I heard a news story recently that Toshiba might discontinue the HD-DVD format. It seems a number of movie studios have decided to put all of their future movies on Blu-ray which is developed by Sony. Best Buy, Netflix and other retailers are going exclusively Blu-ray. Looks like Sony may be on the winning side of this “war”. A few of us may remember the VHS / Sony Betamax battle in the 1970’s that Sony lost.
So what happened?
Is the HD-DVD flawed in some way? Why did Blu-ray (if this news story is correct) win?
A scattering from some recent blogs
Wal-Mart Stores Inc. has decided to exclusively sell high-definition DVDs in the Blu-ray format, dealing what could be a crippling blow to the rival HD-DVD technology backed by Toshiba Corp. The move by the world’s largest retailer, announced Friday, caps a disappointing week for HD-DVD supporters, who also saw consumer electronics chain Best Buy Co. and online video rental company Netflix Inc. defect to the Blu-ray camp. http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9063061&intsrc=it_blogwatch
Blu-ray has won. That’s what everybody is saying … I find it interesting how this all unfolded. Toshiba backed HD-DVD. Sony backed Blu-ray and put it in the PlayStation 3. The movie studios were split. But Blockbuster moved first and said that Blu-ray was outselling HD-DVD movies, most likely thanks to PS 3 sales growth. Then Warner Bros. announced in January that it would stop making HD-DVD movies and focus exclusively on Blu-ray … if Toshiba pulls out, a lot of consumers may finally get off the fence and go with Blu-ray. http://www.mercextra.com/blogs/takahashi/2008/02/16/hd-dvd-vs-blu-ray-its-over/
So it looks like Sony put Blu-Ray on the PlayStation 3 and demand for products with the technology went up. The tipping point may have been when Warner Brothers decided to go with Blu-ray
The interesting thing is that Blu-ray may not be the best technology
Unfortunately, Blu-Ray is far from ready for general consumer adoption. Profile 2.0 players, the players that actually do everything they are supposed to (and everything that even low-end HD DVD players did), are few and far between … [and] pretty much universally suck … Pirates of the Caribbean and Ratatouille take a full 2 minutes just to load on most standalone players … Sure, I may buy into Blu-Ray eventually. But it looks like it’s gonna be a while before it’s capable of doing what it should… http://games.slashdot.org/comments.pl?sid=455592&cid=22439048
So why is Blu-ray winning??
It appears the marketing team has implanted a strategy that resulted in more positive share of voice for their technology. This resulted in positive public relations which led to exclusivity deals and more positive PR. Blu-ray now has momentum and is viewed as the technology of the future. People want to go with a winner and not get stuck with last year’s technology. The market may have already and decided quickly. As a result Toshiba can’t catch up and may cut its losses. Several financial analysts have said that Toshiba stock went up when word leaked they may discontinue HD-DVD technology they have invested hundreds of millions of dollars in.
The market is littered with superior technology that got trounced. Think Apple vs. Windows.
Depending on your political leanings Rudy Giuliani and John Edwards were both credible candidates for President. Both lost the share of voice battle and had to drop out of the race.
As you look at your marketing strategy some good questions to ask may be;
Who is my target customer? How much share of voice do I need to break through the clutter and achieve my marketing objectives? What are the possible tactics and how much will I need to invest to achieve that share of voice? What are the repercussions if my competitor wins the share of voice battle?
Now I have to decide when to replace my one year old HD-DVD player.
Until next time – all the best!