On the "Next Generation DVD" Wars
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I haven't been following the escalating conflict between the two potential "next generation" DVD formats — Toshiba's HD-DVD and Sony's Blu-Ray — too closely.
Which is unfortunate, for several reasons:
1. It's shaping up to be a repeat of the Great VHS-Beta War of a generation ago.
2. I now seem to have an unwitting stake in the outcome, since Microsoft's Xbox 360 is HD-DVD compatible only.
3. The saga is a fascinating case study in market power.
Consider the players:
One wonders whether the DVD Wars will become a prisoners' dilemma, with all these companies spending (wasting?) vast sums to try to ensure that their format wins (or dominates), only to find that they all lose out in the end, rather than finding some way for both formats to coexist.
What one does not wonder is whether this raw capitalist creative destruction (destructive creation?) is better than having government bureaucrats, either domestically or — gasp! — globally, determine which format to adopt. Private companies, all up and down the distributive chain, trying to woo private consumers. The outcome should of course be privately decided (i.e., market-driven).
Based solely on history, if I had to bet, then I would probably bet against Sony. Other than the Walkman and the PSP, every new technology they unveil flops. On the other hand, Michael Dell is right far more often than he's wrong. I also wonder whether Netflix will have any say in the matter (i.e., would they care one way or the other?).
Meanwhile, here's a related report from the Consumer Electronics Show in Las Vegas. Apparently there's a fine line between being first out of the gate and stumbling out of the gate. Go figure.
So, open thread — who will win the DVD Wars? Or will some kind of market-sharing truce be declared?
Which is unfortunate, for several reasons:
1. It's shaping up to be a repeat of the Great VHS-Beta War of a generation ago.
2. I now seem to have an unwitting stake in the outcome, since Microsoft's Xbox 360 is HD-DVD compatible only.
3. The saga is a fascinating case study in market power.
Consider the players:
The HD DVD format is supported by Universal Studios, Warner Bros. and Intel Corp., as well as Microsoft Corp., which hopes its new Xbox 360 video game console will challenge Sony's PlayStation.That's an awful lot of advertising budget, and lobbying capacity, and shareholder value, on either side of the contest.
Blu-ray is backed by Apple Computer Inc., Hewlett-Packard Co. and Dell Inc., along with a variety of other tech companies and studios.
One wonders whether the DVD Wars will become a prisoners' dilemma, with all these companies spending (wasting?) vast sums to try to ensure that their format wins (or dominates), only to find that they all lose out in the end, rather than finding some way for both formats to coexist.
What one does not wonder is whether this raw capitalist creative destruction (destructive creation?) is better than having government bureaucrats, either domestically or — gasp! — globally, determine which format to adopt. Private companies, all up and down the distributive chain, trying to woo private consumers. The outcome should of course be privately decided (i.e., market-driven).
Based solely on history, if I had to bet, then I would probably bet against Sony. Other than the Walkman and the PSP, every new technology they unveil flops. On the other hand, Michael Dell is right far more often than he's wrong. I also wonder whether Netflix will have any say in the matter (i.e., would they care one way or the other?).
Meanwhile, here's a related report from the Consumer Electronics Show in Las Vegas. Apparently there's a fine line between being first out of the gate and stumbling out of the gate. Go figure.
So, open thread — who will win the DVD Wars? Or will some kind of market-sharing truce be declared?
Related Posts (on one page):
- On the "Next Generation DVD" Wars
- DVD Clash of the Titans
- Blockbusted
Posted by Kip on
7 January 2006
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