Dear HD-DVD,I know things look bad right now. One of your closest and perhaps smartest partners--Warner Home Video--has walked away from you. You're reaction has been strangely muted and now I hear you've canceled a CES press conference. Not good, HD-DVD.
I don't think the war is over, but I understand why things look grim. If you want to overcome, you need to understand. Let's take a moment to look at why Warner Home Video turned its back on you, shall we?
The PS3 Effect
Even if Sony's PS3 (which comes with a built-in Blu-ray player) was dubbed a stinker, sales of the device are now bearing fruit. Parents who caved and bought these consoles in the last six months decided they wanted something out of the deal. I've actually seen these people show up at PC Richards querulously asking, "Do you carry Blu-ray disks?"
Ah HD-DVD, if only the Xbox 360 (or better yet, the Wii) had shipped with an HD-DVD drive.
Retail Results
This is directly related to PS3 sales. I'd say Warner Home Video can very accurately and quickly measure disc sales at retail. Numbers for an overall lackluster holiday buying season clearly didn't help your format, the players, or content. PS3 sales were reportedly increasing again, helping float the Blu-ray boat. And who wouldn't want to give someone a hi-def-ready player with some movies to go along with it? Sorry, HD-DVD, but it's unlikely that those buying Xbox 360s for the holidays also dropped another couple hundred dollars for an external HD-DVD player, which, of course, translates to fewer HD-DVD tiles in the gift-stream.
Operating By the Quarter
Businesses can no longer afford to make decisions based on fiscal year performance. 21st-century corporations measure minute-to-minute and make drastic changes on a quarterly basis. As noted above, Warner Home Video had to react to sales in October, November, and December. In the end, Warner went from your friend in Q4 2007, HD-DVD, to a mortal enemy in Q1 2008.
Burn This
HD-DVD, why couldn't you get some burners into desktops and laptops in 2007? This made you far less attractive to early adopters like me. And you need people like me, HD-DVD.
Okay, okay. Calm, down , HD-DVD, all is not lost. There is a lot of HD-DVD product out there. You have sold players, internal drives, and discs. You must've moved a bunch of $99 players. And I bet you sold more discs than your Blu-Ray adversaries, at least through Warner Home Video, because it was the only content distributor to offer dual format discs: HD-DVD on one side and old-school DVD on the other. How smart was that? I know I actually considered buying these discs simply because I could use them now and later if I bought an HD-DVD player. I wonder if Warner Home Video will make the same smart decision with Blu-Ray. That could really turn this mini-wave of good fortune for Blu-Ray into a Tsunami.
My suggestions for survival are:
Run a two month sale on all HD-DVD players that, via a rebate directly from Toshiba, making their final cost around $49 (Your Wal-Mart promotion on Black Friday was a good idea--even if it did smack of desperation. I say do it again).
Work with remaining HD-DVD content partners to cut disc prices in half.
Bundle five movies with all players.
Actually show consumers something that proves that HD-DVD is somehow better than Blu-Ray. (Look, I know that's not true, the formats offer the same 1080p viewing quality and loads of extra disc space for interaction, plus online-connectivity is really not a laser-technology function. So, this means you have to innovate in some meaningful way. How you do this, I have no idea, HD-DVD. but I digress).
Will any of this help? I honestly don't know, but pulling up stakes and going home now while the battle is fully enjoined is, well, self-defeating. Make Sony throw the knockout punch. Then you can say you fought the good fight and not end up a Beta-Max or LaserDisc-style punch line.
