Blu-Ray and HD-DVD: The End Game
|
Case Code: BSTR287 Case Length: 14 Pages Period: 2006-2008 Pub Date: 2008 Teaching Note: Not Available |
Price: Rs.300 Organization: Sony Corporation, JVC Industry: Consumer Electronics Countries: USA, Europe and Japan Themes: Innovation, Failure |
Abstract Case Intro 1 Case Intro 2 Excerpts
"We carefully assessed the long-term impact of continuing the so-called 'next-generation format war' and concluded that a swift decision will best help the market develop."
- Atsutoshi Nishida, President and CEO of Toshiba Corporation, in February 2008
"It took DVD ten years to get where it is. Blu-ray is two years or three years into its launch, depending on when you consider the start to be. There is a long way to go for Blu-ray."
- Stan Glasgow, CEO, Sony Electronics
"The horse that we're fundamentally backing is the one that says the future of entertainment content is online digital distribution. I would argue that we backed the right horse."
- Neil Thompson, Senior Regional Director, Northern Europe, Entertainment and Devices Division, Microsoft, in April 2008
Toshiba Gives Up!
On February 19, 2008, Toshiba Inc. (Toshiba) (Refer Exhibit I for information on Toshiba's product profile) announced that it would begin to reduce shipments of HD DVD players and recorders to retail channels, and would wind up the business by the end of March 2008. It also planned to end volume production of HD DVD disk drives for PCs within the same time frame. As far as notebook PCs with integrated HD DVD drives were concerned, the company said that it had not taken a decision yet on whether to replace these models or not. It said that it would, however, continue to provide support and after-sales service to all HD DVD products.
Toshiba's stock price on the Nikkei had gone up by 5.7 percent on February 18, 2008, in anticipation of the impending announcement about the withdrawal. After the announcement was made, the share fell by 0.6 percent. Toshiba's decision to pull out of the High Definition4 player market was taken after its HD format faced several setbacks in early 2008. On February 11, 2008, Netflix, a US-based online video rental company, announced that it would stop stocking HD DVD disks and on February 15, 2008, Wal-Mart, the world's largest retailer, said it would only sell Blu-ray players and disks.
Earlier in January 2008, Warner Bros. had announced that it would release movie titles exclusively in the Blu-ray format (Refer Exhibit II for a comparison of Blu-ray, HD-DVD, and DVD). Explaining his company's decision, Barry Meyer, chairman and Chief Executive, Warner Bros, said, "The window of opportunity for high-definition DVD could be missed if format confusion continues to linger." Warner Bros had been releasing its movies in both formats till then. Apart from the dwindling support from content providers and retailers, the fact that Blu-ray hardware (players, recorders, and drives) and software were outselling HD DVD gear would have influenced Toshiba's decision to discontinue production, analysts said. While Toshiba's announcement of stopping production of HD DVD players spelt the end of the format war between HD DVD and Blu-ray, it looked as though the Blu-ray had become the de facto standard for next generation optical storage media. However, analysts were not too sure whether this would result in a financial windfall for Sony and the other backers of the Blu-ray format...
Buy this case study (Please select any one of the payment options)
| Price: Rs.300 |
Price: Rs.300 | PayPal (7 USD) |
