HD DVD ready to bow out of war with Blu-ray

February 19, 2008|By Maria Panaritis, Inquirer Staff Writer

Attention consumers: It is now safe to enter the high-definition DVD aisle.

A series of stunning moves over the last week by DVD retailers suggests the war over the next generation of at-home movie players has ended.

Yesterday, Toshiba Corp., which had strenuously promoted its favored HD DVD format against fierce competition from Sony Corp.'s preferred Blu-ray format, was said to be reevaluating its strategy.

Toshiba's apparent retreat followed announcements last week by Netflix Inc., Best Buy Co. Inc. and Wal-Mart Stores Inc. that they were dropping HD DVD from their product lines in favor of Blu-ray - the only other competitor in the fledgling high-definition DVD market.

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Since their introduction 20 months ago, the dueling formats had been locked in a stalemate that thwarted many consumers from buying either, for fear of investing in the one that would lose the free-market war.

But with HD DVD now effectively marginalized, analysts say the path is clear for tech-crazed consumers to replace their conventional DVD players without fear of buying a high-tech loser.

"If I were making purchases for myself, I would consider right now Blu-ray being the best bet," Ed Moran, who monitors consumer electronics as director of product innovation for Deloitte Services L.P., of New York, said. "I think we're going to see tremendous sales."

The apparent victory for Blu-ray is akin to when VHS VCRs defeated Betamax in a battle over videocassette formats, which dominated the market before DVDs were introduced in 1997.

But there is a difference this time that analysts say they believe will fuel sales of the Blu-ray format.

At a staggering pace, consumers are replacing old-fashioned analog televisions with high-definition TV sets - a trend that takes on even greater urgency as broadcasters move to abandon analog TV signals a year from now.

"Thanks to the discounting this holiday season where you could get HDTVs for $400," there are more household with HDTVs than ever, said Richard F. Doherty, research director of the Envisioneering Group, of Seaford, N.Y.

"Sixty percent of the consumers we've interviewed in the last year and a half have said I don't want either HD DVD or Blu-ray until there's just one format," said Doherty, whose firm does market research.

With Blu-ray emerging as the winner, demand is expected to uncork in the months to come.

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