By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Toshiba came back from International CES with the gloves off, stepping up its marketing campaign in the light of what it called "record-breaking unit sales in the fourth quarter of 2007."
Although Warner Bros. announced on the eve of the show that it had decided to ditch HD DVD and back Blu-ray Disc exclusively beginning in May, Toshiba vowed to continue the fight with its remaining studios, Universal, Paramount and DreamWorks SKG.
A report in TWICE sister publication Daily Variety said that Universal's contract with Toshiba to exclusively back HD DVD has expired, and Paramount has an escape clause in its HD DVD contract allowing it to release titles on Blu-ray after Warner's decision to back that format exclusively.
But neither studio had announced any such defection at press time. In fact, Universal's Ken Graffeo issued a statement saying: "Universal's current plan is to continue to support the HD DVD format."
Toshiba then announced it will run major initiatives, including joint advertising campaigns with studios and extended pricing strategies set to begin in mid-January.
The efforts are "designed to spotlight the superior benefits of HD DVD as well as the benefits HD DVD brings to a consumer's current DVD library by up-converting standard DVDs via the HDMI output to near high-definition picture quality," according to a statement.
During CES, Jodi Sally, Toshiba digital A/V group marketing VP, said: "You can't deny that Toshiba has delivered on its promises again and again, so it is difficult for me to read all of the comments declaring that HD DVD is dead. Clearly the events of the past few days have led many of you to that conclusion. But we've been declared dead before."
Sally added, "The reality is we entered 2007 with a majority lead in year-to-date market share. Our unit sales for the fourth quarter were the best to date for HD DVD and now nearly 1 million dedicated HD DVD players from all brands are in the market in North America."
Toshiba said sales of HD DVD "achieved the No. 1 sales volume in the next-generation DVD category with an approximately 50 percent market share in 2007," and "HD DVD is proven to be the format of choice for consumers."
Toshiba said the format also accounts for "an 80-percent-plus market share of all next-generation DVD-equipped notebooks for the fourth quarter 2007."
In a somewhat new approach, Toshiba is also now touting the ability of its HD DVD players to up-convert standard DVDs to near-HD quality while extolling the virtues of the older format, on which HD DVD is based.
Last week, members of the Blu-ray Disc Association revealed at CES that they were shifting their marketing focus from Blu-ray vs. HD DVD to Blu-ray vs. DVD, following Warner Bros. announcement to back Blu-ray Disc as its exclusive HD disc format.
"With DVD up-conversion via the HDMI output, HD DVD players instantly make a movie lover's existing DVD library look better than ever," Toshiba said.
"HD DVD is the best way to watch movies in high definition," stated Sally. "Our HD DVD players not only play back approximately 800 HD DVD titles available worldwide and deliver an entirely new level of entertainment, but also enhance the picture quality to near high definition on legacy DVD titles by all studios. In short, we added high def to DVD which already is the de facto standard format created and approved by the DVD Forum that consists of more than two hundred companies."
Under Toshiba's "new marketing strategy for mass market adoption," the company announced reduced suggested retail prices on HD DVD players. Effective Jan. 13, the entry HD-A3 model (originally $299) carries a $149 suggested retail, the HD-A30 (originally $399), with 1080p output, carries a $199 suggested retail, and the high-end HD-A35 (originally $499), carries a $299 suggested retail.
The prices were set after "taking the holiday season sales based on promotional prices into full consideration," Toshiba said.
"While price is one of the consideration elements for the early adopter, it is a deal-breaker for the mainstream consumer," said Yoshi Uchiyama, Toshiba digital A/V group VP. "Consumer sales this holiday season have proven that the consumer awareness of the HD DVD format has been elevated and pricing is the most critical determinant in consumer's purchase decision of the next generation HD DVD technology. The value HD DVD provides to the consumer simply cannot be ignored."
In addition, the company is extending its advertising campaign to promote greater consumer awareness and "drive sales to retail among potential consumers."
Advertising strategies will include television, print and online media channels. Toshiba will also work with its dealers and studio partners on joint marketing and promotional initiatives to promote HD DVD, the company said.
Current promotions include "The Perfect HD Offer" — a mail-in offer allowing consumers to select five HD DVD titles for free from a selection of 15 with the purchase of any Toshiba HD DVD player.
Toshiba will also look to build discontent among early Blu-ray adopters, who will be shut out of new Web-enabled extras coming to next-generation players, by reminding that every HD DVD player has been required to carry an Ethernet port for Web-enabled network capabilities from the beginning.
"Toshiba delivers on the promise of a consistent entertainment experience through firmware updates as studios launch new applications. HD DVD allows studios to flex their creative muscle in ways never before seen," the company said. "The latest of these new experiences is online streaming. Now when consumers connect their HD DVD player to the Internet, they can stream new content or trailers, as available, directly from a movie studio's server."
Universal Home Video, Paramount Pictures and DreamWorks Animation SKG have reported that an average of 30 percent of HD DVD owners have accessed Web-enabled network features and continue to do so regularly, according to Toshiba.
In order to ensure that its customers will receive complete satisfaction from their new players, Toshiba introduced the HD DVD Concierge program earlier this month. Consumers can call (888) MY HDDVD (888-694-3383) for answers to general questions about HD DVD, for operational assistance or for assistance with various promotions.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.