Taps for HD DVD as Wal-Mart Backs Blu-ray
SAN FRANCISCO — HD DVD, the beloved format of Toshiba and three Hollywood studios, died Friday after a brief illness. The cause of death was determined to be the decision by Wal-Mart to stock only high-definition DVDs and players using the Blu-ray format.
Context & Ripple Effects
The format contest had already tilted against Toshiba: a January setback for HD DVD at Paramount and February reports that Toshiba was preparing to drop the format preceded Wal-Mart's decision. The retailer's exclusive stocking choice turns that competitive advantage into a distribution-channel verdict.
First-order effects
- Wal-Mart steers its high-definition disc and player customers to Blu-ray, while HD DVD loses access to a major retail shelf.
- Toshiba and the three Hollywood studios identified with HD DVD lose a viable competing format as the market settles on Blu-ray.
Second-order effects
- Blu-ray hardware makers and disc suppliers can concentrate production, marketing and retail support on one high-definition format rather than funding a two-standard market.
- Studios and retailers face less consumer confusion over compatible players and discs, shifting competition from format choice toward titles, pricing and availability.
Third-order effects
- The outcome shows how a large retailer's stocking policy can determine a consumer-electronics standards battle once content support and hardware availability have diverged.
- If this pattern holds, control of retail distribution becomes as consequential as technical specifications in future platform-format contests.
The trend: Consumer technology standards are consolidating around the formats that secure both content backing and decisive retail distribution.