It's a mdm mdm mdm mdm world

[mdm1699]

I have come to the realization that the outcome of this war depends on what Warner does, at this point. Even then, HD-DVD will be around through 2008. I read this forum as well as AVS. I am honestly surprised by what I am reading there. The truth is that a lot of HD-DVDers are now BLU-RAY owners, since the recent price cuts. The same is true of BLU-RAY supporters. They became dual-format with the low-priced Toshiba sales. This is the holidays and we are in a tough economic environment. The average consumer is not as passionate as we are and couldn't care less about loyalties to either format. Personally, I will wait until July 2008. This war has come down to 'economy of scale'. The HDM market is too small to effectively outgrow HD-DVD. Studio support is the only thing that can effectively change that either way. We are all torn between passion and reason.

[GregBlu5]

Originally Posted by mdm1699

I have come to the realization that the outcome of this war depends on what Warner does, at this point. Even then, HD-DVD will be around through 2008. I read this forum as well as AVS. I am honestly surprised by what I am reading there. The truth is that a lot of HD-DVDers are now BLU-RAY owners, since the recent price cuts. The same is true of BLU-RAY supporters. They became dual-format with the low-priced Toshiba sales. This is the holidays and we are in a tough economic environment. The average consumer is not as passionate as we are and couldn't care less about loyalties to either format. Personally, I will wait until July 2008. This war has come down to 'economy of scale'. The HDM market is too small to effectively outgrow HD-DVD. Studio support is the only thing that can effectively change that either way. We are all torn between passion and reason.

I believe that you are quite right about Warners. I think the retailers are beginning--at Target, Best Buy, some Walmarts--to devote more space and energy and resources to Blu, where it's becoming quite noticable. So, if another studio moves to Blu exclusive, it could have the cascading effect of causing more retailers to either devote even more space to Blu or simply not carry HD altogether. If you don't have as much product from one format vs the other, you don't need to devote the floor and shelf space to that format. That's what accelerates the downward spiral of a format on the way out.

Clearly, too, what others have already pointed out, Warners isn't even getting good sales of its classic titles that have been exclusively Red. They were exclusive Red titles, but Warner's is now shy about coming out with those same titles in Blu. Although that may seem bad for Blu on the surface, it does provide Warners with one more reason not to stay format neutral. Red just doesn't sell well enough for them, generally, when it comes to classic titles (those titles *ought* to be Warner's best product--its remarkable catalogue, but not in Red).

-Greg

[greekjgg]

Originally Posted by GregBlu5

I believe that you are quite right about Warners. I think the retailers are beginning--at Target, Best Buy, some Walmarts--to devote more space and energy and resources to Blu, where it's becoming quite noticable. So, if another studio moves to Blu exclusive, it could have the cascading effect of causing more retailers to either devote even more space to Blu or simply not carry HD altogether. If you don't have as much product from one format vs the other, you don't need to devote the floor and shelf space to that format. That's what accelerates the downward spiral of a format on the way out.


-Greg

The bulk of this is good stuff, retailers are getting mad that they have to space both of these products. The problem is that Best Buy is the go to place for HD content. They are doing a lot of business with M$ selling pc's and 360's. They have to be carefull. If warner makes this call, then it is easier for a best buy to "politically" justify to HD Dud why they can't support both formats on their floor space.

[mdm1699]

Originally Posted by GregBlu5

I believe that you are quite right about Warners. I think the retailers are beginning--at Target, Best Buy, some Walmarts--to devote more space and energy and resources to Blu, where it's becoming quite noticable. So, if another studio moves to Blu exclusive, it could have the cascading effect of causing more retailers to either devote even more space to Blu or simply not carry HD altogether. If you don't have as much product from one format vs the other, you don't need to devote the floor and shelf space to that format. That's what accelerates the downward spiral of a format on the way out.

Clearly, too, what others have already pointed out, Warners isn't even getting good sales of its classic titles that have been exclusively Red. They were exclusive Red titles, but Warner's is now shy about coming out with those same titles in Blu. Although that may seem bad for Blu on the surface, it does provide Warners with one more reason not to stay format neutral. Red just doesn't sell well enough for them, generally, when it comes to classic titles (those titles *ought* to be Warner's best product--its remarkable catalogue, but not in Red).

-Greg

Warner stated that their goal was/is to be the leader of HDM sales. It is easier to accomplish that by supporting both formats, given the current size of the HDM market. Also, they can achieve a certain level of scale since they are doing ONE encode for both formats. If you think about it rationally, as opposed to raw emotions and hunch, this makes perfect business sense. Also, they do not shoot themselves in the foot since there is no guarantee that HDM will succeed DVD or that blu will win. I hated them because BB, Matrix, Posiedon, and V are not available on blu. However, I know that it makes perfect business sense for them to keep both formats alive right now.

[mdm1699]

Originally Posted by greekjgg

The bulk of this is good stuff, retailers are getting mad that they have to space both of these products. The problem is that Best Buy is the go to place for HD content. They are doing a lot of business with M$ selling pc's and 360's. They have to be carefull. If warner makes this call, then it is easier for a best buy to "politically" justify to HD Dud why they can't support both formats on their floor space.

We often overlook these sensitive business relationships. Point well taken.

[mdm1699]

Originally Posted by gand41f

My prediction is 62:38 this week. Die Hards neutralized by the DUD giveaways (I can't even keep track of them anymore).

Oh, and I think Warner drops DUD in a couple of months too. It doesn't make sense not to.

enjoy
gandalf

It doesn't make good business sense TO drop DUD, as much as I would love to see that. This would be easy if there was mass adoption. You want to have the biggest slice of a very small pie. Also, people are already suffering with the current credit crunch. There is only so much disposable income to go around these days, especially for a benefit that is not visible/apparent to consumers.

[darinp2]

Originally Posted by mdm1699

Warner stated that their goal was/is to be the leader of HDM sales. It is easier to accomplish that by supporting both formats, given the current size of the HDM market. Also, they can achieve a certain level of scale since they are doing ONE encode for both formats. If you think about it rationally, as opposed to raw emotions and hunch, this makes perfect business sense. Also, they do not shoot themselves in the foot since there is no guarantee that HDM will succeed DVD or that blu will win. I hated them because BB, Matrix, Posiedon, and V are not available on blu. However, I know that it makes perfect business sense for them to keep both formats alive right now.

If you are claiming this will be true come January, then I disagree. Good business sense includes looking at the long term as well as the short term. Much like Disney's vault system where they make more money in the long run by holding things back, even though they could make more money in the short run by just releasing all their big titles again on DVD in a short period. Warner has started to indicate that they realize long term they will be better off with one winner. With two formats with some incompatibilities (HDi and BD-J) releasing on both means having to pay to do certain things for both, which starts to become bigger as more extras are done which require doing 2 versions. Right now I think being neutral makes some sense as they decide which side they are going to go with for the long run and the current situation has put some pressure on the Blu-ray side to push Chinese players out. Once more than one of those is on the market, there won't be as much pressure from the war needed to push Blu-ray player prices down, since those Chinese companies will naturally compete with each other even if Blu-ray is the only format. I don't know which way Warner will go, but I think it is clear to them that they will benefit from one format winning and moving to just one will end up making the most business sense in the long run.

They also can balance the offers they get from each side against the sales and even in the short run going exclusive might make the most business sense, just because the payoffs can dwarf the profits from disc sales at this point. If Warner drops one side, I am sure the other side will be compensating them.

--Darin

[sj001]

Originally Posted by mdm1699

It doesn't make good business sense TO drop DUD, as much as I would love to see that. This would be easy if there was mass adoption. You want to have the biggest slice of a very small pie. Also, people are already suffering with the current credit crunch. There is only so much disposable income to go around these days, especially for a benefit that is not visible/apparent to consumers.

In the short term, maybe not, in the long term, is sure as hell does. There are a ton of people on the fence waiting for the "winner" to emerge, and when it does adoption will take place much faster. If the war perpetuates on and on, it will discourage people, and confuse everyone. I guarantee with them going Blu things will end in less than a year.

[mdm1699]

Originally Posted by darinp2

If you are claiming this will be true come January, then I disagree. Good business sense includes looking at the long term as well as the short term. Much like Disney's vault system where they make more money in the long run by holding things back, even though they could make more money in the short run by just releasing all their big titles again on DVD in a short period. Warner has started to indicate that they realize long term they will be better off with one winner. With two formats with some incompatibilities (HDi and BD-J) releasing on both means having to pay to do certain things for both, which starts to become bigger as more extras are done which require doing 2 versions. Right now I think being neutral makes some sense as they decide which side they are going to go with for the long run and the current situation has put some pressure on the Blu-ray side to push Chinese players out. Once more than one of those is on the market, there won't be as much pressure from the war needed to push Blu-ray player prices down, since those Chinese companies will naturally compete with each other even if Blu-ray is the only format. I don't know which way Warner will go, but I think it is clear to them that they will benefit from one format winning and moving to just one will end up making the most business sense in the long run.

They also can balance the offers they get from each side against the sales and even in the short run going exclusive might make the most business sense, just because the payoffs can dwarf the profits from disc sales at this point. If Warner drops one side, I am sure the other side will be compensating them.

--Darin

Who is going to subsidize the cost of components for the chinese players? You need mass adoption, in order to lower costs of goods that you are selling. If not, you have to sell them at a premium and compete with premium brands. That is NOT going to happen. As for Disney, Fox, and Sony, one can understand their stance because they are financially healthy companies. They can afford to choose, at this moment. Also, there are other variables.

[greekjgg]

Originally Posted by sj001

In the short term, maybe not, in the long term, is sure as hell does. There are a ton of people on the fence waiting for the "winner" to emerge, and when it does adoption will take place much faster. If the war perpetuates on and on, it will discourage people, and confuse everyone. I guarantee with them going Blu things will end in less than a year.

Warner's current situation is much like what most studio's faced a few years back when determining how many widescreen vs non-widescreen DVD's to make.

All studio's saved production costs once they either went straight widescreen or figured out how to get both on one disc, instead of figuring out how many of each would sell.

With warner going blu:

1. Production costs are cheaper because it's just blu
2. They put out a better product (Blu gets shorted on extras because HD cant fit them in)
3. Marketing costs are cheaper because they only have to advertise one
4. They reduce the disc cost because they are only making one but more of it so they can make more money off the disc.
5. It helps create the perception that the studio's have chosen blu, which gets the other 95% of market who are waiting to jump in.

[GregBlu5]

Originally Posted by sj001

In the short term, maybe not, in the long term, is sure as hell does. There are a ton of people on the fence waiting for the "winner" to emerge, and when it does adoption will take place much faster. If the war perpetuates on and on, it will discourage people, and confuse everyone. I guarantee with them going Blu things will end in less than a year.

This has definitely been the problem I've had with several friends and coworkers. They want to wait until someone tells them one side *won* the war and they can now safely buy the winner. A few are beginning to believe that Blu is winning, yet money and the time of year are holding them back. But, for most, they want to buy when there's a winner. Otherwise, they aren't buying either way.

-Greg

[mdm1699]

Originally Posted by sj001

In the short term, maybe not, in the long term, is sure as hell does. There are a ton of people on the fence waiting for the "winner" to emerge, and when it does adoption will take place much faster. If the war perpetuates on and on, it will discourage people, and confuse everyone. I guarantee with them going Blu things will end in less than a year.

Who cares if the war ends and there is no mass adoption. Unfortunately, you need a lot of cash on your books in order to look that far ahead. Just ask Toshiba and MS!

[mdm1699]

Originally Posted by greekjgg

Warner's current situation is much like what most studio's faced a few years back when determining how many widescreen vs non-widescreen DVD's to make.

All studio's saved production costs once they either went straight widescreen or figured out how to get both on one disc, instead of figuring out how many of each would sell.

With warner going blu:

1. Production costs are cheaper because it's just blu - Incremental costs?
2. They put out a better product (Blu gets shorted on extras because HD cant fit them in) - Relative
3. Marketing costs are cheaper because they only have to advertise one - If you already advertise for DVD you can just state another format
4. They reduce the disc cost because they are only making one but more of it so they can make more money off the disc. - With mass adoption
5. It helps create the perception that the studio's have chosen blu, which gets the other 95% of market who are waiting to jump in.

- I believe this one

[darinp2]

Originally Posted by mdm1699

Who is going to subsidize the cost of components for the chinese players? You need mass adoption, in order to lower costs of goods that you are selling. If not, you have to sell them at a premium and compete with premium brands. That is NOT going to happen.

So, what is your stance on this? Are you claiming that the Chinese aren't coming with players at prices closer to HD DVD player prices over the next few months? Neither one of these is going to be at prices people can get DVD players for anytime soon (and maybe not ever because of the royalties for these), but these Chinese Blu-ray players should be closer to the HD DVD player prices. If Warner was to go exclusive to Blu-ray then I think there would be enough of a market for these Chinese players that the components wouldn't have to be subsidized to get within say $50 of HD DVD player prices (although Toshiba could choose to subsidize a ton on each player to try to get the gap back higher). Do you disagree?

--Darin

[mdm1699]

Originally Posted by GregBlu5

This has definitely been the problem I've had with several friends and coworkers. They want to wait until someone tells them one side *won* the war and they can now safely buy the winner. A few are beginning to believe that Blu is winning, yet money and the time of year are holding them back. But, for most, they want to buy when there's a winner. Otherwise, they aren't buying either way.

-Greg

Variables, variables, variables. People have mortgage and living expenses to worry about in this climate. HDM is not exactly a priority.

[richteer]

Originally Posted by mdm1699

Warner stated that their goal was/is to be the leader of HDM sales. It is easier to accomplish that by supporting both formats, given the current size of the HDM market. Also, they can achieve a certain level of scale since they are doing ONE encode for both formats. If you think about it rationally, as opposed to raw emotions and hunch, this makes perfect business sense. Also, they do not shoot themselves in the foot since there is no guarantee that HDM will succeed DVD or that blu will win. I hated them because BB, Matrix, Posiedon, and V are not available on blu. However, I know that it makes perfect business sense for them to keep both formats alive right now.

I respectfully disagree (although in the past I would have agreed). The only way for Warner et al to substantially increase their HDM sales is for the war to be over so that mass adoption can begin. All the time there are two formats the market will not achieve mass adoption. So it is actually in Warner's best business interests to encourage to death of HD DVD, and the best way for them to do that is to go Blu-exclusive.

[mdm1699]

Originally Posted by darinp2

So, what is your stance on this? Are you claiming that the Chinese aren't coming with players at prices closer to HD DVD player prices over the next few months? Neither one of these is going to be at prices people can get DVD players for anytime soon (and maybe not ever because of the royalties for these), but these Chinese Blu-ray players should be closer to the HD DVD player prices. If Warner was to go exclusive to Blu-ray then I think there would be enough of a market for these Chinese players that the components wouldn't have to be subsidized to get within say $50 of HD DVD player prices (although Toshiba could choose to subsidize a ton on each player to try to get the gap back higher). Do you disagree?

--Darin

If you believe this 100%, there is NO reason that current BD players shouldn't be at the price level that you expect of chinese players. It is as if you are saying that Warner is the reason that current players are so expensive.

[mdm1699]

Originally Posted by richteer

I respectfully disagree (although in the past I would have agreed). The only way for Warner et al to substantially increase their HDM sales is for the war to be over so that mass adoption can begin. All the time there are two formats the market will not achieve mass adoption. So it is actually in Warner's best business interests to encourage to death of HD DVD, and the best way for them to do that is to go Blu-exclusive.

There is no denying that point. It is all about timing. Is it a smart economic decision given the current economic conditions and small HDM market size? Isn't this still a niche-size market, even though it is emerging technology?

[Teazle]

Originally Posted by mdm1699

There is no denying that point. It is all about timing. Is it a smart economic decision given the current economic conditions and small HDM market size? Isn't this still a niche-size market, even though it is emerging technology?

Yes it would be smart given current conditions. In fact especially so given current conditions, precisely because HDM sales are still so low -- sacking the weaker format isn't giving up on much in the way of sales. It's a choice between supporting two tiny formats each with a dubious future over one tiny format which on its own would have a bright future.

[darinp2]

Originally Posted by mdm1699

If you believe this 100%, there is NO reason that current BD players shouldn't be at the price level that you expect of chinese players. It is as if you are saying that Warner is the reason that current players are so expensive.

No, the name brands want something for their names and also to go toward R&D. Kjack has already told us that the plan is for the Chinese companies to compete at the lower end of the price range and his company has a reference design for them. Warner isn't the reason that current players are so expensive, but if people felt that the war was pretty much won then more would feel comfortable buying in (that applies to both sides). If that is combined with multiple Chinese companies competing with each other in this low-name players, then yes, I think that does get Blu-ray players much closer to HD DVD player prices. Especially when they can go off a reference design and get the help from companies like Sigma that they can with their SOC.

Again:

Are you claiming that the Chinese aren't coming with players at prices closer to HD DVD player prices over the next few months?

If you believe so, just say "Yes" and then we can see if you are wrong, or if I am wrong.

Originally Posted by mdm1699

There is no denying that point. It is all about timing. Is it a smart economic decision given the current economic conditions and small HDM market size? Isn't this still a niche-size market, even though it is emerging technology?

There are different sizes of niche markets and even if this stuff was going to stay at what some might call a niche size it wouldn't mean that Warner staying neutral would be the best business decision for them. Currently that neutrality is putting pressure on both sides to have lower player prices, which is good for Warner. At some point the pressure from that one factor isn't going to make near as much of a difference. A bigger niche market is better than a smaller niche market for Warner, even if they are both at a niche size.

--Darin