February 19, 2008 in Business

Blue-ray close to victory

Associated Press The Spokesman-Review
 

Retail choice

On Friday, Wal-Mart Stores Inc., the largest U.S. retailer, said it will sell only Blu-ray DVDs and hardware

TOKYO – Sony’s Blu-ray technology is emerging as the likely winner in the format battle for the next generation of DVD players after Toshiba appeared ready to ditch its HD DVD business.

Such a move would help consumers know which system to invest in and would likely boost sales in Blu-ray gadgets, analysts say. But it will disappoint the 1 million people around the world estimated by Toshiba who have already bought HD DVD players.

Toshiba Corp. said Monday no decision has been made but acknowledged it had started a review of its HD DVD strategy. The comments follow a flurry of weekend Japanese media reports that the company was close to pulling the plug on the business.

A company official, speaking on condition of anonymity because she isn’t authorized to speak on the matter, said a board meeting could be held as soon as today, where a decision is likely.

HD DVD has been competing against Blu-ray disc technology, backed by Sony Corp., Matsushita Electric Industrial Co., which makes Panasonic brand products, five major Hollywood movie studios and others.

Both formats deliver crisp, clear high-definition pictures and sound, but they are incompatible with each other, and neither plays on older DVD players. HD DVD was touted as being cheaper because it was more similar to previous video technology, while Blu-ray boasted bigger recording capacity. Both formats play on high-definition TVs.

Only one video format has been expected to emerge as the victor, much like VHS trumped Sony’s Betamax in the video format battle of the 1980s.

This time, however, it appears Sony will end up on the winning side.

“If true, this will be good news for the next-generation DVD industry in clearing up the confusion for consumers because of the format competition that had curbed buying,” said Koya Tabata, electronics analyst at Credit Suisse in Tokyo. Recently, the Blu-ray disc format has been gaining market share, especially in Japan. A study on fourth quarter sales last year by market researcher BCN Inc. found that by unit volume, Blu-ray made up 96 percent of Japanese sales.

American movie studios also were increasingly lining up behind Blu-ray.

Last month, Warner Bros. decided to release movie discs only in the Blu-ray format, joining Sony Pictures, Walt Disney Co. and News Corp.’s Twentieth Century Fox. That left only Viacom Inc.’s Paramount Pictures and General Electric Co.’s Universal Pictures as exclusive backers of HD DVD.

On Friday, Wal-Mart Stores Inc., the largest U.S. retailer, said it will sell only Blu-ray DVDs and hardware. That news came five days after Netflix Inc. said it will cease carrying rentals in HD DVD.

Several major American retailers have made similar decisions, including Target Corp. and Blockbuster Inc.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email