"Don't fall for the BD hype," says the HD DVD front man acquires Chinese packaging maker

'Don't fall for the BD hype,' says the HD DVD front man

"Don't fall for the BD hype," says Olivier Van Wynendaele, the HD DVD Promotion Group Europe's front man, in the group's weekly Industry Bulletin.

With recent developments in Hollywood, there have been claims made that the format war is over and that consumers have made their choice. While HD DVD supporters like Toshiba have always believed that the consumer will decide who wins the format war, in reality when the total high definition optical business represents less than one percent of total DVD sales, it really is far too early to declare a winner.

In fact, the reality is a little more complex. Our own research and analysis confirms that the average consumer on the street is pretty happy with the quality of their DVDs and the ability of HDTVs to ‘upscale’ a standard definition image. When they visit their retailer, they opt for up-scaling players rather than going with full HD. There is also considerable misunderstanding when it comes to how the two formats are performing.

On the Blu-ray side, the PS3 has been marketed as the principal playback device for Blu-ray movies, which appears to give Blu-ray a considerable advantage, but look closer. If you move away from the overhyped claims and closely examine the ‘attach rates’ – which is the information that the studios really track – Blu-ray still cannot achieve one software unit per player sold. This low attach rate does appear to challenge the Blu-ray claim that the PS3 is a primary movie playback device.

In contrast, HD DVD has enjoyed a consistent tie rate of movies to players of 3.5 movies to one player.

Despite the early stage of HD DVD adoption, we have also seen significant success for the format across Europe. By the end of 2007, HD DVD’s accumulated share of the high definition standalone player market exceeded 60 per cent of the overall market. In the fourth quarter of 2007 alone, HD DVD doubled its European installed base of players. Since the recent price repositioning, Toshiba has also seen a resurgence in its European sales and we believe that the value offered by HD DVD will continue to attract consumers despite recent Hollywood events.

Consumers are purchasing HD DVD players in increasing numbers, and local and Hollywood studios are producing new titles to support the additional hardware sales momentum. To illustrate, there will be around 100 new HD DVD titles released in Europe this year from a range of content providers and given the absence of region encoding restrictions, consumers will be able to enjoy this content wherever they are.

There is another interesting dimension to the HD DVD story that plays uniquely in Europe – the reliance on local content and it is here where HD DVD maintains a considerable advantage across the production value chain.

In countries like France, over half of all the content produced is for the local markets. Local studios and content providers are looking for the format that best suits the local environment. HD DVD has over 20 authoring labs in Europe, which have produced over 150 local titles so far. Compared to Blu-ray’s ten authoring labs and less than 80 local titles, HD DVD offers the industry the best route into to producing content on HD DVD.

With mandatory features that were agreed back in July 2005, consumers are assured of certain features in every player – permanent connection to the internet, onboard storage and picture in picture in-movie experiences. This gives the consumer confidence that whichever player they choose, they are assured of a consistent, positive experience. HD DVD also delivers the web-enabled features that the competition can still not offer.

HD DVD is still standing, and the format war is not over yet. HD DVD continues to see strong support in the European market, increasing sales of HD DVD players and continued interest in the format from the industry and consumers. HD DVD will continue to market and produce the format as long as there is a demand in the marketplace.

Olivier Van Wynendaele, is Assistant General Manager, Consumer Products Division, Toshiba UK.

Story filed 11 February 2008

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