Wednesday, December 06, 2006
Marketing Decisions Impede the Spread of HDTV Technology
It seems that High Definition Television has hit another snag that will get in the way of it becoming mainstream. While High Definition Television technology has been popular in Japan for years, there have been a number of impediments to the high resolution, wide screened television format being widely adopted in the United States. These barriers have included high cost, lack of availability of supporting equipment, and an inability to educate consumers about the new technology.
Major electronics companies have taken steps to turn many of these problems around, and in the case of supporting equipment, High Definition Digital Video Discs are now available and High Definition Digital Video Recorders will be available shortly. However, in the case of the High Definition Digital Video Disks, there has been a considerable set back with the introduction of two competing- and incompatible- formats.
HD-DVD is one of the formats and the other is called Blu-ray. Both take advantage of blue lasers which can encode information more finely on a disc than the red lasers used on standard definition DVD's, but certain subtle differences between the two technologies render them incompatible. The Blu-ray technology appears to be the superior format because a Blu-ray disc can hold significantly more data than an HD-DVD disc. This advantage is offset to some extent by the fact that a Blu-ray player is about twice as expensive as an HD-DVD player. Another thing complicating the entire situation is the fact that each format is backed by some heavy hitters in the home electronics, computer manufacturing, and software industries.
Since it's generally agreed that only one format will survive the war, consumers have been hesitant to purchase equipment or discs that use either format. The general fear is that whoever picks the losing format will be left with an obsolete and worthless chunk of electronics much like the fate of people who bought Betamax VCR's back in the eighties.
To remedy this situation, companies on both sides have been trying to make their format look more attractive. One thing that might have made a difference was the introduction of a device that could both record on and play Blu-ray discs. This would have made the Blu-ray format more attractive because it would appear less risky to consumers. After all, if you can record using a certain format, it doesn't matter as much whether or not any movie or software titles are sold in that format, because you can make your own High Definition Digital Video Discs. That way a recorder-player in either format would still have some use to the person who bought it even if the format died out in the market place. This would benefit the format who was able to introduce one of these devices first because if it prompted more people to buy electronics, software, and movie titles using that format, that format would be the more likely one to survive.
Now all of that appears to have gone up in smoke with the announcement that High Definition Digital Video Disc recorder-players using the Blu-ray format won't be released in the United States. At least not by Sony or Panasonic. The reasoning behind the decision is that most Americans prefer to record video using Digital Video Recorders like TiVo, and that at $2,500 the Blu-ray recorder-players will be much more expensive than Americans are willing to pay for.
Unfortunately Sony and Panasonic are probably right. At least in their analysis of what Americans are willing to pay. This is just another false start in HDTV's move toward the mainstream.