Official HD DVD obituary a matter of days, not weeks
By Ken Fisher | Published: February 17, 2008 - 12:29PM CT
http://arstechnica.com/news.ars/pos...-dvd-obituary-a-matter-of-days-not-weeks.html
On Friday, rumor spread fast that Toshiba was about to bail on HD DVD, following a string of unhappy news for the HD DVD camp, beginning with Netflix and Best Buy's decisions to throw their weight behind Blu-ray earlier in the week. While a Toshiba marketing exec denied on Friday any definite plans to bail on HD DVD, in the past two days sources have come out of the woodwork to tell Ars Technica and many other publications that the HD DVD machine is grinding quickly to a halt. Yesterday, Reuters reported that a source said that "Toshiba was in the final stages of planning to exit the HD DVD business."
We've reached out to a few sources to find out what's going on. Here's what we know, starting with the most recent information gleaned from a source close to the HD DVD camp. Surprisingly, our source tells us that exit plans for HD DVD were already in the works before the Netflix announcement this past week. The loss of Warner Brothers demoralized the HD DVD camp, and when it was clear that deep price cuts weren't going to give HD DVD a second wind, the writing was on the wall. The only question, pre-Netflix announcement, was how to gracefully shutdown while liquidating existing product. Now that retailers and rental joints have turned their back publicly on the format, there's nothing graceful about the shutdown plans. There's little face to save on the consumer side.
What's more, our source says that Netflix and Wal-Mart were aware of HD DVD's impending official death, and rather than allow a long and drawn out withdrawal from the market that could burn customers, those companies chose to broadcast their intentions to the marketplace immediately. This puts pressure on Toshiba and its partners to exit the business without spending months trying to unload product that's essentially already obsolete.
At this stage, the hold-up on an official announcement, according to our source, is the need for a definitive shutdown plan that can be announced at the same time Toshiba officially gives up HD DVD. Toshiba and its partners are concerned to show that they have plans that can minimize the financial damage resulting from the shutdown, presumably to keep shareholders happy. But the damaging announcements from Best Buy, Netflix and Wal-Mart have forced an acceleration of the company's plans. An announcement could come as early as Tuesday, and will be most certainly made by the end of the week, our source indicated. At the top of Toshiba's list is how to maintain investor confidence in the face of factory shutdowns that will cost the company and some partners dearly.