Re: Is Sony Ready To Pull The Plug On Blu-ray? NO
This is so silly Sony’s CEO, Howard Stringer's remarks were taken Completely out of context.
Sony is fighting for Blu-Ray 110%.
Here is what was really said:
Adler: Of course, one of the big fights right now is Blu-ray vs. HD-DVD for the high definition video market. I mean, the first and most obvious question is: Shouldn't there just be one format? Why should people have to choose between the two? And is there any possibility that we'll be heading there?
Stringer: I should point out that that is not part of the software battle. I mean, that's actually in some ways sort of anachronistic. We're fighting over a packaged goods hardware that will not go on forever, from a classic sense. We have a more expensive version, as Sony tends to, and Toshiba has a cheaper version, which seems to keep getting cheaper. I believe it has slowed down the progress of high definition packaged goods. Oddly, the studios kind of liked it for a while. They were able to leverage one of us against each other. But in the end, it's counterproductive. We have a sort of stalemate at the moment. As you know, they had fewer studios, but then they paid a lot of money for Paramount. So we have four studios and they have two or three studios. It's a difficult... it's a difficult fight. There was a chance to integrate it before I became CEO. This is something I inherited. And I don't know what broke down. I wish I could go back there, because I heard it was all about saving face and losing face, and all the rest of it. But it's not a battle about the digital future. That's what's so strange about it. If it doesn't work out, that doesn't say very much about where we're all going. It's just... it's a scorecard: one-nothing or something. But it doesn't mean as much as all that. PlayStation 3 will still go on playing games. It would have to have a different disk drive. And that's about it really.
Adler: So when a consumer now has to choose between the two, if they want to get into the high definition video, Wal-Mart was selling the Toshiba HD-DVD for $99 last Friday for a couple of days. Usually, it's been $199 there. I think your list price is $499 for Blu-ray. That's an enormously big difference, particularly in a slowing economy. Can you play that game with the difference being that great?
Stringer: Well... we've been selling them as fast as we're making them because the brand -- first of all, we're not the only ones selling them at that price. So is Panasonic, so is Samsung, so is Sharp. And one of the reasons it's more expensive is because it does more. The bandwidth is greater. If you just want a two-hour movie, the Toshiba version is a high definition picture. But we thought that to drive high definition into the customer's imagination, you should future-proof the disks so that you could have director's cuts, which are fairly obvious. We have six to seven hours of bandwidth available. You can have interactivity in three dimensions. We would be prepared to allow the package goods to survive much longer by making it much more innovative. But that does make the player more expensive. Now, they all come down. The race is to bring costs down. It always is in consumer electronics. So it isn't going to stay at $499.
Adler: But are you surprised by how little Toshiba can sell its unit for?
Stringer: No, because -- look, I can sell it for a dollar. I'd lose a lot of money, but if you want to go that route, it's a tough competition, and it seems to be about a lot of things, including face. So if you want to cut the price down and engage us in a price war, that's a different system. We were trying to win on the merits, which we were doing for a while until Paramount changed sides.
Adler: Microsoft seems to have an interesting role in this. They're selling add-on HD-DVD drives for the -- they're taking HD-DVD to the Xbox, and Xbox competes strongly with you. Is Microsoft kind of working in cahoots or in alliance with Toshiba on HD-DVD? Is that a competitive challenge to you?
Stringer: Only the spirits know. [laughs] Yeah... you never know with Microsoft do you? You never know. Xbox versus PS3 is sort of a subplot. What Microsoft's role is in that? I don't know. We're still selling software at a faster level than Toshiba. Obviously, we care about the software side more than the Toshiba does. It doesn't have a studio. It doesn't own a studio. So it's in our interest to -- actually the most significant thing in some ways about Blu-ray, going back to Microsoft... the Blu-ray Disc has a very high security level, which Fox in particular, but also other studios, was most excited about -- wanted to have some protection from instant ripping. So the specs that went into the Blu-ray, which were done in conjunction with many studios, had this security level. That is probably not in Microsoft's interests. The Toshiba disk is certainly far easier to rip. Whether you like that or don't like that depends on your consumer enthusiasm.
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