HD-DVD Surrenders to Blu-Ray
Unidentified Announcer: The ultimate "Matrix" collection. Buy it on HD-DVD. Play it on a Toshiba or Xbox HD-DVD player.
ALISON STEWART, host:
Not so fast, "Matrix" lovers. That whole technology and the players you watch them on? Possibly relics at this point.
Toshiba, pioneers of the High Definition DVD format, they surrendered yesterday to its only competitor, Sony Blu-Ray. Toshiba raised the white flag after Wal-Mart, Warner Brothers, Best Buy and Netflix all recently dropped the bomb: They're joining the Blu-Ray brigade.
It's a big tech headline of the week, HD-DVD, versus Blu-Ray, but if all those consonants strung together make you scratch your head and possibly yawn, then this story has make me care written all over it. Theme music, please.
(Soundbite of song, "Baby Elephant Walk")
STEWART: Come on down, Lance Ulanoff, editor-in-chief of PC Magazine, entering our studios. Yeah, that's a good chair. Hey, Lance, how are you? Put your headphones on. Get yourself situated.
Mr. LANCE ULANOFF (Editor-in-chief, PC Magazine): (unintelligible)
STEWART: Oh, you can hear now. There you. Joining us for another edition, taking THE BRYANT PARK PROJECT's Making-Me-Care challenge is Lance Ulanoff, editor-in-chief of PC Magazine. This is Rachel Martin, by the way.
RACHEL MARTIN, host:
Mr. ULANOFF: Hi, Rachel.
STEWART: So are you all set? Getting Lance some water, you know.
Mr. ULANOFF: Thank you.
STEWART: This is a tough competition.
MARTIN: Full-service operation.
(Soundbite of laughter)
STEWART: Don't want to wear you out.
Mr. ULANOFF: I feel so pampered.
(Soundbite of laughter)
STEWART: All right. So this technology is only a few years old. So can you give us a quick primer? Before we put you to the test, can you explain Blu-Ray or HD-DVD, why they're different? What's going on?
Mr. ULANOFF: Well, the best way to understand why they're different or important is that there were DVD players that handled a certain kind of video, what we've been watching for years. Blu-Ray and HD-DVD handle high-quality video. So it's just high definition, which means it looks really, really pretty on your high-def television, and the difference between the two formats is really just the way they burn the data.
Blu-Ray, the reason it's called Blu-Ray is blue lasers. HD-DVD, I think, uses a different-color laser, but they basically do the same thing.
STEWART: All right. So you know the drill, but I'm going to explain it for people. Stretch out while I…
Mr. ULANOFF: One minute.
STEWART: All right. You've got one minute. You're going to hear ticking. When you hear ticking, that means you only have 10 seconds left to make your case.
Mr. ULANOFF: No pressure.
STEWART: No pressure at all. You need to tell us why we should care that after selling a million HD-DVD players and recorders, Toshiba's bowing down to Blu-Ray. Make me care. Go.
Mr. ULANOFF: Well, let me tell you something. They sold a million players, but that's not enough in the marketplace where you've got, you know - when DVD players took over, they blasted VHS out of the water. So consumers and everyone else did nothing for two years, bought nothing. Now, if you're a consumer, you know what to buy. Clarity counts.
One player, one format, one format for your PC, something that'll let you finally watch high-quality 1080p video on that high-def television set - which by the way you can't do with DVD, you can't do with anything else except Blu-Ray or HD-DVD.
But now you know what to buy. You know what to do. This is a comfort to people, except for the people who bought HD-DVDs, and they're not comforted at all. And all I can say is they can still play DVDs right now. Play it until the thing dies, then buy a Blu-Ray player.
(Soundbite of ticking)
STEWART: Oh my gosh, with eight seconds left.
MARTIN: That is so…
(Soundbite of bell)
(Soundbite of laughter)
STEWART: I like that Rachel has commandeered the bell. All right, I have to unpack that a little bit, because that was a lot of information. All right, so just a couple of facts. HD-DVD, the quality was actually better than Blu-Ray?
Mr. ULANOFF: No, no. HD-DVD and Blu-Ray offer the exact same quality.
STEWART: Okay. So which one was less expensive?
(Soundbite of laughter)
MARTIN: You're really going right to the heart of it.
Mr. ULANOFF: I have to tell you, they weren't significantly different. The players were equally expensive. They were about $400 each. The disks cost about the same. They both offered interactive features, which means that the players connected to the Internet so you could do extra things when you're watching a movie. If you're watching "Transformers," you could change the way the way the movie plays, or you could download other things. But all of that, really, it meant these were the same. These came down to marketing and who your friends are.
STEWART: Explain the former and the latter.
Mr. ULANOFF: Okay, so Sony and Toshiba had to convince you that you wanted their format, one over the other. So the marketing plan kind of boiled down to, and in the end, Sony did it right because Sony pulled together its movies, because it has a studio. It pulled in its distribution, it had good distribution network. It pulled in its television sets.
You know, the Sony Bravia, which is their brand of high-def TV? That's considered number one. That's considered the top. They pulled that all together.
Toshiba, for its part, tried to market in the same way, but it doesn't have a movie studio. It doesn't have a television studio, and it doesn't have the leading television set.
The other part of it is the friends idea, right? They all lined up studios behind them. HD-DVD lined up Microsoft, Intel, Warner Brothers. Sony lined up Sony and many other movies and Disney and other movie studios. And then, of course, we know what happened with Toshiba. Warner Brothers was the first to give up. And I can tell you really quickly why they gave up.
Mr. ULANOFF: Two years of terrible holiday sales, and Warner Brothers gets really fast data from point-of-sale retail outlets, and they saw that people still weren't buying the players. They still weren't buying the disks. And they said we can't let this go on anymore. We need clarity so we can start making money again.
So they jumped ship. That wasn't the end, though. But then Toshiba said - right at the point of the Consumer Electronics Show, which I was at in January, they were going to have a big press conference. They didn't have that conference. They just folded up their tent and said we're going to think about this, and we knew.
We knew at that point it was very shaky, and then it was a cascade effect. You saw how quickly everybody else walked away, and that's the key. If your friends walk away from you, you're left standing alone, not a leg to stand on, and Sony triumphed.
STEWART: Before we let you go, so Blu-Ray, this is the only available technology of its kind? They have a monopoly now?
Mr. ULANOFF: They have a monopoly on high-def optical disks, and so now you know what to buy.
STEWART: Good to be Blu-Ray today.
Mr. ULANOFF: It's good to be Sony.
STEWART: It's good to be Sony. Lance Ulanoff, editor of PC Magazine. Nice to see you in real life.
Mr. ULANOFF: Oh, yes, nice to see you in person.
STEWART: Thanks so much for joining us. I hope you come back.
Mr. ULANOFF: Oh it's a pleasure, thanks.
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