Re: Toshiba HD-A2 sells over 90,000 for the weekend
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Originally Posted by Chris S
The true question may be how many of these players went to "new" households that don't already have a player and how may went to those looking to upgrade? I know my purchase last week was to upgrade my HD-A1.
Toshiba and Sony both need to really push into the new household market to truly make these formats viable in the long run.
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That was the very same thought that first crossed my mind. Just a sample of the related posts on this forum, seem to indicate that a sizable number of them were bought as second players either for a second room and/or as an upgrade.
Either way, I am not sure how intelligent a business decision this is on Toshiba's part. After all, what after this? Irrespective of whether Walmart or Toshiba is responsible for it, Toshiba I am afraid has backed themselves into a corner with the $99 price. First of all, for consumer electronics, customers always expect prices to fall, never in history has there been a case where the prices have actually gone up. It is not going to be easy to convince people to spend $200 - $300 for something that now has a perceived value of $98 less the $ cost for 5 to 8 HD-DVDs. Thus any chances of Toshiba ever making any 'real' profit from HD-DVD players, is now out. Keep in mind, this is the same Toshiba that only a few years ago, I think 2003, was complaining how there is no more profits with DVD players selling for $150. It is quite apparent that Toshiba must have felt some really strong pressure to do something as drastic as this. There is a saying in Hindi, "Marta kya na karta?" roughly translated it means "If death seems imminent then what's the harm in trying pretty much anything?" For me, the big question that comes up is, what if Blu-Ray decides to go the same way and match Toshiba's desperation? What does Toshiba do then? Will they offer free HD-DVD players with every three-four HD-DVD movies one buys? Or better yet, will they actually start handing out cash or coupons for redemption along with HD-DVD players to have people take them home? It is plain and simple, bad business for one and all involved in the entire hardware chain from manufacturer to end retailer. After all, I am sure even the Walmarts, Best Buys & Circuit City's are not going to be too thrilled by a product that leaves them with no profits and which now seems to be destined to be used primarily as a loss leader by these retailers. But then, I suppose the retailers need some 'loss leader' each year anyhow, thus instead of the cheapo DVD players, they have HD-DVD to play the part and they can still look at making money from the HD-DVD software sales. But wait a minute, are'nt they giving loads of those away for free too? The only one's that may actually enjoy this are the studios, but the funny thing is, that the majority of them too are on the opposite side. Thus I suppose Universal, Paramount, Dreamworks and probably Warner too, are the only one's who are going to enjoy the fruits of Toshiba's desperation. Hmmm, who else thinks that all this may have something to do with retaining Warner? Yes, yes, I know Warner recanted their statements in this regard. But then, what else can be expected from them at this stage. Please keep in mind that if Warner were to openly declare that they are strongly leaning towards the other format, it would pretty much kill even the $99 HD-DVD player sales and thus the statement could end up becoming a self fulfilling prophecy. I am sure Toshiba must have raised the issue with Warner immediately after the statements were made at the BDA event, leading to Warner's press release recanting the prior statements of their executive.
PS: My post is not intended as a Blu-Ray vs HD-DVD post but simply as an observation from a 'solely' business point of view. Thus, please spare me any posts stating how this price drop and/or HD-DVD is great for the customer etc, etc. Personally, I am not too sure how this could be great for the customer either, since this could actually lead to the very existence, of movies on HD media, coming into question. By the way, I know one 'BIG' company that would be more than happy to see that outcome.
