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Don’t be too quick to trash high definition DVD

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.   

{ 5 comments… add one }

  • Mitch Brisebois February 25, 2008, 5:36 am

    Too early? I remember seeing my first HDTV in the early 90s in a Bell South demo lab in Atlanta. I thought it was pretty cool, but most people couldn't tell the difference with regular TV. I don't think much has changed. People aren't going to switch on "quality" alone. The move to DVD from VHS wasn't just about a better experience, but the convenience (and no rewinding). With MP3s, people are ok with crappy sound for the convenience and portability of the format.

    Strange, but true: quality is under-appreciated!

  • Michael Graves February 25, 2008, 7:43 am

    Toshiba's comment doesn't take into consideration Blu-Ray. Not making that statement is political face-saving on their part. As you argue they need to move the entire value chain, but were unable to sustain the support of a significant mass of content creators…the studios.

    To those of us with HD-DVD players (mine is an HD-XA1) we could see that this battle was over by mid-2007 when HD-DVD releases slowed to a trickle. No new content..no reason to buy the players. At the very same time Blue-Ray releases stared to come in good numbers and from a variety of sources.

    Now the really good question to ask revolves around did Sony & IBM really make a deal with Toshiba involving dropping HD-DVD in return for additional rights to the cell processor or and related manufacturing in the far east?

    BTW, I work for a broadcast hardware manufacturer. We started delivering HD gear in late 1999. There was essentially nothing to watch in most markets until much more recently.

  • Brad Templeton February 25, 2008, 11:23 am

    Well, strictly speaking, HDTV has about 6x the pixels of DVD, though since until recently most people have had 720 line HDTVs it has only been 3x.

    And there's a reasonable argument that 3x pixels is really only a 1.7x improvement in resolution, and 6x only a 2.4x improvement. So nowhere near the 10x you are looking for.

    In addition, due to the resolution limits of the human eye, many people with 1080 line TVs are not able to see all those pixels, and their improvement is somewhat less.

    However, the difference over broadcast TV and especially VHS was much greater. That's closer to 10x.

    However, many people do find this to be a order of magnitude anyway. It's of the level that "once you have HD, you hate going back to SD" which is enough.

    It will get better when few people have SD, because then TV will get composed for HD (less need for close-ups that lose the context) and that will make a qualitative improvement.

  • Billy February 26, 2008, 2:21 am

    > many people with 1080 line TVs are not able to see all those pixels

    that’s the point, brad.

  • Alec February 26, 2008, 3:35 am

    Granted. You can definitely see the difference on my TV, but it's a 62 inch set. Also, there are an awful lot of 40 inch sets being sold today as "high definition" with much lower pixel counts than the HD spec would demand. For example, a common practice is to reduce the number of horizontal pixels. True HD is 1080×1920, but I saw a lot of sets out there last Christmas with on 1024 pixels horizontally. The image suffers when you get past 40".

    For most people, however, it's not until they see SD and HD side by side that they appreciate the difference. For example, my wife (who regularly watches SD content on that big set!) commented on how awful the commercials looked during the hockey game last night — SD content inserted into the middle of an HD stream.

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