Magazine article Marketing

News Analysis: Round One to Blu-Ray

Magazine article Marketing

News Analysis: Round One to Blu-Ray

Article excerpt

Sony has an early lead over Toshiba in the latest disc-format skirmish, but the war is by no means over.

Consumers still struggling with the prospect of high-definition digital TV are about to get a lot more confused. Just as they have started to understand whether or not DVDs they bought on holiday will work on their set-up at home, the consumer-electronics industry has thrown up yet another home-entertainment conundrum.

The latest battle pits HD DVD against Blu-ray discs. Toshiba, which is championing the HD DVD technology, has locked horns with Sony, which spearheads the consortium of companies behind Blu-ray. The former has just handed its European ad business to Grey, illustrating Toshiba's focus on the fight ahead. Experts say only one format can win, and the fierce rivalry is being compared with the long drawn-out struggle between JVC's VHS and Sony's Betamax video-cassette formats that ushered in the VHS era in the early-80s.

Toshiba's high-definition offering stole a march by launching two months ahead of its rival last November. However, Blu-ray discs outsold HD DVDs in the UK by 111,000 to 54,000 between January and the end of May, according to the British Video Association.

Blu-ray's sales were undoubtedly bolstered by the launch of Sony's PlayStation 3 in March. It was the company's insistence that Blu-ray technology be included in the console that was the primary cause of the lengthy delays to the PS3's launch - a hold-up that caused Sony to lose valuable, possibly unrecoverable, ground to rival next-generation consoles from Nintendo and Microsoft.

So, what is the choice consumers face? Unsurprisingly, proponents of both Blu-Ray and HD DVD claim superior picture and sound quality. Blu-ray discs have greater storage capacity (50GB compared with 25GB on HD DVD), which is useful for releases with extensive bonus material. But cheaper production costs for HD DVD could mean that savings are passed on to consumers.

In the case of hardware, the first stand-alone Blu-ray player on sale in the UK carried a pounds 1000 price tag, although average prices have since fallen somewhat, with the PS3 pitched as the budget route to Blu-Ray at about pounds 400; HD DVD players are available for less than pounds 500.

Yet price and the quality of picture and sound may not be the ultimate grounds for success. 'Those players that try to win minds, instead of hearts and minds, will be dead,' says Gavin Hilton, planning director at WWAV Rapp Collins, which works on Sony's direct marketing account. 'Betamax was cheaper than VHS, but VHS won the hearts. It's not about promoting the technology itself.'

Moreover, the format war is not a simple shoot-out between Sony and Toshiba. DVD retailers, film studios and other hardware and software developers will be equally crucial to the outcome. …

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