HD-DVD Outselling Blu-Ray? Dead Format Flies Off Discount Shelves

By Richard Menta 3/23/08

NPD recently predicted that Blu-Ray unit sales will make gains by the end of this year and that is a very reasonable statement considering that Blu-ray won the high definition DVD wars. Of course, NPD also found that most people are happy enough with their standard DVD and are in no hurry to switch to an HD format. Maybe, Sony should not have celebrated its victory by raising Blu-ray prices. That's one reason. Here is another.

A March 21st news story we picked up from TG Daily is quite interesting. Among the percentage of consumers who are investing in high definition today many are choosing the dead format. Demand is so strong for HD-DVD, thanks to steep price drops, that supplies on remaining HD-DVD player stocks and HD-DVD discs are drying up very quickly. They may be within a week of a selling out and demand for some HD-DVD units are so strong prices are jumping back up again. From the article:

If you are interested in purchasing the flagship model HD-A35, you will have to scour the market and you are likely to see a steep price: One month ago, the HD-A35 was sold by 267 retailers. Now there are only eight retailers offering the player, according to Pricegrabber.com, while only six have the device actually in stock. The average retail price is currently $466.62, with a low of $239.95 and a high of $499.

Of course, these numbers have to be taken with a grain of salt. But if Pricegrabber.com in fact reflects true market conditions and you are still interested in buying one of those HD DVD players, you may want to start looking rather sooner than later.

In our March 7th article "HD-DVD Players, Films Dumped on eBay - Buyers Flock" the price for the then ample number of Toshiba HD-A35 units was hovering at the $150 mark. Still, the difference between the cheapest Blu-ray player ($400) and cheapest HD-DVD player (the HD-A3 is running $59.99 at several retail stores) is significant. The post-mortem HD-DVD buyer can buy a lot of HD-DVD discs for that difference, particularly with HD-DVD discs selling for a third the cost of Blu-ray titles.

Frankly, the math definitely favors buying HD-DVD today only to chuck it for Blu-ray two years down the road. By then Blu-ray players will all be Profile 2.0 and selling for under $100. Right now all those pricey Blu-ray players are Profile 1.1 and are not upgradeable. That mean they won't be able to access all the features on future Blu-ray titles. Yep, the Blu-ray player you buy today itself will be somewhat obsolete in several months.

Toshiba probably had over 100,000 finished players in the retail pipeline before they stopped production. Discarded formats tend to linger on shelves for ages like a bad cold, but HD-DVD units are selling out extremely quickly. Even if most buyers are simply picking one up as a cheap up-converter for their standard DVDs, that's 100,000 people who are not buying Blu-ray for the time being. Even though it is probably inevitable that they will go Blu-ray at some point and even though the remaining HD-DVD players will be gone very soon this is a problem for Sony. That's because those 100,000 people are lost to Blu-ray for the short term and the long term could bring another technology that will appeal to customers more.

Other MP3 stories:
2007 Digital Media Winners
2007 Digital Media Losers

The Archos 605 Wi-Fi portable DVR is available on Amazon

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