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February 19, 2008

Toshiba Taps Out in HD Disc Battle

By Gary Kim, Contributing Editor

Toshiba (News - Alert) has given up its effort to win a commercial victory for its high-definition DVD standard. Toshiba has lagged far behind rival Sony Corp.’s Blu-ray devices in recent shipments of high-definition recorders, and Toshiba now says it will cease production of its rival devices by the end of March.



 
The decision has implications for satellite, cable, and telephone company video providers as well. Now that the way now is clear for consumers to step up their buying of high-definition players, demand for high definition displays will pick up a bit more steam. That, in turn, is going to increase demand for HDTV programming. That will help all network providers of HDTV programming to some extent, and marginally may help satellite providers, by some measures clear leaders in delivering HDTV programming, though cable operators and Verizon (News - Alert) are running to catch up.
 
But the end of the format wars also will stimulate related markets for discs and disc rentals as well, which now will pick up steam. And that is going to strengthen the position end by distributors of physical media-based on-demand programming, which essentially is what Netflix represents. Keep in mind that physical media always are an alternate way to satisfy some portion of the video on demand and pay per view markets.
 
All of those developments will increase demand for HDTV programming, while at the same time increasing the demand for alternative distribution channels, both network-based and disc rental.
 
Real-time online distribution of movie video will not benefit from the change, though. The amount of bandwidth required to support real-time HDTV movies lags so far behind access bandwidth that it will remain unattractive in the extreme. Downloading an HDTV movie takes about 3.4 hours over a 7 Mbps downstream connection. Over an Ethernet connection running at 10 Mbps the download still takes 2.4 hours. That is far too long to support any sort of real-time download service.
 
Blu-ray made up 81 percent of all high-definition disc sales in the week ending February 10, according to Nielsen VideoScan First Alert.
 
The decision from Toshiba ends a format war that most observers believe had depressed sales of high-definition DVD players, estimated to represent about $24 billion worth of sales.
 
Gary Kim (News - Alert) is a TMCnet Contributing Editor. To read more of Gary’s articles, please visit his columnist page.
 
For all the latest enterprise IP communications, unified communications, and contact center news, please click here.

(source: http://www.tmcnet.com/ce/articles/20992-toshiba-taps-out-hd-disc-battle.htm)

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