Toshiba to drop HD DVD?

A reliable source in Hollywood says Toshiba may pull the plug on its HD DVD format very soon. Since many retailers and studios have switched to Blu-ray, sources says it's more difficult for HD DVD to stay on the market.

One by one, producers as well as retailers are switching to the Blu-ray format and as a result, it's getting more difficult for Toshiba to keep its HD DVD format on the market without new videos to offer for its customers. According to the Hollywood Reporter, Toshiba will likely stop producing HD DVD players very soon. Toshiba has not officially announced it will stop, but gave some hints through Jodi Sally, Vice President of Marketing for Toshiba America Consumer Products. According to the Hollywood Reporter, Sally said:

"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."

After Warner Bros. announced it will release movies on the Blu-ray format exclusively, Toshiba has suffered a big drop in sales. After the announcement, Toshiba immediately cut prices by half to generate more HD DVD player sales, but was unable to garner the market share it hoped for. According to some reports, its market share fell to 28 per cent while Blu-ray occupies a 65 per cent market share. This decline also related to poor HD DVD movies sales. According to Nielsen VideoScan First Alert sales data, Blu-ray Disc titles accounted for 81 per cent of sales to HD-DVD’s 19 per cent. As the Hollywood Reporter says:

Toshiba had been pitching its discounted HD DVD players toward the standard DVD crowd as well as high-def enthusiasts, noting in its ad message that the new players would make DVDs look a lot better as well. And as a last-ditch effort, the company ran an ad during the Super Bowl -- a 30-second spot that reportedly cost $2.7 million.

But nothing helped and Toshiba was incurring huge losses by cutting the price on HD DVD players. That, and the massive defections to Blu-ray also cut a big margin out of its bottom line. So, it's increasingly becoming more obvious Toshiba has no other choice but to stop producing HD DVD players.