Why death of HD-DVD will not impact Blu-ray sales

Gartner's Paul O'Donovan

As we count the days (hours?) till the inevitable official announcement from Toshiba that it plans to ‘review its strategy’ (read: can the ailing HD DVD format be put out of its misery) yet another analyst wades in with comment.

Gartner’s principal research analyst Paul O’Donovan told TechRadar today: “Gartner anticipates Toshiba will finish with HD DVD within the next couple of weeks. Its share price has risen on the basis that the rumours are strong that it will pull out sooner rather than later. If it delays then the stock will drop very quickly.”

O’Donovan adds: “The recent price declines on Toshiba HD-DVD players were more to do with reducing stock levels of the players than trying to win market share or spoil sales of Blu-ray players. On that basis, Toshiba may well announce its withdrawal of HD DVD very soon.”

Accelerated Blu-ray sales?

So what will be the short-term outcome of the death of HD DVD? Many are presuming that there will be an immediate acceleration in Blu-ray movie sales. O’Donovan thinks otherwise, predicting a Blu-ray sales boost happening a little later this year:

“The sales of Blu-ray are linked to HD flat-panel TVs first and foremost. Certainly those consumers who have bought an HD TV may now consider buying a Blu-ray player but it will depend on various factors such as do they have enough money to buy now or will they wait and maybe they will consider a Sony PS3 instead of a Blu-ray DVD player? For sure, there will be a small rise but not an acceleration yet. That will come towards the end of the year.”

Downloads versus Blu-ray

It’s clearly time for Blu-ray to shine, with no competing format on the horizon. But what of movie downloads and services such as Microsoft’s Video Marketplace for Xbox 360.

“Gartner doesn’t see downloads having a massive effect on the adoption of Blu-ray. The infrastructure is ready for massive HD video-file downloads yet, just like books, people still like to have a hard copy to access and use whenever they want. It’ll be quite a few years yet before downloads have any real affect on optical disc sales for HD content.”

Adam Hartley