Out of the Box

I agree with almost all the points that Rick Clancy makes as he places his bet that Blu-ray discs will be around for far greater than five years. That said, I actually think few in the industry would disagree with that. The question I’ve been asked more often is how long will Blu-ray grow, especially compared to the decade or so of growth that DVD saw, and how deep will its penetration reach, at least in the U.S..

Compared to the near monopoly that DVD had as a format for selling movies, Blu-ray will face more competition, including stronger legacy competition in the DVD. However, barring any breakthroughs such as DECE changing the nature of downloads, Blu-ray will continue to offer a superior convenience factor for movie buying.. (As for rentals, digital distribution may make inroads there more quickly.) Therefore, I think that Blu-ray will grow for more than the next five years, and see it starting to peter out in about seven or eight years.

Could Toshiba become the most progressive consumer electronics company when it comes to digital distribution?

As I and others have noted, HD DVD was never the primary factor in slowing the adoption of Blu-ray. According to NPD’s research, satisfaction with existing DVD players was the most cited reason among those who had no plans to purchase a high-definition disc player when we surveyed consumers last year. Therefore, the end of HD DVD has not meant a free pass for Blu-ray.

In an interview with the WSJ, Toshiba’s Atsutoshi Nishida points out the value of a diversified corporate portfolio, noting that HD DVD was but one of 45 strategic product groups within the electronics conglomerate. He also divulges plans to stay or become relevant in the twin forces squeezing Blu-ray from the past (upconverting DVDs) and the future (digital downloads) to continue to compete indirectly with Blu-ray. Nishida points to wired technologies that are becoming wireless (a reference to HDMI?).

Of course, Toshiba’s PC strength to which Nishida refers is in notebooks, and most of the connectivity scenarios he discusses have been focused on stationery PCs (although that is changing). In any case, it seems clear that Toshiba will have more occasion to work closely with its HD DVD promotion partner Microsoft. The conspiracy theorists may have been wrong, but the format war has brought at least one major electronics company to look beyond the disc.