RhymesayersDU
01-20-2007, 10:56 PM
Had to read this article for my marketing class. Thought a lot of you movie people who buy lots of DVDs might be interested, as well as people who just like to be on the cutting edge of technology.
How Dual-Format DVD Players May Prolong Duel; Consumers Get Little Incentive To Pick a Standard
Evan Ramstad in Seoul, South Korea, and Sarah McBride in Las Vegas. Wall Street Journal. New York, N.Y.: Jan 9, 2007. pg. B.3
In becoming the first manufacturer to build a machine that can play both formats of high-definition digital videodiscs, South Korea's LG Electronics Co. is likely to encourage a slew of rivals to also start making dual-format players.
That would free consumers from worrying about which of the two competing technologies -- Blu-ray and HD-DVD -- will emerge as the market standard for next-generation DVDs, which are designed to take advantage of better picture quality offered by high-definition TV sets.
But it doesn't mean the long-brewing HD format wars will end soon. In fact, consumer-electronics manufacturers and movie studios still will push their particular favorite format, because reputations and royalty payments on the underlying technology are at stake. Rather than help a winning format in the DVD war, dual-format players will likely enable the weaker technology to cling on for months or years longer in the marketplace than it otherwise could.
It also means studios must decide whether to release titles on dual- format discs instead of, or in addition to, the two existing formats.
LG took the wraps off the first machine to play discs in both Blu- ray and HD-DVD formats at this week's annual Consumer Electronics Show in Las Vegas. The dual player is priced at $1,199, about twice the price of an HD-DVD player and slightly more than the average price of a Blu-ray player.
In another attempt to skirt the format battle, Time Warner Inc.'s Warner Brothers this week is expected to announce a design for a disc that can store a movie or other content in the HD-DVD format on one side and the Blu-ray format on the other side. The movie studio is trying to persuade others to package their movies, TV shows and other high-definition video that way instead of coming out with separate discs for the two formats. The dual-format disc is likely to hit the market toward year end, according to people familiar with the situation.
Retailers said they expect the dual-format options to jump-start slow sales of high-definition players and discs. "It will help reduce the confusion," said Randy Wick, senior vice president and general merchandising manager for consumer electronics at Circuit City Stores Inc.
Mike Vitelli, Best Buy Co.'s senior vice president for consumer electronics, said he is encouraging other DVD manufacturers to follow LG's example with a dual-format machine. "It's about giving consumers the confidence to get in the game," he said. "We can recommend to our customers, if you buy the LG machine, you're not going to be left out in the cold."
Although he didn't commit to supporting either of the dual-format approaches of LG and Warner Pictures, Universal Studios Home Entertainment President Craig Kornblau welcomed the developments. "These are both interesting solutions, and it's really important that we work toward a solution as quickly as possible," Mr. Kornblau said. Universal is releasing movies in HD-DVD, but not in Blu-ray. Universal Studios is owned by General Electric Co.
Consumer-electronics companies started rolling out separate Blu-ray and HD-DVD players about seven months ago. Sales have been slow. There were only a combined total of 225 HD titles available for use on the new machines as of mid-December, compared with more than 18,000 titles for regular DVD players. And consumers are hesitant to spend money when they aren't sure which format will end up surviving.
More buyers have access to next-generation DVD players through new game devices such as Sony Corp.'s PlayStation 3, which plays Blu-ray discs, and Microsoft Corp.'s Xbox, which has an accessory to play HD- DVDs.
Each side is promoting its gamer connections, which each hopes will pave the way to wide acceptance of their particular format. For example, in a new survey by Sony of more than 10,000 PS3 owners, more than 80% of respondents indicated that they planned to purchase Blu- ray movies for their PS3s, and about 75% of respondents said their PS3 would be a primary device for watching movies.
LG will begin shipping its product to stores this month. If consumers bite and more manufacturers jump in with similar products, competition and higher volumes are likely within a couple of years to bring prices down to a level that appeals to the mass market.
Persuading the bigger DVD-player manufacturers to follow suit, especially those already committed to one format or the other, may prove difficult. "I don't see a dual-format player as solving anything," said Andy Parsons, director of advanced product development at Pioneer Corp., which is selling a $1,500 Blu-ray player.
Many studio executives also panned the idea of a dual-format disc, saying the discs are likely to prove expensive and they were unsure how it would work. At Walt Disney Co., which is committed to the Blu- ray technology rather than HD-DVD, a spokesman said the studio wouldn't use the dual-format disc.
How Dual-Format DVD Players May Prolong Duel; Consumers Get Little Incentive To Pick a Standard
Evan Ramstad in Seoul, South Korea, and Sarah McBride in Las Vegas. Wall Street Journal. New York, N.Y.: Jan 9, 2007. pg. B.3
In becoming the first manufacturer to build a machine that can play both formats of high-definition digital videodiscs, South Korea's LG Electronics Co. is likely to encourage a slew of rivals to also start making dual-format players.
That would free consumers from worrying about which of the two competing technologies -- Blu-ray and HD-DVD -- will emerge as the market standard for next-generation DVDs, which are designed to take advantage of better picture quality offered by high-definition TV sets.
But it doesn't mean the long-brewing HD format wars will end soon. In fact, consumer-electronics manufacturers and movie studios still will push their particular favorite format, because reputations and royalty payments on the underlying technology are at stake. Rather than help a winning format in the DVD war, dual-format players will likely enable the weaker technology to cling on for months or years longer in the marketplace than it otherwise could.
It also means studios must decide whether to release titles on dual- format discs instead of, or in addition to, the two existing formats.
LG took the wraps off the first machine to play discs in both Blu- ray and HD-DVD formats at this week's annual Consumer Electronics Show in Las Vegas. The dual player is priced at $1,199, about twice the price of an HD-DVD player and slightly more than the average price of a Blu-ray player.
In another attempt to skirt the format battle, Time Warner Inc.'s Warner Brothers this week is expected to announce a design for a disc that can store a movie or other content in the HD-DVD format on one side and the Blu-ray format on the other side. The movie studio is trying to persuade others to package their movies, TV shows and other high-definition video that way instead of coming out with separate discs for the two formats. The dual-format disc is likely to hit the market toward year end, according to people familiar with the situation.
Retailers said they expect the dual-format options to jump-start slow sales of high-definition players and discs. "It will help reduce the confusion," said Randy Wick, senior vice president and general merchandising manager for consumer electronics at Circuit City Stores Inc.
Mike Vitelli, Best Buy Co.'s senior vice president for consumer electronics, said he is encouraging other DVD manufacturers to follow LG's example with a dual-format machine. "It's about giving consumers the confidence to get in the game," he said. "We can recommend to our customers, if you buy the LG machine, you're not going to be left out in the cold."
Although he didn't commit to supporting either of the dual-format approaches of LG and Warner Pictures, Universal Studios Home Entertainment President Craig Kornblau welcomed the developments. "These are both interesting solutions, and it's really important that we work toward a solution as quickly as possible," Mr. Kornblau said. Universal is releasing movies in HD-DVD, but not in Blu-ray. Universal Studios is owned by General Electric Co.
Consumer-electronics companies started rolling out separate Blu-ray and HD-DVD players about seven months ago. Sales have been slow. There were only a combined total of 225 HD titles available for use on the new machines as of mid-December, compared with more than 18,000 titles for regular DVD players. And consumers are hesitant to spend money when they aren't sure which format will end up surviving.
More buyers have access to next-generation DVD players through new game devices such as Sony Corp.'s PlayStation 3, which plays Blu-ray discs, and Microsoft Corp.'s Xbox, which has an accessory to play HD- DVDs.
Each side is promoting its gamer connections, which each hopes will pave the way to wide acceptance of their particular format. For example, in a new survey by Sony of more than 10,000 PS3 owners, more than 80% of respondents indicated that they planned to purchase Blu- ray movies for their PS3s, and about 75% of respondents said their PS3 would be a primary device for watching movies.
LG will begin shipping its product to stores this month. If consumers bite and more manufacturers jump in with similar products, competition and higher volumes are likely within a couple of years to bring prices down to a level that appeals to the mass market.
Persuading the bigger DVD-player manufacturers to follow suit, especially those already committed to one format or the other, may prove difficult. "I don't see a dual-format player as solving anything," said Andy Parsons, director of advanced product development at Pioneer Corp., which is selling a $1,500 Blu-ray player.
Many studio executives also panned the idea of a dual-format disc, saying the discs are likely to prove expensive and they were unsure how it would work. At Walt Disney Co., which is committed to the Blu- ray technology rather than HD-DVD, a spokesman said the studio wouldn't use the dual-format disc.