HD DVD camp escalates format war

Pushes discounted Toshiba player, trailer campaign

Of the two competing high-definition disc formats, Blu-ray Disc might be getting the most traction -- and the most hype, with its Tuesday release of the first two "Pirates of the Caribbean" films.

But the rival HD DVD camp is hardly sitting idly by. The HD DVD Promotional Group this week announced a series of ambitious marketing and retail campaigns, from running trailers of upcoming HD DVD releases in movie theaters to offering rebates on hardware. Under the rebate plan, consumers can buy a Toshiba HD-DVD player for $299.

"The Toshiba rebate is timed perfectly to coincide with the (TuesdayMay 22 Warner Home Video) release of the 'Matrix' trilogy, one of the most anticipated releases on HD DVD to date," said Ken Graffeo, executive vp, high-definition strategic marketing, for Universal Studios Home Entertainment. "We believe consumers will see a $299 price for pristine HD content as a good reason to choose HD DVD."

The Toshiba player initially retailed for $499, so with the rebate the effective price drop has been 40% in just one year -- a dramatic decline so early in a format's life cycle. The announcement coincided with word that Panasonic is cutting its Blu-ray player price by more than half at the end of May, replacing its $1,299 BD 10 with a $599 BD 10A -- a price package that includes no fewer than five Blu-ray movies, including the highly anticipated "Pirates" releases.

Observers said the format war is driving down prices a lot faster than they would be dropping ordinarily, which in turn will hasten consumer adoption of high-definition packaged media.

"At the end of the day, it's a definite win for the consumer," Graffeo said.

The HD DVD trailer campaign will reach about 30 million viewers, the promotional group said. The trailer will run across a network of 932 Regal, AMC and Cinemark movie theaters nationwide, with exposure on 12,000 screens, in front of the summer's biggest blockbusters, including "Spider-Man 3" (which, ironically, is from Sony Pictures, which only supports the Blu-ray Disc format).

The rebate kicks off SundayMay 20. At first, consumers who buy the $399 Toshiba HD-A2 payer will receive an immediate $100 in-store rebate, as well as five free HD DVD movies from a selection of 15. During the final week of the rebate, between June 10-16, consumers can apply the $100 rebate to any Toshiba HD DVD player -- or buy their HD DVD player along with any Toshiba HDTV with a screen size of at least 42 inches and receive a $200 rebate.

"We know that price is a powerful driver for consumers to adopt new technology," said Jodi Sally, vp marketing at Toshiba America Consumer Products.
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