Toshiba Deploys New HD DVD Marketing Initiatives Based on Strong Fourth Quarter Unit (2 Viewers)

[Adam Gregorich]

Weekly data was available for the first three weeks of December, but the monthly numbers that are the most accurate and include all sales would not have been available until mid January. As David pointed out he [Ron Sanders] never says he saw NPD data for December, but he would have seen it for October and November.

Speaking of numbers, I just noticed how Bill Hunt excluded XBOX add on drives from the NPD numbers that are shown on his site and a few posts earlier. That would NOT have changed the final outcome (Blu having a large hardware lead), but it would have made the numbers look a lot better for HD DVD. I am not wanting to rehash the age old argument "should a PS3 be counteed as a standalone player", but since inception the XBOX add on has been counted as a standalone player when sales are reported since it can only play HD DVDs. Bill chose to exclude them from the charts he created which make them inaccurate compared to how NPD sales data has always been reported.

 

[Adam Gregorich]

Notaking anything away from BD, but here is an interesting article where NPD comments on the numbers:



From Greg Tarr of TWICE: http://www.twice.com/article/CA6524995.html?desc=topstoryhttp://www.twice.com/article/CA6524995.html?desc=topstory

NPD attributed the results largely to promotions run by several Blu-ray supporting manufacturers, and said they were not necessarily the result of reaction to the news that Warner Bros. would be dropping support of HD DVD to go exclusively with HD DVD in May.

• “We’ve been doing weekly data for a long time, and we often times will see big shifts in sales for one week that doesn’t necessarily determine a trend,” said Stephen Baker, NPD Group industry analysis VP, told TWICE. “There were some promotions in the marketplace during that week with Sharp and Sony bundling Blu-ray players with televisions — it seems to me unlikely that consumers would have made that kind of a choice that quickly based on new reports of Warner Bros. shifting from Blu-ray and HD DVD to Blu-ray exclusively.”

Typically, Baker emphasized, big swings in market share are the result of major promotions

 

[Jesse Blacklow]

Not true. The 360 add-on is counted as a dedicated player, not a standalone. You can't just plug it in to a TV and watch movies, so it can not stand alone and play HD DVDs. It needs a 360 or a PC to operate. Toshiba is very tricky with this.

 

[DaViD Boulet]

True.

The PS3 and the 360 present unique challenges in terms of hardware counts which is problematic no matter which side of the fence one is on. On the one hand, every 360 "add on" owner purchased the device with the explicit intent to watch HD DVD movies. On the other hand, it's a device hooked up to a gaming machine and is not a true stand-alone player, and the attach-rate for the add-on may or may not coincide with that of HD DVD stand alones (though it's reasonable to assume that they would be close). In the case of the PS3 it's certain that some percentage of players are used for extensive BD-movie playback, but this exact number cannot be determined. To further complicate semantics, the PS3 is technically-speaking a "stand-alone" player because it doesn't need to be plugged into any other device to play BD movies (that's head-spinner for lots of folks). Then again, the PS3 isn't a *dedicated* player because it's also a gaming console. And while the 360 add-on itself is a dedicated player, in tandem with the console it needs to run it creates a similar PS3-delimma semantically.

For these reasons, some times each side may include or leave out "gaming" HD devices to suit their statistical desire, and justify those arguments on semantic-grounds.

The fact is that all sides are "right", it's just hard to be consistent with both the 360 add-on and PS3 since attach-rates and semantics apply to each product differently. And because of the differences, there's no way to really be accurate with the picture... including the 360 but not including the PS3 isn't fair bcs obviously a great many PS3 owners are indeed buying movies. But it's not fair to include all PS3 consoles either... because obviously not all (or even most) PS3 owners are Blu-ray movie customers. There's simply no way to accurately represent the hardware base for Blu-ray Disc...

But it doesn't matter because...

At the end of the day all that really matters to the studios is software sales. If the PS3 (and 360 add-on) is used in significant numbers to motivate software purchases, then it's affecting the studio's desired result whether or not it affects a particular pie-chart statistic for hardware sales.

However, hardware sales figures and attach-rates will always have the caveat of the "game console issue" no matter what side of the debate one is trying to advance.

 

[Paul Arnette]

And here are some other things a reader might take away from that article:

• Toshiba is near the bottom in HD revenue in spite of having the biggest sales share
• Even Combo players outsold HD DVD players that week

Edited to add:

It would appear that last bullet is not the case. Sorry. Combo players accounted for a 3% unit share to HD DVDs 7% for the week ending 1/12. The unit share difference between the was frighteningly small that week. I imagine it will get better with the price cuts however.

 

[DaViD Boulet]

I also find it hard to believe that the shift *away* from HD DVD was entirely due to BD promotions given how significant the drop was (from the bits):

Week before Warner's Annoucment:

Blu-ray Disc - 15,257 units
HD-DVD - 14,558 units

The week AFTER Warner's announcement:

Blu-ray Disc - 21,770 units
HD-DVD - 1,758 units

Since when in the whole history of the war have *promotions* of one format caused the sales of the other format's hardware to drop by a factor of 8.28? (!)

Promotions would naturally help increase sales for the designated format, but not cause the other format's hardware sales to drop so dramatically. However, this neither proves nor disproves that it was Warner's announcement that kicked off the trend nor does it prove what the long-term sales curve will look like. We'll have to wait and see on that one.

 

[Cees Alons]

But it's different if the numbers of The Bits suddenly left out (Bill subtracted) the 360 add-on sales that were previously present.

No matter the discussion of whether or not they belonged there: it makes the numbers incomparable along the time axis. And that part of the discussions moot.


Cees

 

[DaViD Boulet]

That would seem to imply that both the PS3 and the 360/add-on were not included in the NPD's figures ("video game console" is term that could apply equally to both).

 

[bigluigi]

I think it's quite obvious what happened in December. Blu-ray players spiked simply because HDM aficianados, myself included, determined it was the best time to buy in on an expensive format before prices would go up again in January.
HD-DVD sales lagged because buyers were waiting for $98 specials that never came. A "fall out" from those sales in November. My theory.

 

[Patrick.C]

How do returns factor into this? For example, say 20,000 HD-DVD players were sold, but 19,000 (purchased over the last 30 days and prior to Christmas) were returned after the Warner announcement - would that net out at 1,000?

I know the numbers in my example are unlikely, but there were reports of large numbers of returns (from people that were still eligible) after the Warner announcement...

 

[Adam Gregorich]

NPD doesn't consider the add-on a gaming machine when the numbers are reported (even though it does require one). If MS decided to release a HD DVD XBOX 360 tomorrow (which they are NOT) that would be considered a gaming console by NPD and would not be tracked with HD players since its primary purpose in the majority of homes would be to play games. Since the HD DVD player can only be used for HD DVD playback (and there is no other reason to purchase one) it gets counted as a stand alone and is factored into the attach rate.

David, I agree with what you said about the unique challenges of how to count certain devices, my point (which Cees said beter than I did) was that they have been counted a certain way for the last year plus, and it shouldn't be changed by one person to meet their definition (unless they work for NPD ). I know there are a lot of opinions for how different devices should be counted and I don't want to get into that discussion. (I actually have no idea what the right answer is...It's somewhere in the middle but I'm not sure where).

 

[BrianB]

Returns are not considered in NPD figures, just units sold through POS systems.

And so far, there's been absolutely nothing reliable to suggest the PS3 is going to suddenly drop to $299 on Monday.

 

[DaViD Boulet]

Thanks for clarifying. I wasn't aware that Bill had gone the additional step of factoring out the 360 add-on after the numbers were provided. Question... how does one get the actual 360-add-on sales figures by themselves? Does NDP provide that as well or was that via another source?

Cees and Adam, I agree it makes sense to keep the way that the numbers are derived consistent over time to compare apples-to-apples. Of course, as long as Bill treated the two weeks before and after the Warner annoucement, the same, then his comparison of those two points in time is valid (though not comparing to other weeks).

 

[nolesrule]

Is it possible that Bill just assumed the numbers excluded the Xbox add on and that he didn't actually subtract the number?

I ask because since they do exclude PS3s, you could make the logical leap through a simple misunderstanding.

 

[Cees Alons]

David,

Yes and no.

Once the new publisher tampered with the data, they're no longer NPD data. It's as simple as that: you either use the data or you don't. You cannot label them "NPD figures accent", 'accent' meaning: changed by TNP, on his decision alone.

(a) A question that immediately arises in matters like these is: why were they changed?
Again, I'm not going into the reasoning itself behind it, but apparently they were changed to suit the new publisher one way or another. You don't have to agree or disagree with the way it suited him, but those are new numbers now, with a new underlying goal. Which ought to make them suspicious immediately.

BTW: this is exactly why there are official bookkeeping rules, prescribing how businesses need to present their financial results.

(b) Assuming the new publisher's maths are correctly done on his own figures, there's another problem: they lack any authority.
The NPD figures are well-known numbers used over years and months by the industry, with confidence that they are assembled as best as can be done, as well as having a composition determined by meticulous decision processes made by a competent group of people and watched over the years. Meetings have been dedicated to the exact composition of those numbers. That all is designed to give them the authority of being "the NPD numbers".

If the new publisher, or anyone else, challenges that authority: he certainly has the right to do so. But we are entitled to a thorough scientific explanation at least. And it won't transfer that authority automatically to new own statistics presented by himself.



Joe,

That might be possible, and if this new publisher didn't do the above, then he's of course not guilty of that. But then we have another problem: he doesn't know, nor do we, what exactly he's talking about. And he stated the exclusion of the 360 add-ons several times!


Cees


Edit: I have since learned that the use of the name of a sister site of this forum and its Editor can give rise to misunderstandings about the nature of this post. It was never meant in an accusatory way, so out of respect for both, I removed those names from my text.
C.

 

[DaViD Boulet]

Cees,

if Bill really did alter the figures I agree with your assemssment, including not being able to describe them as "NPD" after the fact.



Good question. Has anyone actually compared the "original" NPD numbers against what Bill posted? Unless the NPD also supplied Bill with the figures pertaining to 360 add-on sales only, I can't see how he would have even had the number to do the subtraction.

I wonder if it's all a miscommunication/interpretation: I read the NPD statement to exclude the 360 when it read "no gaming machines" because I didn't realize they had a different categorization for the 360-add on. What if Bill just made the same mistake and is just assuming that the 360 isn't in the numbers when in fact it is? If that were the case, no harm no foul.

I'll try to get in touch will Bill to confirm, and if anyone has access to the NPD numbers outside of Bill's post, let us know how they compare.

 

[Paul Arnette]

I suppose it is possible. I would be interested in knowing definitively one way or the other. However, if the 1,758 HD DVD units reported on the Bits for the week ending 1/12 included the XBOX 360 Add-on, then those numbers are astoundingly pathetic.

 

[Adam Gregorich]

The last time I saw numbers for the add-on was November. Here are "ballpark" numbers (rounded down to nearest 1k)
Sept: 15k
Oct: 38k
Nov: 19k
I have no idea what they were for Dec and so far this January, and it is probably safe to assume that they decreased. When it comes to hardware and the NPD numbers is is best to look at the monthly numbers. The January numbers won't be out until mid-February.

Speaking of numbers...There were some quotes from Philips at CES saying they were very pleased with the sales of their BD player and had sold out the entire run. I had to laugh when I heard that. I can't say the exact number without getting into trouble, but lets just say that if I had a dollar for every player that they sold from the time they released it (I think Jan 07) through this past November, I would maybe have enough to take my wife to an OK dinner (Chili's, Applebees, Outback, etc) a movie with a jumbo popcorn and have enough for the babysitter. If my wife wanted candy with the popcorn I would probably have to dip into my own funds. Compare that to if a had a dollar for every Sony or Samsung, I'd be on a 5 star African safari right now....

 

[Douglas Monce]

This adds an interesting new wrinkle to all of this.

BetaNews | NPD: Free Blu-ray player deals led to boosted sales this month

Doug

 

[DaViD Boulet]

Good find Doug.

Two very interesting things.

The first has to do with the rise in BD sales (not necessarily the drop in HD DVD sales):


Maybe Bill didn't manipulate the numbers after all?