughly the same to produce as Blu-ray discs. That's also why they're both comparably priced. Second, your assumed attach rate is ignoring what has already been stated repeatedly in this and other threads: J6P isn't going to want to shell out $25+ for a HD DVD when he's only paid $100 for the player. I agree with the general consensus that it was purchased more as an upconverting DVD player or a secondary player in the homes of those that already had one.

The numbers over the past year show the clear advantage that Blu-ray has in disc sales worldwide and stateside, and with the new 40GB PS3 available, there will be many more sales for the holiday season to bring up the number of Blu-ray players in the hands of consumers. Keep in mind that THOSE purchasers are used to paying $50+ for the software that accompanies their hardware, and $25 for Hi-Def movies isn't all that bad. I think that's one of the reasons why sales lead HD DVD so much...

Yes, there will be an increase in HD DVD purchases, but no where near what I think they're hoping for. And with the title releases on Blu between now and the rest of the year, I think you can expect to see the sales gap between the two to only widen.