Article: Waiting on Toshiba

[Tekman]

LAS VEGAS—For Universal Studios and Paramount Pictures, the waiting has begun: waiting to see what Toshiba does in the wake of Warner Bros.’ defection to the Blu-ray camp; waiting to see what happens with HD DVD hardware sales; waiting to see if consumers notice.

Here at CES, Toshiba continued to make brave noises about soldiering on. But for the studios in the HD DVD camp, it’s time to make serious contingency plans.

“There’s still a chance,” one HD DVD studio exec told Media Wonk. “But it’s a pretty slim chance.”
Should Toshiba decide to fold its tent, of course, the decision is made for them. They have to go Blu-ray. Even if Toshiba doesn’t fold its tent but hardware sales go flat, Universal and Paramount will need to go with the side that’s growing. That’s business.

But they shouldn’t expect any break on the royalties from Sony. That ship sailed with the Warner tide.
HD DVD backers at CES expressed deep frustration over Warner’s move, not only because it could mean their side looses but because they still have grave doubts about Blu-ray.

“None of the facts have changed,” one studio exec said. “The problems that existed [with Blu-ray] in December still exist. They didn’t go away because Warner changed sides.”

Among those, in the exec’s view, are disc manufacturing constraints, high costs and high consumer prices.
“I think the days of falling prices are over,” another studio exec said. “The hardware is going to be $300, and discs are going to be $27. We’ll see if the consumer buys it.”

They also don’t buy Warner’s stated reason for its move: a purported clear consumer preference for Blu-ray evident in sales data and consumer research from the fourth quarter.

“What consumers?” one HD DVD exec asked, sarcastically. “The numbers aren’t there to show a preference.”

One non-studio HD DVD backer offered a bet that, come Dec. 31, 2008, the numbers still won’t be there for Blu-ray, even if Toshiba were to fold tomorrow.

Media Wonk didn’t take the bet, but it’s still on the table

http://www.contentagenda.com/blog/15...800019780.html