Shoppers shunning DVD hi-def players

[Wayne A. Pflughaupt]

Nov. 26, 2006, 12:34AM
DVD-player shoppers choosing to not decide
Unable to predict which new format will win, holiday buyers giving up
By KIM HART
Washington Post

WASHINGTON — Standing before two giant television screens and clutching a remote control in each hand, Tony Sardo grappled with a question that will confront millions of Americans this holiday shopping season.

For nearly an hour, he toggled between two new kinds of video-disc players offering brilliant image quality.

He questioned a sales associate and weighed the none-too-low prices of the players, known as Blu-ray Disc and HD-DVD. Finally, he did what many electronics customers are doing: He walked away without buying either.

"It's too early to know which one to go with," said Sardo, 28, after browsing in a Fairfax, Va., electronics store for a next-generation DVD player to go with his new 42-inch high-definition television. "It's like betting on which team will win the Super Bowl before pre-season games start."

Disaster on the way
The fight between Blu-ray and HD-DVD, reminiscent of the 1980s battle between Betamax and VHS tape formats, isn't just vexing consumers like Sardo. It's shaping up as a business disaster for movie studios, electronics companies and retailers that had counted on a robust holiday selling season for the fancy new players — which cost $500 to $1,000 — and movies to play in them.

Technology companies have divided into two warring camps, each backing one of the formats. Attempts to come up with a single format collapsed last year, so the two sides decided to duke it out in the marketplace.

As they do, consumers are mostly staying on the sidelines, causing sales to fall far short of initial projections.

A winner could still emerge, but some experts say it's just as likely that consumers, fearful of buying expensive players that will turn out to be worthless, will just say no to high-definition discs altogether. In the best case, analysts predict, the format war will go on for another year or so before a clear winner emerges, delaying an industry switchover to the improved discs.

'No one buys anything'
"By and large, it's going to result in the season where no one buys anything," Gartner research director Van Baker said. "Manufacturers have put an awful lot of investment into these players, and they're not going to see a return on that anytime soon."

In January, the Consumer Electronics Association predicted that more than 600,000 high-definition DVD players, worth $484 million, would be sold this year. Shipment delays and production problems have twice caused the organization to lower its forecast, and it now expects U.S. sales to reach only 200,000 players, worth $181 million, by year's end.

Those numbers don't include sales of video game consoles, which manufacturers hope will give the new formats a boost. Sony's PlayStation 3, released this month, doubles as a Blu-ray player, and Microsoft's Xbox 360, released last year, can play HD-DVDs with an accessory component. Sony expects to have shipped 2 million PS3s by the end of the year, trailing Microsoft's total shipments of 10 million Xbox 360s.

Choosing up sides
Movie studios Disney, Fox, Miramax and MGM have sided with Sony's Blu-ray technology; Universal and Warner Bros. have chosen to produce movies in Toshiba's HD-DVD format. Paramount and Warner Home Video are releasing movie titles in both formats, an expensive undertaking when consumers are reluctant to buy either. New Line Cinema has put off releasing titles on the new DVDs until next year.

Last month, Warner said consumers spent $30 million on high-definition TV equipment and movies through September, only half what the studio had forecast. About $150 million will be spent on movies and other such material, compared with Warner's forecast of $225 million to $500 million.

"There's no guarantee that every top movie that's going to come out is going to be available on the format you want," said Ben Bajarin, a consumer technology analyst with Creative Strategies. "Retail is one of the biggest challenges. How do you promote the technology without confusing the customer and losing the sale on both?"

Some customers favor a stopgap solution: a type of DVD player that uses standard discs and "up-converts" the digital information to create an improved picture. Such players sell for $150 or so, and the result is better than standard DVDs when seen on high-definition TV sets, though not as good as pictures from Blu-ray or HD-DVD players.

Michael Sardone, home theater supervisor at a Best Buy store in Manassas, Va., explains the differences in the three technologies to customers at least 15 times a day.

"They just throw up their hands in confusion, and then they walk away because they just don't want to deal with it," he said.

[Sonnie]

Oh for pete's sake... just pick one!

[SteveB]

Will Sony lose again? I had three Betamax players that I won and within a short period of time there were useless? Not because they broke but because vhs won and there were no beta movies to buy.
I'm waiting to see who comes out on top before I buy anything.

[Otto]

Yep, I'm waiting to see. I saw them at Magnolia this weekend, and they look good for sure. But for me, and for now, regular ol' DVD is good enough.

[Wayde]

I picked HD DVD.

I am surprized how many I've already got. I just ordered four more from Amazon.com and have four coming in the mail from Toshiba (taking advantage of a promo offer).

I think Toshi is doing the right thing offering four freebies if you buy a player, it's probably not going to convert any blu-ray fans but it's a very nice extra if you're undecided.

I'm in the wait and see camp as well. If anything I'm more likely to buy an external scalar then pick up an expensive player that may or may not be worth much next year

[Darren]

Waiting... my favorite is HD DVD but I ain't taking any chances. I'm in no hurry... regular DVD's look just fine for now.

[Ayreonaut]

The Sony PS3 is supposed to be a huge factor in skewing the odds in favor of Blu-Ray. With the limited number of PS3s released this year, and the fact that they mostly went to die-hard gamers, it will be next year before that factor comes into play. HD DVD still has a head start...

[Darren]

Ayreonaut wrote:

The Sony PS3 is supposed to be a huge factor in skewing the odds in favor of Blu-Ray. With the limited number of PS3s released this year, and the fact that they mostly went to die-hard gamers, it will be next year before that factor comes into play. HD DVD still has a head start...

XBOX 360 has sold 10 million units and it supports HD DVD so it will be interesting....

[Wayde]

Xbox360 brought me my HD DVD, only for $200 bucks. Just what my CFO approved.