Sony Chief Executive Howard Stringer implied his company's Blu-ray DVD format could end up in the same place as its prior videotape format, BetaMax. When a CEO uses the word "stalemate" that's a bad sign. It generally means losing.
Consumers who recall the VHS vs. BetaMax wars are experiencing similar joy with competing DVD formats, Sony/Blockbuster's Blu-ray vs. Toshiba/Microsoft's HD DVD. I'm sure many people recall spending their hard earned money on a machine that only plays one format, having to junk it later if the consumer guessed on the wrong technology.
So what tipped the scales in favor of Toshiba's HD DVD format? It turns out the player costs half as much, $200 for Toshiba's vs. $400 for Sony's. But Howard blamed the recent switch of Paramount Pictures for the scale tipping toward his rival. Paramount left Sony's coalition of the willing, dropping Blu-Ray for HD exclusively. Ever the magnanimous loser, the Sony CEO said it was mostly a matter of prestige whose format wins out in the end.
"It doesn't mean as much as all that," Stringer said. He added that he believed there was an opportunity of uniting the two camps under one format before he became CEO, and he wishes he could travel back in time to make that happen.
I bet the customers who purchased your Blu-ray players, Mr. Stringer, want to make that same trip back in time and buy a HD player instead. To them it means $600, the $400 they wasted on losing technology and the $200 they must shell out to buy the winner. To a rich CEO $600 may not be all that, but to someone scraping by, it's significant. Will they have any income left to by your PlayStation for their kid?
The next time Sony or any other company gets in a format war with new technology, remind them of BetaMax and Blu-Ray and Howard's rueful stance. Decide on one format and then compete on quality, price and features. Grow the market as firms compete for share.
Competing formats postpone and impede market growth. One would expect Sony to know this by now.
Consumers who recall the VHS vs. BetaMax wars are experiencing similar joy with competing DVD formats, Sony/Blockbuster's Blu-ray vs. Toshiba/Microsoft's HD DVD. I'm sure many people recall spending their hard earned money on a machine that only plays one format, having to junk it later if the consumer guessed on the wrong technology.
So what tipped the scales in favor of Toshiba's HD DVD format? It turns out the player costs half as much, $200 for Toshiba's vs. $400 for Sony's. But Howard blamed the recent switch of Paramount Pictures for the scale tipping toward his rival. Paramount left Sony's coalition of the willing, dropping Blu-Ray for HD exclusively. Ever the magnanimous loser, the Sony CEO said it was mostly a matter of prestige whose format wins out in the end.
"It doesn't mean as much as all that," Stringer said. He added that he believed there was an opportunity of uniting the two camps under one format before he became CEO, and he wishes he could travel back in time to make that happen.
I bet the customers who purchased your Blu-ray players, Mr. Stringer, want to make that same trip back in time and buy a HD player instead. To them it means $600, the $400 they wasted on losing technology and the $200 they must shell out to buy the winner. To a rich CEO $600 may not be all that, but to someone scraping by, it's significant. Will they have any income left to by your PlayStation for their kid?
The next time Sony or any other company gets in a format war with new technology, remind them of BetaMax and Blu-Ray and Howard's rueful stance. Decide on one format and then compete on quality, price and features. Grow the market as firms compete for share.
Competing formats postpone and impede market growth. One would expect Sony to know this by now.
(January 2008 update: Sony gets Warner Brothers to commit to Blu-Ray, while Toshiba sells a boatload of HD DVD boxes through Walmart. It's the classic chicken vs. egg? Will studio's bend to boxtop purchasers and deliver the format they can use, or will consumers be stuck with another useless piece of technology, made obsolete long before its time? The best response to the Sony/Toshiba battle is to not buy, boxes or movies. The risk for those old enough to remember is an unusable BetaMax player with no movies to play. Let the companies play alone, since they can't cooperate to grow a market.)
