Tuesday, February 19, 2008

BPN 1013 HD-DVD: It’s over

Toshiba stops promoting the HD-DVD format. From today on the company will decrease the distribution of the HD-DVD players and recorders, and by the end of March it will stop the entire distribution. Toshiba terminates the product line of players and recorders, as film studios and retail chains no longer supported the DVD format.

This is a real blow for Toshiba. The Japanese company had built up a slew of movie companies, hardware and software manufacturers as well as retail chains for the distribution of the HD-DVD players, recorders and titles. And now the game is over for Toshiba and its following, which includes Microsoft as the most prominent partner. Toshiba and the companies which followed will have to write off a lot of money on the research, production and stock. (Save a recorder/player and several titles for the Museum of the Future, for digital heritage's sake, please).

This decision proves that the market will not take two different formats for its edutainment products, certainly not when exclusive deals are being made. This was already clear from the history of the first DVD series, when Toshiba also tried to set up its own format, but bowed for the pressure of IBM, being helped by Philips.

Does this mean that Philips and Sony have won? This depends on the horizon of duration of this format. One lesson has been learned. Despite the fact that movie titles are a driving force of the DVD and HD-DVD format, the format of the second generation of DVDs has been dictated by the game world. Sony built in the Blu-ray in the PlayStation. Microsoft offered HD-DVD optionally for XBox users; HD-DVD would have had a better chance if they had been built in.

So now the victory march for Philips and Sony can begin. Their stock prices will rise a little bit, I guess. Just for some days and no longer than that. For DVD is no longer a real money maker for Philips or Sony. The recorders of Philips and Sony are still pricy, the players will drop and be given away, when you buy a few movie titles. But it is not the manufacturing which makes money for Philips and Sony in the field of DVD and Blu-ray, but it is the stream of license money on the patents. With the sale of every non-Philips and non Sony hardware as well as the discs, the cash till will rattle; be it for a few euro cents, yet we are talking about millions of pieces of hardware and discs.

The victory might also be short-lived as glass fibre becomes more common. By offering glass fibre connections, the need for DVD and its second generation will decrease, as the speed of downloading will increase dramatically. In fact it will be just as a milestone as the change from dial-up to ADSL was., but then exponentially. The whole optical disc movement which started in 1984 is temporary as optical discs contain only frozen online.

The DVD format war is over after two years. Let it be a lesson for the future.

Blog Posting Number: 10012

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