Yesterday - the day before the official opening of the 2008 Consumer Electronics Show - was press conference day, and major exhibitors were making lavish presentations to hundreds of analysts and press in large ballrooms at the Venetian Hotel and the Sands Conference Center here.

Ken Werner
Senior Analyst and Editor

The line to get into the Toshiba press conference was huge: a Japanese newsman from Aving TV said we were "at the end of a long tail." The reason, of course, was the Friday announcement by Time Warner’s Warner Bros Studio that beginning in June it would release the high-definition versions of its movies exclusively in Sony’s Blu-ray format, and not in both Blu-ray and Toshiba’s HD DVD format, as it does now. Since Warner has about18 per cent of the U.S. DVD market, this move was widely interpreted as marking the effective death of the HD DVD format and the end of the format war that has slowed sales of high-definition DVDs and players.

The timing of the Warner announcement, just before the opening of CES, drew maximum press coverage and created the largest possible embarrassment for Toshiba. The CES press conference, which was to have incorporated a well-scripted announcement of increasing HD DVD sales and new spring models in Toshiba’s successful Regza LCD-TV line would now have to be an exercise in PR crisis control, and there wasn’t much time to put the new message together. And that’s why, on Sunday, there was intense interest in hearing what Toshiba would say.

Toshiba’s classy marketing team rose to the occasion. Jodi Salley, in charge of HD DVD marketing, opened by saying "As you can imagine, this is a tough day for me," and went on to say that the Toshiba team still believes HD DVD is the best format for consumers because of its performance, consistency of essential features across models from all manufacturers, and cost. Toshiba, she said, would respond to market needs. Scott Ramirez then skillfully turned the tone positive with his upbeat presentation of the Regza LCD-TV line.

Questions about the Warner announcement were asked at other press conferences, as well. Spokesmen from LG, which is part of the Blu-ray camp, seemed just as surprised as Toshiba. Only Sony’s Sir Howard Stringer sounded unsurprised, and perhaps even smug. He said at the Sony Press Conference held at the Las Vegas Convention Center, "All of us at Sony are feeling blue today - and that’s a good feeling." The consensus of opinion from several analysts I talked with is that Sony used some combination of carrots and sticks to motivate the Warner decision. A Sony exec skillfully side-stepped that suggestion following the press conference.

So, is HD DVD dead? It’s hard to see how it can survive as a movie format, although it could continue as a game format for X-Box for some time. Still, two studios will still be producing HD DVD disks and Toshiba is still producing players, so the official burial won’t take place just yet.

Reply to the author