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Toshiba Subsidizes $200/Unit on New HD Player
WestTexasWaltz writes "According to a teardown analysis, Toshiba is losing $200 per unit, of its new HD DVD player, in order to gain some marketshare. Interesting that integrated circuits account for more of the cost than the drive itself. Also, this particular analyst concludes that Blu-ray and HD-DVD will "not be a repeat of VHS vs. Beta" and that a stalemate is the likely outcome."
What a crock. Thanks, but no thanks, I'll just stick with DVDs until Blu-ray loses this battle and the prices come down on HD-DVDs.
The cheap china manufacturers coming out with units that play both HD-DVD and BluRay discs... and pick up a player cheap at WalMart (or whathaveyou) for $100.
It's DVD-R and DVD+R all over again. Only with slightly better picture quality, if you have the right setup.
I don't give a rat's ass about HD-DVD or BluRay or any new format... until a player comes out (third-party hacked or not) which overcomes the MPAA's nefarious ideas about region encoding or forced chapters. If you want some market share, grow some balls and deliver a machine that plays the media *I* purchased anytime that *I* want to, without sending a colorectal scan to the governments and corporations of the world. And while you're at it, make false advertising phrases like "Own it on HD-DVD today!" completely off limits.
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I predict the winner will be... DVD!
--
"Open source is good." - Steve Jobs
"Open source is evil." - Microsoft
I'm suprised that Slashdot hasn't mentioned that these machines use RedHat Linux. Yes, people complain about the boot-up time.
Since it's a standard Pentium 4 PC design, it seems pretty obvious that the player software will be "liberated" eventually.
Whenever I hear the word 'Innovation', I reach for my pistol.
So, is the fact that they're massively subsidizing the HD-DVD players a sign of trouble for Toshiba, or like everything else is it only a bad thing when Sony does it?
Anyway I for one will just sit and wait a few years until Samsung finally gets their way and gets to start making hybrid players that support both HD-DVDs and Blu-Rays. Samsung's said they want to, they're just being held up by consortium politics. I think those consortiums will get a little more lenient once time passes and they realize everyone's still just buying DVDs.
That law only applies to monopolies abusing there power to gain a monopoly in a different market!
Oh and it doesnt count anymore if you sponsor the party of the president. (better sponsor both candidates)
200GB/2TB $7.95 Coupon: SAVE90DOLLAR
If that's true what will end up happening is that anybody who makes a player to play both will end up paying twice as much in royalties. Good times.
This sig has been temporarily disconnected or is no longer in service
No its called a loss leader, it's a common practice among the likes of walmart, and other large corporations. The supreme court has ruled that loss leaders are not unconstitional, A big mistake if you ask me. Actually many countries allow loss leaders, the most notable example an exception of a democratic nation banning loss leaders is when Germany banned them a few years ago.
It "is", under certain circumstances (overseas dumping, or abuse of a moonoply position), not in general. People here may tell you otherwise, but that's because they're "idiots".
What I'm listening to now on Pandora...
I don't happen to agree with the analyst that the format war won't be a nightmare. But maybe I'm wrong.
So, the best test I can come up with is asking early adopters if they plan on buying either player, or if a dual format player if it were available. Slashdot tends to have a lot of early adopters, so how about it? Is anyone chomping at the bit for these things, or will the format war and the "good enough" state of current DVDs relegate this product to the likes of Laserdisc and Sony Minidisc?
AccountKiller
http://en.wikipedia.org/wiki/Dumping_(pricing_poli cy)
It's only illegal if they are selling for a substantially lower price in foreign markets compared to domestic markets. So in Japan, if they sold it for $2000 (US), then it would be dumping.
Otherwise, all free products would be illegal.
I know how a definitive winner could come about. Sometime before Christmas this year, Blockbuster and Netflix and Best Buy get together and agree to evaluate both the HD-DVD and Blue-Ray on terms of quality and price. Then they declare a winner. There is no way in hell either Blue-Ray or HD-DVD would survive if all three of them together said, "We don't want to stock more than one type of hi-def DVD. And this is the type we choose." Whichever they chose would thrive and whichever they dissed would die. Of course the longer they wait, the harder it will be to break the stalemate.
The only places HD-DVD are even mentioned anymore are Xbox 360 sites and a few tech sites like this one trying to generate hits in portraying some sort of 'format battle' with BluRay.
The battle was fought last year. HD-DVD lost badly. The studios have rallied around BluRay. As 1080p TVs fall into the sub-1000 dollar range over the next year there will be a battle between people sticking with the old DVD format. And then life will move on with BluRay until the next standard comes about a few years later.
Just wait 3 months until someone finds a crack, then buy one that lets you be in control of your own products. There has never been an unbreakable DRM scheme and there never will be, until we all have digital eye and ear implants.
Predatory pricing is only illegal when it is done to acquire or sustain a monopoly. Toshiba is in no way a legal monopoly, whereas Microsoft is a monopoly and has been legally declared such in court.
It's kind of like how owning a gun is only illegal when a convicted felon does it. Do you complain about the injustice there?
Like a gun, it's not predatory pricing itself that's illegal. It's what you do with the predatory pricing that's illegal. Toshiba is in this case not doing anything anything in their action of selling HD-DVD players below cost which qualifies as illegal.
Since I don't follow Blu-ray vs HD-DVD too closely, is Toshiba the only manufacturer of HD-DVD? What is their incentive for marketshare in this area?
From the article:
I heard that video game consoles being loss leaders was an urban legend, perhaps due to faulty analysis. The companies, especially Nintendo, break even pretty much at time of launch. Or may take a slight loss but nothing like $200 per unit.
Wow, such insight. Given that the reason we had to "choose sides" before was that VHS and Beta were analog systems and were physically incompatible, I don't understand why anyone with half a brain would compare it with this. It seems downright obvious that what we're probably going to end up with is combination HD-DVD and Blu-Ray players. Evidence DVD[-RAM|-R|+R] drives. The only argument left is whose obnoxious DRM is going to ruin the party.
If a job's not worth doing, it's not worth doing right.
Specs: P4, 1GB RAM, 256MB Flash, 32MB MirrorBit Flash. And apparently runs Red Hat.
Is that overkill or what? Sounds like they don't have all the decoding hardware ready, so they went with that. Otherwise, all decoding could be done on a specifically designed chip, not needing anything as powerful as a P4, and I don't really see what they want that much RAM for. The flash size can probably fit the required parts of the OS without any trimming. Either that, or they've got lots of graphics there.
What I have not seen so far is any kind of convincing argument that explains why the combination of a Blu-Ray drive in every PS3 along with higher capacities does not mean pretty much an automatic win for Blu-Ray.
Yes the PS3 is expensive. Put that aside for a second, does anyone doubt that millions will sell in the US alone within months of the launch? That then in turn is a few million consumers that will be able to play Blu-Ray media, and you know Sony is not going to pass up a chance to push Blu-Ray along with the PS3 including some Blu-Ray media in the PS3 box.
Contrast that against the still very expensive Toshiba player, and less than thirty HD titles. How long will it take to even get 100k units sold?
Studios would seem to agree with this assesment as there are more studios backing Blu-Ray than HD-DVD.
On the computer front for storage alone, why would you buy an HD-DVD burner when Blu-Ray discs hold more data, and the blank discs themselves seem to be cheaper (in a Slashdot study of Japanese HD media a few months back the HD-DVD 20GB media was more expensive than Blu-Ray 25GB media).
I can't see personally how the situation looks anything like a stalemate. It looks like a rout in the making. Would HD-DVD even be around if Microsoft was not still backing it? And would HD-DVD even still be pushed by Microsfot if it was not for HD-DVD using Microsofts own menuing system for movies (for which they would of course collect licencing fees), not to mention Blu-Ray using a menuing system based on a form of Java? Microsoft seems to be backing HD-DVD more out of hubris than anything else.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
While Sony, by cramming a $500 to $600 PS3 down our throats, has decided to lose the war.
...
It's that simple.
Look, the major revenue is not the players themselves - it's the licenses for the patents from the manufacturers, the license fees from the people cranking out the discs (HD-DVD or Blu-Ray), the license fees from the music, the movies, the motion
You get the drift.
You can either play to win - or you can lose and look good doing so.
-- Tigger warning: This post may contain tiggers! --
I'll probably be getting a PS3 and so will have a Blu-Ray player...
Having had a taste of HD video (on Dish, which I eventually cancled due to repitition of content) I actually am looking forward to some movies in true HD. Even 720P looks so much nicer than even normal digital cable, you don't need to get a 1080p set for dramatic effect.
I'm putting off buying the new Star Wars box set until a re-release in a higher definition format.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Presuming that since HD-DVD and BLU-RAY are roughly equivalent products that players for each have roughly equivalent components does that mean Sony has a $300 profit - a 43% margin (minus whatever the middlemen skim off) on their $1000 BLU-RAY player?
Rather than go for market share now (which they can get later this year with the PS3) they have opted to get players into the hands of people for whom $500 or $1000 is not much of a difference, and make some profit in the meantime.
I honestly cannot see Toshiba grabbing a lot more marketshare with a $500 player than Sony with a $1k player; Given how few titles are out at the moment both are impractical for the average (or even not so average) consumer.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
There was a story some months ago about studios considering dropping region coding for both formats, but I've never seen a followup to see if that's the case.
One nice thing for those in the US is that even with region coding on, for Blu-Ray Japan and the US are considered to be the same region. Great for games and just as good for anime.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Netflix and Blockbuster deal in discs, not players. Most of the movie studios will be bringing their films out in one format or the other, not both. HD-DVD has Universal; Blu-Ray has 20th Century Fox, MGM, and Sony Pictures. That means for many films, they'll have to stock one format or the other but not both, or not stock the hi-def at all. Which means overall, they have to support both formats, and it's up to their customers to have the right player if they want to see a movie from a studio aligned with one side or the other.
Three are a few studios, notably Paramount and Warner, that are going to try to do both formats. There, Blockbuster and Netflix may have some say. Netflix has stated that they'll support both formats, but until the actual discs appear I don't know what that means. They're gonna hate buying three copies of movies (HD, Blu, regular DVD), but it sounds like that's what they're gonna do.
Dude, for $500, I can play Red Steel and about 15 other games on the Wii, and ignore the format wars until I actually buy an HDTV that's big enough for me to care, in about three years when they'll be selling for $300 on sale. Including the Star Wars game coming out where you battle with light sabers as your Wii controller literally sounds like it is a lightsaber ... or a blaster ...
Not everyone likes to spend more than $500 on a lark.
[caveat - I liked the E3 demo so much, I sold my 400 shares of MSFT and bought 500 shares of Nintendo ADR]
-- Tigger warning: This post may contain tiggers! --
All that proves is that you are NOT a Videophile and are certainly NOT a Audio/Videophile early adopter. The fact is Stores are having a hard time Keeping the Toshiba HD-DVD's on the shelf. People are buying them, and the price support is is helping that I am sure, the price is not too bad the PQ is awesome and they do a heck of a job upconverting. And us Videophiles DO care about SD vs HD. I can't certainly tell and enjoy the difference in PQ betwee SD and HD on my fine display.
My decision was already made the other day, courtesy of Slashdot's story on the first 3 Blu-Ray offerings, of which "50 First Dates" was given as the reason to go HD and see Adam Sandler's every pore. Clearly, these people are not SERIOUS about selling to any but the most fanatic Early Adopters.
I can wait. Specifically, I can wait until they issue "Apocalypse Now" and other cinematographer's triumphs in 1080p and you can get a large 1080p TV and a player for it (that either plays the winning format, or both formats if the War is protracted) for a total under $1500.
With DVDs, I note that one can currently get computers (MythTV, etc) that will ignore all the playing restrictions. Here's my "horror" story on that.
I have a nice Pioneer DVR/DVD player (520H) that never met a DRM instruction it didn't obey slavishly. Not only will it not so much as record from a protected video tape, or tape made from DVD (that THAT, analogue hole) but it won't FFWD during the FBI warning or any of the corporate logos, or *ADS* if they choose to put that rule on their disc. The screen shows "That Operation is Forbidden by This Disc" when you hit the remote button repeatedly while waiting some minutes for your movie to actually start.
The other day, I popped in a disk while some news was on, and it started loading. Just at that moment, major breaking news hit the TV channel...and the DVD screen started showing the FBI warning. Frantically, I hit the STOP, then the EJECT buttons on the remote. But no, even those just got "That Operation is Forbidden By This Disc". Nothing could make it stop showing the FBI Warning and go back to the TV feed.
On discs with trailers and ads you can't skip, I've learned to pop in the disc and walk away from the TV for several minutes, because I get so mad if I stay. It's so great to put DVDs in my computer upstairs, where Kaffiene cheerfully skips all that crap and goes right to the movie I paid for, when I hit "go to Menu".
Maybe the computer world will defeat the DRM on an HD disk enough so that I can be the one to say what the computer is forbidden and allowed to do; that would make me opt in to this new technology, too.
But for a couple of years, I'm just going to wait and see. See DVDs. With a Linux media-computer that puts me in charge of my own damn living room.
Unless the DRM situation with these things changes drastically (for the better, that is), I wish them both death by a thousand stalemates.
Even if that comes to pass, don't bet on the big players seeing DRM as a major factor in the formats' demise. However, if they watch a boatload of R&D capital go down the drain while outlets of unencumbered content (e.g. mp3tunes.com and emusic.com) gain market share, who knows - perhaps a light could go on somewhere, or perhaps a foundation or open consortium could spawn an *open* storage format & device / communication spec that DRM-bent interests don't control.
The funding obstacle to this is monumental to be sure, but the most likely way to put a stake in DRM would probably be for an open standard for HDTV devices (storage, communication, playback) to gain traction in consumer devices. Sure, they wouldn't work with HDCP / 5C content, but that's the point. A third of the commercial devices won't interoperate either, given the bugginess of so many implementations. Utopia would be to see something like an EFF branded HD PVR, with open licensed blueprints allowing free manufacture thereupon on the condition that no DRM of any kind be enabled.
Pi Ran Out
HD-DVD/Blu-ray is just not worth it in my opinion. I have a 50" Sony HDTV and an upconverting DVD player and I am very pleased with the picture. I was at an electronics store watching The Last Samurai on a good sized TV for nearly twenty minutes before a salesman asked me what I thought of the new HD-DVD format. I was completely underwhelmed and didn't even realize I was watching an HD version of the film until the salesman told me. With players that cost C$700 and movies that are over C$35 each it just doesn't make economic sense to me.
I think both HD-DVD and Blu-ray are a bust.
Perhaps because you want a disc player with a user interface that isn't a pile of turd? Every built-into-a-console dvd player I've ever used has been a piece of junk and has had serious issues with video quality ...
Yes that would be nice, but I can live with a somewhat poorer interface for a savings of hundreds of dollars. I would like a blu-ray or HD-DVD player but I simply cannot justify a standalone unit, while I can justify a Blu-Ray and game console together (especially one that can replace an aging PS2 and also play new games).
I actually used the PS2 as my only DVD player for about a year before standalone players dropped to the point I was willing to buy one. It was not actually that bad to use after buying the remote.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Not sure where you get your math, but 720p has 3x the pixel count of 480p, not 1.5x. Furthermore, NTSC DVD is not 480p but rather 480i. 1080i, which the HD-DVD does do, has 6.75x the pixel count of NTSC DVD. Then there's the matter of what equipment is used to produce the content, but why you would choose a lower resolution mode to compare format resolutions I have no idea. Additionally, exactly what is HD sound (wrt video) and do you expect it to be included in your bittorrent downloads? Is current AC3/DTS inadequate or are you just counting bits?
It's nice that you believe "the market" will deliver a better product to your HTPC but what is "the market" you refer to? Content owners or bootleggers? The motion picture industry wants to sell you DRM'ed discs, not free downloads to your PC.
Another thing, assuming you pay for the disc OR the download, one benefit of the disc is it ADDS 25GB (in your example) to the capacity of your playback system. With the download, you pay perhaps 1/4 the cost for the HD space as you do for the disc, but the hard drive is not archival media, the download costs of your internet connection aren't included, and you still haven't paid for the movie. I guess your model makes sense if you intend to download for free via bittorrent/p2p, you have broadband, and the opportunity cost of tying up your connection is reasonable.
Would you be willing to pay $1 per GB for the movie, $0.35 for the non-archival storage space, and a monthly fee for broadband? I'd rather buy the disc and rip it.
they seem to be listing the full retail cost for the memory module. Why would toshiba be paying retail price on anything in the unit? wouldn't they be buying wholesale? if all their numbers are off, that's up to a 30% inaccurate estimate for the price of the parts. which takes away most of the 'so called loss lead per unit'
anyways, they could be taking a loss per unit, but i am really skeptical about the numbers being given in the parent article.
https://www.gnu.org/philosophy/free-sw.html
yep, they sold both copies of the one movie available.
The phrase "more better" is acceptable English. suck it grammar Nazis
So the HD-DVD movies are almost out of space as it is and there seems to be no space savings at all in using MP4 over MP2. And it seems that space is at more of a premium than we had thought, with Blu-Ray having a distinct edge once dual layer discs arrive.
You're ignoring a few critical details: bitrate and quality.
If you take a 6gb dvd encoded with mpeg2, you can encode it at the same quality using 2gb of space.
I could encode a bluray movie in 2gb, but it would look like crap. It in no way means that the new codecs are somehow yielding poorer results than mpeg2. Given two files of equal size, one encoded with mpeg4 or vc1, and one encoded with mpeg2, the mpeg4/vc1 file will be closer to the source material than the mpeg2 file.
The logical response to your observation is that the final size of the encoded video is being dictated by the total amount of content provided on the disc, not by the amount of space available.
Toshiba has a lot of the IP behind HD DVD. They stand to get a few bucks from 10's of millions of (legally licensed) HD DVD player manufactured in the next decade -- but only if HD DVD wins.
Loosing a few bucks on initial HD DVD shipments is chump change in comparison.
*golf clap*
Bravo for being one of the schleps who's gotta have the latest toys. I, as a sensible consumer, appreciate the monetary sacrifice you've made so there's one less revision 1 piece of crap on the shelf at Best Buy.
AVphiles don't go out and blow a wad of cash on unproven junk. They purchase well tested and well thought out hardware so they can enjoy their music/videos without having to worry about upgrading in the next three to six months. If you read anything about that Toshiba Blu-ray player, you'd know it's crap (doesn't even do 1080p).
Thanks for playing.
Why is it that all chineese designed stuff has CRAP remote controls.
* crap looking designs, made by engineers that probably only have used remotes themselves in the last 5 years, not from 1985 when they were kids. Having
that indirect experience of good/crap remotes help in design.
* week IR power, why is it their remotes are so damn week, needing 30deg field or 5ft distance? Do they use crap LEDs or bad software reading it?
Are their test clients living in closets? Common, get with it, even in 1990 we had sony remotes working at every angle from 30 feet.
* crap battery covers, that break the clips or come loose. Get a clue designers
Spend the $40k and get someone in germany to design it. Not your 12 year old 'wizz kid' for $12 and 9 kilos of rice and a PS2
Liberty freedom are no1, not dicks in suits.