HD-DVD Players for $99 – Tipping Point or Tipping Cows?

November 6, 2007

image Michael Gartenberg, wizard of digital media at Jupiter Research recently blogged  about  the new round in the HD format battle. With Best Buy following Wal-Mart in offering Toshiba HD-A2 HD-DVD players at a swank $99, Michael notes, "At that [price] point, it’s not a competition between HD-DVD and Blue-Ray, it’s a competition (correctly so) between HD-DVD and DVD."

Frankly, the whole topic jumped the shark for me nearly six months ago.  But the whole price war has really piqued my curiosity.  I wonder if Toshiba and its partners can keep the prices that low and for how  long?  Either way, Michael has an interesting point – "With prices that low, backwards compatibility and some very good content starting to appear (the Heroes Season 1 Box Set, Transformers and soon the first season the original Star Trek series) we may be getting to a point this holiday season that could tip the balance."

Back in February, I did a quick analysis of the price points for the formats, based on Amazon.com price points for the top players in both formats.  While unscientific, this yielded an average cost of nearly $850 for BD and $400 for HD-DVD (not including game consoles).  While it’s clear that BD players have made the most movement, it’s unclear when or if prices will drop to this price on an average basis.

And Sony’s response to the HD price event?  "Blu-ray will be down to $399 and slightly below that, but not much lower," according to Sony Electronics President Stan Glasgow.

Whether Toshiba was looking to move old inventory (as in a unit that first shipped Q1CY07), or this represents a tipping point in the HD format battles is unclear. Either way, the PR and marketing value of HD-DVD becoming synonymous with "Affordable HD on a disc" is palpable.

Whichever way this one goes, my advice still remains- sign up for NetFlix or Blockbuster’s online service and receive whichever format you prefer without purchasing the discs until the whole format war is sorted out.

Note: I do not work for nor with the HD-DVD effort at Microsoft – all comments are my own and not representative of my employer.