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 (Tuesday 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 at 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 format).

The rebate kicks off Sunday. 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, from 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.
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