Toshiba facing defeat on HD DVD

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Reports are emerging that Toshiba is preparing to finally pull the plug on its struggling HD DVD optical format, potentially as soon as next month.

According to the US based Home Media Magazine an unnamed source close to the HD DVD camp has revealed that, "an announcement is coming soon," and that it would be made in "a matter of weeks."

As a response to this, Toshiba vice president of marketing Jodi Sally stated: "Based on its technological advancements, we continue to believe HD DVD is the best format for consumers, given the value and consistent quality inherent in our player offerings."

Tellingly though, she also went on to say that, "Given the market developments in the past month, Toshiba will continue to study the market impact and the value proposition for consumers, particularly in light of our recent price reductions on all HD DVD players."

The writing has been on the wall for Toshiba's HD DVD ever since Warner's announcement at CES that it was dropping the format in favour of Sony's Blu-ray, causing Toshiba to cancel its CES press conference at the last minute. Toshiba's Sally said later at the show: "We firmly believe HD-DVD is the best format for the consumer", and that "We have been declared dead before."

However, the following week figures from the NPD group in the US emerged showing that sales of HD optical discs were 93 per cent in Blu-ray's favour, a trend that continued in the following weeks.

This was despite the major price-cutting of Toshiba HD DVD players following CES. Rather than being seen as a boost for the format however, it was considered by most industry watchers as a firesale.

In just the past week, two major US retailers, Best Buy and Netflix, went Blu-ray exclusive, citing widespread studio support and consumer preference.

At the end of January, Hiroyuki Shimizu, principal research analyst for Gartner in Japan, said in a research note: "Gartner believes that Toshiba's price-cutting may prolong HD DVD's life a little, but the limited line-up of film titles will inflict fatal damage on the format," and referred to Toshiba's price cuts as "useless resistance."

In the light of all this, the rumoured $2.7 million (£1.35 million) cost of a 30-second advert for HD DVD during the Super Bowl half-time show doesn't appear to have been money well spent.

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