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Winning Converts

22 Apr, 2005 By: Erik Gruenwedel

One of the keys to winning a commercial war is winning over the hearts and minds of the consumers.

Blu-ray Disc and competitor HD DVD have each established marketing arms and related Web sites with the intent of establishing beachheads in the battle to market the next-generation, high-definition disc.

Both sides appear dressed for battle with no front in sight, although the HD DVD camp has thrown down a gauntlet of sorts in announcing a slate of titles for the fourth quarter. Though not saying so, both sides may be holding steady, while reported negotiations for a technical compromise between the two formats are under way. Reports say the two sides are haggling over which parts of each technology to include in the hybrid.

“We haven't finalized or announced all of our launch plans for HD DVD,” said Jodie Salley, VP, communications, with Toshiba USA, the prime consumer electronics (CE) backer of HD DVD.

“We are not at that point yet where we want to take up retail floor space with point-of-information displays when we don't have any products that are ready to go yet,” said Andy Parsons, SVP, industrial solutions business group, with Pioneer Electronics, a key proponent of Blu-ray Disc.

Laying a foundation, nonethelessSupporters of HD DVD — which include CE manufacturers Sanyo Electric Co., Memory-Tech Corp., NEC Corp. and Toshiba, and content providers Universal Studios Home Entertainment, Paramount Home Entertainment and Warner Home Video (WHV) — earlier this month held their inaugural HD DVD Promotion Group meeting in Tokyo.

The group, which claims 83 member companies, said in a statement that the meeting “marked an end of its preparatory phase” with the intent of fostering “joint promotions and exhibitions and other events.”

Last week and next month, HD DVD demo hardware was, and will be, on display at separate technical confabs in Las Vegas. In addition to demos, HD DVD marketers plan to target owners of high-definition televisions and display devices, which Toshiba estimates could reach 20 million units sold by the end of the year.

Through the use of retail point-of-purchase displays that include HD DVD monitors and dual-sided DVD/HD DVD software, Toshiba in the fourth quarter plans an aggressive consumer launch.

“I don't think there are going to be a lot of challenges in educating the consumer for HD DVD, largely because of the backward-compatibility with current DVD,” Salley said. She said subsequent marketing efforts would target home theater retailers.

A WHV spokesperson said she was unsure of a dual-sided disc software launch. “It is a bit early to say [what type of product display] is going to be worked out,” said the spokesperson, adding the marketing process “probably won't start until the middle of the year.”

Blu-ray Bets on Brands
The Blu-ray Disc Association, with more than 115 members, announced in March that Apple had become a member of the consortium's board of directors and joined its promotions committee.

The news is significant not only because Apple's H.264 compression technology represents a counter to Microsoft's Window Media Video 9 — announced last week as the HD compression format of choice by WHV — but, more importantly, because Blu-ray backers contend the pedigree of supporting companies, such as Apple, would enable the format to overcome HD DVD's anticipated first-to-market status.

“What it means to the retailer is that most of the companies that make up the Blu-ray Disc Association are the ones that are very well recognized as far as CE manufacturers, and we all have pretty good relationships with the large retailers,” Parsons said. “Those are the brands early adopter consumers are most likely to go hunt for.”

Parsons said CE manufacturers on both sides of the issue have been quietly discussing their formats with retailers. He admitted retail feedback hasn't been all positive, with the prospect of two formats going to market a concern to all. “We are starting to contemplate the abyss here,” he said. “Consumer confusion never helps launch any format.”

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