The Stratecon Group, Inc.

Strategic Concepts in Marketing
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February 08 Beacon
Hi Def DVD War Goes Global
 
Tokyo - Two reports out of Japan from the Nikkei show that the high definition DVD war is clearly a global conflict of epic proportions. First is a report of sales of "next generation" DVD products with a decided Blu-Ray edge. A second report detailed a study of declining prices for both formats...but particularly heavy discounting on HD DVD products.
 
BLU-RAY SALES: Sales for the month of December of Blu-Ray Disc models accounted for 94.9% of sales of all next-generation DVD recorders in Japan, according to a report from market researcher BCN, Inc. Key marketers of the Blu-Ray technology in Japan include Sony Corp., Matshushita Electric Industrial Co., and Sharp Corp.
 
HD DVD, marketed in Japan under the Toshiba brand is, however, also selling well in certain segments. HD DVD is benefitting from an overall increase in demand for next generation DVD technology and is attracting a following with frugal shoppers as their products tend to be less expensive than Blu-Ray.
 
An employee at a Yodobashi Camera Co. store says that there is good demand for HD DVD with "people who give more weight to functionality than the variety of software available in the standard."
 
HD DVD PRICE CUTS: The Nikkei reports that HD DVD products are far more heavily discounted in the Japan market than Blu-Ray based models. In a survey of several key electronics retailers in Japan, Blu-Ray models were discounted a maximum of 17% in the fourth quarter as compared to their introduction prices. Higher end models were discounted less...with a discount of about 10%.
 
HD DVD however, was dramatically different. One Toshiba model, the RD-A301, saw its price drop 26% by year end. Other, older Toshiba models were said to have been discounted as much as 50% of their debut price.