Commentary from the Insiders Thread

[daman]

Originally Posted by Penton-Man

Well that’s got to be the understatement of the year.
That’s all you’ve got to offer?

Penton, don't forget that David stressed many times that he was harsh in his review of the HD DVD "We Are Marshall"

Seriously, David, don't you think it's getting old bringing up your review of that movie as your most critical view of HD-DVD ?

Since you are a movie reviewer, maybe you can just go back to review movies and leave the yield/business model out of your discussion all together.

By the way, you can reject your Insider status on AVS anytime you want. It only takes a PM to markrubin there. It's not your intention to want to be an insider status there, so it's best that you don't get one and leave this mess behind.

[Proteus]

CEDIA isn't the place for new release information. It's mostly high-end technology with a few consumer level products thrown in. Blu-ray and HDDVD are just a hot topic right now so it's important they are represented for larger reasons.

[mel2]

that's bull. hd dvd just announced transformers. if there are no releases from any bda studio than maybe they need someone new in charge. it should be about momentum and hd dvd stole it with paramount 2 weeks ago and now with the announcement of transformers. maybe bda has never heard of the word "counterpunch". they need one.

[Mont]

Originally Posted by dko1971

I have a suggestion for David, based on his 'business man's point of view' analysis.



Please tell us about the scenario where HD DVD wins tomorrow and how any CE company can earn a profit making an HD DVD player when Toshiba has already slashed prices beyond healthy returns to recover R&D. What profits are left on the table for a firm to join in the game? I really like to hear your acute business perspective on this more pressing issue. Manufacturing yields can be improved upon whereas bargain-bin pricing cannot be reversed.

I have been reading these forums since last november when i bought 3 PS3's... one for myself, one for my brother, & one for a friend. I know Sony sells each system for a loss especially back then when blue laser diode yields were a bit low. dko's post has me wondering though, how much does it really cost Toshiba to make a HD DVD player. Are they being sold at a loss?

[blitz6speed]

Originally Posted by daman

By the way, you can reject your Insider status on AVS anytime you want. It only takes a PM to markrubin there. It's not your intention to want to be an insider status there, so it's best that you don't get one and leave this mess behind.

That would be Step 1 to try and regain ANY credibility.

[hoser]

Mr. Vaughn,

"Insiders" are INSIDE the business.
Journalists, on the other hand (in order to be independent and credible), are OUTSIDE OF that which they report on.
Or did you know that?

A guy from the PRess is forced into becoming an "Insider?"
Yeah...OK.

Trolling is trolling.
Enough of this guy.

[Blu_J]

Alright! Enough with the Transformers. When did this title become the be all end all movie. Seriously blown out of proportion...

Anyway, would it really be that difficult to work up a decent director and have him or her do a pro Blu ad? I not talking the likes of Spielberg or anything, maybe a Robert Rodriguez or David Fincher or Michael Bay . Better yet have those Pixar guys do an ad showing them working on a new movie or some Blu stuff saying "this is only possible on the best next gen format, it's beyond HD". Could the BDA tap some of these exclusive "resouces" it has available to come up with a grand marketing push? Even if the user base is small, isn't the whole point of ads/marketing to inform and sell your product to posible costomers?

[bryaaaant]

Originally Posted by daman

Penton, don't forget that David stressed many times that he was harsh in his review of the HD DVD "We Are Marshall"

Haha! Yeah, a movie review for HD-DVD vs. a format review for Blu-ray. Oh, that's very fair.

Any extreme hypothetical scenario for HD-DVD maybe would be considered more in the lines of "being fair", no? Just like Penton was saying. Or your "insider" sources can't provide you any? Your sources ARE dual format manufacturers right? Or I guess HD-DVD's are just so perfect that there's no any at least remotely possible future major catastrophic issue (eg. Blu-ray's low yield rates) on them, huh? Must be nice.

[mattym]

so on AVS Vaugn says paid hasnt disputed the low yeilds, yet has posted yields on here...so let me see..journolistic integrety and facts 0 - Vaugn 1.

credibility is lost with me now. so writing a few lines on the internet makes him special?

[MatrixS2000]

Originally Posted by dko1971

I have a suggestion for David, based on his 'business man's point of view' analysis.



Please tell us about the scenario where HD DVD wins tomorrow and how any CE company can earn a profit making an HD DVD player when Toshiba has already slashed prices beyond healthy returns to recover R&D. What profits are left on the table for a firm to join in the game? I really like to hear your acute business perspective on this more pressing issue. Manufacturing yields can be improved upon whereas bargain-bin pricing cannot be reversed.

Thanks for the link and providing the balance that David so obviously left out....

PS - I especially liked how he asked Amir to scrub his theory...

Originally Posted by Dave Vaughn
Amir,

I have a theory. It is my thought that the longer this "war" goes on, the better it is for HD DVD for many reasons.

1. They get the ability to sell more players to consumers. The more players that there are, the greater likelihood of disc purchases (duh!).

2. With more players in the marketplace and more discs being sold, the cost advantages of HD DVD start to really matter!

3. With these cost advantages, the actual sales of software can still be tilted towards Blu-ray, but the actual profit generated by said sales is higher on the HD DVD side because of the cost structure.

4. Finally, the added production capabilities of HD DVD start to take over because they can continue to flood the market with discs while the Blu-ray side is saddled with slow production of BD50's because of only having two manufacturing plants in the world that can handle their releases (unless BD25's become the disc of choice out of necessity).

Am I on the right track here?

Best,

[patrick99]

Originally Posted by MatrixS2000

Thanks for the link and providing the balance that David so obviously left out....

PS - I especially liked how he asked Amir to scrub his theory...

Many thanks for sharing that very illuminating quote!

[Frode]

Let me counter David's little businessman view with one of my own:

It costs a lot of money to produce hi-def media, from 150k (authoring/encoding number I got from a friend of mine who's an insider) to 500k (number from amir - yes, I'll use him if I have to in order to make a point ). That latter number would cover everything from producing masters, lot of extras, authoring, encoding, marketing, packaging etc. That means that you have to sell at the minimum 20k discs to break even - preferably a lot more. Disc stamping costs aren't even a drop in the bucket at this point. Differences in production costs between formats is negligible, and your claim that "that the costs associated with BD are "much" higher than HD DVD" are just way out there. In fact, as we've seen with both Warner and Paramount the studios can use the same assets to make both formats, which means that they can share a lot of the cost associated with production. So in a best case scenario, instead of needing to sell 20k discs on one format, they could get away with say, 13000 on each - hypothetically (because that is precisely what the discussion has been).

So taking your example of 300, if Warner were to go HD DVD exclusive, they wouldn't sell 250k discs anymore. They'd sell more on HD DVD than they did before (say 125k), but they'd lose out on all the Blu-ray exclusive customers which make up a larger market size, and in addition the production costs would be focused on one format leading to a much much higher cost per disc, and lower profit. Worst case scenario using the 500k number, they'd actually lose money on HD DVD alone at 125k discs compared to splitting it with BD and selling 79k (or however much it was). They're not selling "slightly lower amounts of HD DVD" - they're selling only half as much, and that's determined by the market size and people's willingness to buy product.

From a businessman point of view it makes much more sense to support both formats in the short term - they may actually have a chance of turning a profit compared to releasing on a single format right now. Studios who are/go exclusive are doing it however because they want to promote ONE HD format, period, and because in the long term it may mean more consumer adoption.

We were moving towards exactly that with only Universal being the last wavering stand, when Paramount decided to drop BD which was making them more money than HD DVD would have, and then promote HD DVD, which has locked down the entire format war _preventing_ any kind of long term resolution. Bribe aside, from a businessman point of view, the best thing they could have done would have been to just remain neutral - they would have made more money in the short term during the war, and when it was over they would have made more money from having a much larger installed user base, even should subsidies disappear from stamping. Instead we have a prolonged format war which ensures that neither side will even reach the sales numbers where disc stamping costs matter. The studios lose, the hardware manufacturers lose (particularly Toshiba), and we as consumers lose because at some point the studios may just say it's not worth it and go for VOD downloads. Microsoft wins.

How's that for a businessman point of view?

[Frode]

Let me have a crack at this one too:

I have a theory. It is my thought that the longer this "war" goes on, the better it is for HD DVD for many reasons.

1. They get the ability to sell more players to consumers. The more players that there are, the greater likelihood of disc purchases (duh!).

2. With more players in the marketplace and more discs being sold, the cost advantages of HD DVD start to really matter!

3. With these cost advantages, the actual sales of software can still be tilted towards Blu-ray, but the actual profit generated by said sales is higher on the HD DVD side because of the cost structure.

4. Finally, the added production capabilities of HD DVD start to take over because they can continue to flood the market with discs while the Blu-ray side is saddled with slow production of BD50's because of only having two manufacturing plants in the world that can handle their releases (unless BD25's become the disc of choice out of necessity).

1. They're selling less players than BD are, looking at stand-alone player sales lately. The PS3 in addition represents a massive user base with untapped potential. Neither HD DVD software or hardware sales has shown any sign of gaining on BD, and I don't expect that to change significantly.

2. No they don't. HD media would have to take up a large part of the optical market in order to offset the production costs, and having a format war prevents that from happening.

3. See my earlier post. A slightly higher profit per disc can't offset lower total sales HD DVD represents with the current setup costs.

4. Expecting HD DVD production capabilities to increase while BD remains standing still is a fallacy. The current BD production capacity is also high enough that it could handle several million discs a month, BD50 or no BD50. The format war alone puts a big damper on growth - by the time capacity of current production facilities might become an issue there'll be plenty of other production lines set up to take up the slack. Growth is the problem, not production.

Am I on the right track here?

No, I'd say you're on a wild goose chase, and the goose is named Amir .

[GaS]

Originally Posted by mel2

that's bull. hd dvd just announced transformers. if there are no releases from any bda studio than maybe they need someone new in charge. it should be about momentum and hd dvd stole it with paramount 2 weeks ago and now with the announcement of transformers. maybe bda has never heard of the word "counterpunch". they need one.

For the love of god its just Transformers (and it was a letdown)

They made ONE NEW title announcement at CEDIA (everyone new of the startrek pack). Big deal.

[JTK]

Big time salute to the mass ownage Penton has been laying out. Thank you. I hope everyone from insider on down follows his example.

Originally Posted by mel2

that's bull. hd dvd just announced transformers. if there are no releases from any bda studio than maybe they need someone new in charge. it should be about momentum and hd dvd stole it with paramount 2 weeks ago and now with the announcement of transformers. maybe bda has never heard of the word "counterpunch". they need one.

Looks like another classic victim of serious FUD right here. By happenstance, and hopefully unintentionally, you're posting and spreading FUD.

[Scorxpion]

Originally Posted by mel2

that's bull. hd dvd just announced transformers. if there are no releases from any bda studio than maybe they need someone new in charge. it should be about momentum and hd dvd stole it with paramount 2 weeks ago and now with the announcement of transformers. maybe bda has never heard of the word "counterpunch". they need one.

It seems you did not pay attention that your favourite format on HD-DVD doesnt include DolbyTHD ,and what about if its done correctly on BD.

this time we can call it a true high definition and not a fake high definition

[radagast]

Originally Posted by Blu_J

Alright! Enough with the Transformers. When did this title become the be all end all movie. Seriously blown out of proportion...

Exactly. Too many of you people are thinking short term and are on too much of an emotional rollercoaster. So what if Transformers sells well on hd-dvd. It will only do that for a relatively short period. Then what will hd-dvd do then? Answer: Continue to slide downhill in both player sales and disc sales.

[Jimbo976]

Originally Posted by radagast

Exactly. Too many of you people are thinking short term and are on too much of an emotional rollercoaster. So what if Transformers sells well on hd-dvd. It will only do that for a relatively short period. Then what will hd-dvd do then? Answer: Continue to slide downhill in both player sales and disc sales.

Yep, exactly.

[Rob Tomlin]

Originally Posted by Frode

No, I'd say you're on a wild goose chase, and the goose is named Amir .

[Maximus]

Guys, I am appealing to sense, here. Do you think we could lay off Dave please?

We are not, I hope, like the rabid fanboys on AVS and I think when Dave says he has sources; we can trust he does.

I don't want this place to turn into AVS Mk II, so a little bit of decorum would be nice.

If you feel you have a point to make about the validity of Dave's information could you do so in a non-offensive manner. I really do think he means well, and does bring up a few points that we can debate about without becoming offensive.