“Our biggest competitor was that consumers seem to be satisfied” with DVDs, said Toshiba America's Jodi Sally. Thus, Toshiba's decision to can the HD DVD project.
Toshiba's decision is a great illustration of the 10x rule. To shift a market, the product being offered needs to be 10x better than what was available previously. Sure, it's tough to come up with a measurable 10x, but let's face it… good marketers know when they've got a revolutionary product on their hands. And if you do have that revolutionary product, even then you may have to have the patience to wait out consumers. It takes a long time to move a market, especially if you have to move an entire value chain at the same time.
Take, for example, USB. Does anyone remember the old serial cable that USB replaced? USB as a technology was hundreds of times faster, could be easily chained together so that multiple ports could be on a computer, had it's own power, and was easier for the consumer to use. With those kinds of benefits, it would seem as if USB devices should have just flown off the shelves at its introduction. In fact, USB wasn't ubiquitous in the industry until nearly a decade after its introduction.
USB needed an entire value chain to move. It needed the makers of operating systems, computers, and devices to agree and move in concert. It needed retail to become educated, stock and display the devices. And it needed consumers to demand them. It wasn't going to happen overnight. We don't all live in Silicon Valley and shop at Fry's. Consumers don't rush out and buy every shiny new toy like the uber-geeks do.
You would think that the consumer electronics industry understands this by now. After all, HD-TV was introduced in 1998. Here we are in 2008, and it's just starting to achieve mass popularity. Why? The industry needed to move a value chain to HD — content creators, studios, and networks, plus retail. And consumers didn't see a need to buy HDTV's until the content was there. I've owned one since 2001, and it's only been in the last two years that a significant amount of HD content is available.
So, was HD-DVD a 10x improvement? For those with HDTV, absolutely. But nobody gave it a chance. Toshiba introduced HD-DVD in 2006, and canned it two years later in 2008. Toshiba might have given up too soon. Or, as some have argued, uniting behind a single standard might allow the value chain for high definition video to move more quickly. Either way, nobody had the patience to wait for the market.
It's way too early to make a statement like "consumers seem to be satisfied" with DVD.