As with scads of other mega-corps attempting to keep their chins up while the global economy decides what it wants to do, Toshiba has announced that it is now forecasting a $468 million net loss in the first half of 2008. Interestingly, it's being reported that the firm is looking to its
LCD HDTVs for growth as its chip business struggles, with plans to grab over 10% of the worldwide LCD TV market by 2011. For whatever reason, the outfit is
still refusing to play ball with the lone remaining high-definition movie format, with Corporate Senior Vice President Yoshihide Fujii proclaiming that it has "no intention of adopting Blu-ray for [its] DVD players and recorders." Quite honestly, Tosh's refusal to go Blu is beyond the point of comic relief -- now, it's just downright perplexing.
Read - Toshiba dips into the red
Read - Toshiba counts on LCD TV growth
Read - Toshiba again refuses to go Blu
posted Sep 19th 2008 9:29AM
Why is it perplexing? Show me the bottom line from any CE that's making good money off of BD players.
Why is it perplexing?
Has any CE actually made money on their BD players yet? Any proof of it?
I don't think adding another player in the overpriced market would really help anyone.
Bottom line is that BD players are slow sellers and require refreshing before most CEs can make their money back.
So why would a struggling company throw millions or more in this ring?
Maybe Toshiba can't afford to go Blu. Sony, aka BDA, has said, as recently as this week, that Blu-ray will remain high priced for a long time. So, why should Toshiba jump in and put money into a stale market/format? I've been a supporter of Blu-ray because of its higher storage capacity. But, I really don't see a need for Toshiba to go Blu. Again, Sony will keep the licensing price high just so it can push more $400 PS3s.
Maybe iNfinity and Falseteller run Toshiba?
Sony ≠ BDA. Get it straight!
It's not surprising at this point. It doesn't make sense until DVD sales slow down.
That Toshiba is upset that they didn't win the war is understandable. Lots of people do stupid things because they feel slighted. They didn't get it then, they don't get it now. If they don't get it in the future, they'll be left behind like buggy whip manufacturers and SUV manufacturers.
Their own BR movie studio, royalties from all BR sales, a monopolistic stranglehold-95% of all BR players sold, Lol, .................sony DOES=BDA get it right.
How could you say anything else!
bah, toshiba should offer a basic Blu-Ray player at least.
at this point it is stubborn. at least Sony offered VHS players when Beta lost.
pretty silly
VHS was always going to be a massive and totally dominant force, most unlikely blu ray will ever reach what VHS acheived.
This is only perplexing to members and fans of the BDA. In case you haven't realized it, blu ray players are NOT flying off the shelves. Just give it a break already. I understand that your parent company killed HD DVD, but please try to remain unbiased.
Michelljd: there really is no reason to offer one now. Perhaps later, but at this time I do not beleive that it will help their bottom line any nor is there really a need for them to make one. Until their sales continually outpace those of regular DVD there isn't much incentive to bring out their own blu ray player.
If Toshiba thought Blu-Ray would be profitable, they'd jump in. Obviously that's not what they're seeing. One year to fast track development, release a BD player that probably won't be all that different than any other player on the market and maybe brake even on it? Good business plan...not.
Glad to see the red camp is still out there and still sore.
Here's the perplexing part: Toshiba clearly used to believe that disc-based HD media was the next big thing. So....now they don't? Why the change? When Sony lost the VHS/Beta war, did they not eventually start making VHS decks? Toshiba is a big company, yet they're running it like a bunch of kids who want to take their ball and go home because they lost. With prices where they're at I feel fairly certain that BD players are not a negative profit margin item, so does Toshiba just not want to make money?
> Toshiba clearly used to believe that disc-based HD media was the next big thing. So....now they don't?
They didn't. HD DVD was designed as a stepping stone from DVD to online based systems. That's why it has things like CPRM built into the spec, and why such a premium was placed on online features, even making Ethernet connectivity mandatory.
> When Sony lost the VHS/Beta war, did they not eventually start making VHS decks?
Beta continued being sold until it was no longer profitable. At the time Sony started making VHS decks, it was awash in money.
Toshiba has no good reason to be building Blu-ray players. There's no business case for it. There might be in two or three years, in the event BD actually takes off, but right now it involves spending large sums of money on a niche product that, unlike HD DVD, wasn't built to go in the direction Toshiba believes is the future - online content. Toshiba has to turn around their financials, not invest in a technology they believe has no future, that involves entering a crowded market to sell low margin, high cost, boxes to consumers who expect prices a quarter of what they are at present.
The term "blutard" may seem unnecessarily derogatory, but the case against Toshiba entering the Blu-ray market is just so blatantly obvious that I can't think of a better term to use against those who constantly, consistantly, whine and complain that a company having severe financial problems isn't making equipment to play their favored format, equipment that none of them would buy anyway.
Brian:
Toshiba is not a person, is a business. I cannot put it in any better words than squiggleslash did. So please go ahead and scroll up and read his reply, or read it again if you already did but this time put some of your reading comprehension skills to work.
Eitherway here's the short version: It isn't that Toshiba is angry at Sony or that they no longer believe disc-based HD media isn't the next big thing. It just comes down to making money on any business rather than losing. They already invested a lot on HD-DVD and lost a lot on it as well, so guess what? Perhaps is not convenient/healthy for the company to put its savings and investors on the line just to throw cash into an uncertain format yet.
Trust anybody that if Blu-ray was the all-mighty-for-sure profitable format Toshiba would have to swallow their pride and invest on it. Toshiba isn't run by just one guy, it has it's board of directors as well as a bunch of investors that want to make money, and if investing in bluray is the way to make it they'd force any and all executives to go that way or they wont invest on the company.
IF INVESTING IN BLU-RAY SEEMED LIKE A PROFITABLE DECISION FOR ANYBODY, THEN THE INVESTORS OR SOMEONE IN THE BOARD OF DIRECTORS FOR TOSHIBA WOULD PLAY BALL.
Maybe by capitalizing you can read and comprehend at once. I didnt say anything newer or better than what anyone here said, so go read them and then comeback to read mine in all caps to comprehend.
To those who say there is no money in blu-ray players, why then have almost every other manufacturer released or are releasing players, even Memorex and JVC? Do you really believe they are releasing these players knowing they will lose money? Wake up!
That's easy... they've put money into the development of these systems, and they are just trying to break even now, but to do so you have to keep updating the system to keep up with the two companies that can do it the cheapest, SONY and PHILIPS.
"Also, I keep reading posts about the fact that Sony says blu-ray will not be cheaper anytime soon. So the Toshiba bandits are quoting that constantly. Funny thing is, players scheduled for release are cheaper than before, so what sense are you making?"
They're still way overpriced for consumers. Not everyone can justify the high prices of the players and media. You can give it all the positive spin you want, but BDA said that prices will not be coming down for some time. Until the players go under $199 and the media goes under $20, I don't see much traction gained. Yes, I'm aware of all the usual places to find great deals, slickdeals and fatwallet. But, the majority of consumers don't, and they're the ones that make or break a products success. Also, Blu-ray is very dependent on HDTV sales and convincing viewers that upgrading their players is the answer.
Here's my general position: Blu-ray is the Vista of the HD media. Although Blu-ray offers lots of features, just like Vista, most people are happy with DVD, just like pc users with XP.
So, now I've been called a "Blu-tard" and been written to in all-caps. You red supporters just don't get it, and obviously I struck a nerve. I don't know what it is about my posting that makes you think I'm an uneducated hack, but let me assure you that I'm not. The bottom line is this...Toshiba produced HD DVD devices on the premise that people were going to buy HD DVD media, to watch content in high definition! They believed in the premise when they started selling the players, so tell me why they do not believe in it now? The idea that they believed it was just a "stepping stone" to online content does not fly with me...there would have been much better ways to accomplish that and they wouldn't have required a disc at all. The online capabilities that were mandated for HD DVD were required for the same reason that Profile 2.0 exists on Blu. To sell extra online content along with the disc! And even if they did believe that, what would stop them from making Profile 2.0 players that have very similar capabilities.
Since we all understand that Toshiba is a company that is in the business to make money, answer this: why aren't they in the same business that Sony, Samsung, all of the major studios and many other companies are in? I guess all of those companies are NOT around to make money.
And do me a favor, stop talking down in your posts so much. It makes you look jealous and silly, much like Toshiba.
Brian, you got it 100% right. To think that all these manufacturers are releasing blu-ray players are doing it and losing money is absolutely ridiculous. Anyway, who cares what Toshiba does. This holiday when players are selling, it's Toshiba that won't be selling any. It's strictly a case of "I got hurt and I ain't doing it your way."
> The bottom line is this...Toshiba produced HD DVD devices on the premise that people were going to buy HD DVD media, to watch content in high definition!
They produced HD DVD devices on the premise that HD DVD would be a good stepping stone towards an online format. Yes, people want to watch HD content, and initially they're going to want that on high capacity disks. But in the longer term, the actual disk media system doesn't have much of a future. Toshiba backed the DVD Forum standard that actually worked in terms of having a road map.
> The idea that they believed it was just a "stepping stone" to online content does not fly with me...there would have been much better ways to accomplish that and they wouldn't have required a disc at all.
Right, because we're all ready right now for 100% online services. Well, we're not. A disk was always going to have to be part of the stepping stone, otherwise it's not a stepping stone.
> The online capabilities that were mandated for HD DVD were required for the same reason that Profile 2.0 exists on Blu.
Nope. Profile 2.0 is about having online extras anchored around a physical disk. You wouldn't use Profile 2.0 to download a movie and burn it to a disk. You wouldn't use Profile 2.0 to manage a copy of a movie on a central storage device.
This is central to the difference between HD DVD and Blu-ray. Some people think it was about 15Gb vs 25Gb layers (why?), or HDi vs Java (sort-of, but not in the "Microsoft hates Java" way that most Blutards insisted upon), or Microsoft trying to screw everything up with a pointless war while it waited for downloads (why would it need the war? Online is going to take off as soon as the devices are available, it doesn't need two next-generation formats fighting one another for that. Michael Bay, you're a tool.)
The real difference is that Blu-ray was designed as a high definition version of DVD, and HD DVD was designed as a next generation version of DVD. Blu-ray was so backward that in its original iteration it was little more than DVD with 1080p video. HD DVD included, from the start:
- Mandatory Managed Copy
- CPRM (burn disks with DRM'd content)
- Seamless integration of online and locally stored resources
- Low bitrate codecs from the start
- Mandatory Internet access, from the start
Part of the requirements document also mandated support for online rentals and purchases of content, though to the best of my knowledge, this was never implemented in the spec.
Some of those technologies have wormed their way into Blu-ray, but generally without regard to why. MMC is not there, which is why half a dozen non-standard "digital copy" systems have sprung up. CPRM - not there. Integration of online/locally stored - kinda sorta, but not exactly as simply as HD DVD did it. Low bit rate codecs - grudgingly yes. Mandatory Internet access - nope, Profile 2.0 isn't in the majority of players and looks set to be considered an optional feature for the next year or two, if it ever becomes mandatory at all. You're certainly going to have difficulty building an online ecosystem around Blu-ray with the system as offered.
Now, this is why Toshiba backed HD DVD, and why it's not looking at Blu-ray. It doesn't see a future for a format that isn't going to be part of an online future. It's that simple. Saying "Aha! But HD DVD could be used, and was used in its initial iterations, to allow people to buy disks with high definition content on it" is simplistic in the extreme.
Toshiba had a business case for HD DVD. Toshiba has no business case for Blu-ray. With Blu-ray, you're looking at a technology that looks set to be superceded by online services within the next 3-5 years. With HD DVD, you were looking at a technology that would have been central to online services within 2-3 years. In the mean time, it has money problems, so asking it to invest in a technology it sees as having no future is beyond ridiculous.
"So, now I've been called a "Blu-tard" and been written to in all-caps. You red supporters just don't get it, and obviously I struck a nerve. I don't know what it is about my posting that makes you think I'm an uneducated hack, but let me assure you that I'm not. The bottom line is this...Toshiba produced HD DVD devices on the premise that people were going to buy HD DVD media, to watch content in high definition! They believed in the premise when they started selling the players, so tell me why they do not believe in it now?"
Toshiba didn't care about hardware sales - they wanted SOFTWARE sales because they had a stake in the HD DVD patents/licensing, just like Sony does with BD. What do they gain by making a BD player? $30/player, maybe? And how much money will it cost to design and implement? Lots.
Juts not worth it for them - they get money from DVD sales and they got money from HD DVD sales. They don't get money from BD sales, so why make a player?
I love how everyone just KNOWS that their opinion is the right one. If anyone absolutely knew the future and how the market would turn out, well they would never lose any money and would be pretty damn profitable. On the one hand, Blu-ray may fail or at least never take off like DVD and if Toshiba is hedging it's bets on on-line media then they're ahead of the game. If Blu-ray takes off and they never invest then they missed a big chunk of the pie, and then everyone will say "I told you so," and talk about how they knew Toshiba was being stupid. Toshiba is clearly choosing to invest in the possibility that Blu-ray doesn't take off. People on both sides of the issue are right. They are either being extremely stupid or extremely smart. Time will tell. From a business standpoint it is a greater risk to not get anything out there at all for Blu-ray than it is to save all your assets for something that more or may not come to pass in the near future. Simply having a presence in the market would probably be a much safer bet, but no one "knows" what's going to happen at this point.
> From a business standpoint it is a greater risk to not get anything out there at all for Blu-ray than it is to save all your assets for something that more or may not come to pass in the near future. Simply having a presence in the market would probably be a much safer bet, but no one "knows" what's going to happen at this point.
Completely the opposite situation.
Toshiba entering the market NOW doesn't do anything to ensure their success in two years.
If Toshiba suddenly turns around and says "Wait, Blu-ray's taking off!" and builds a Blu-ray player in 2010, then, well, people will buy them. Nobody is going to refuse to buy a Blu-ray player from Toshiba because they didn't make one in 2008.
What they're doing is letting others take the hit. If Blu-ray becomes a success, they've lost nothing by waiting this one out. If they simply make players to "keep their hand in" right now, then they'll be spending a small fortune on designing the things, building factories (or paying others to build them), and marketing devices that will be sold into a crowded market full of people expecting to pay $100 for that type of device. When you're $1B in the hole after HD DVD and making losses of $900M (assuming the second half is as bad as the first), you certainly don't want to be doing that.
I just want to comment on the whole Sony thing about prices not coming down anytime soon. This is basic talk from any CE company. If you tell people that prices will fall dramatically soon, then they will just wait for that dramatic price drop. This is double important for Sony because they want people to think thePS3 will be the best bang for the buck blu-ray player for a long time.
Prices are already coming down, and there will inevitably be some Black Friday blu-ray player sales this holiday season. The PS3 will probably need to have a $50 price drop this holiday season as well if they want to compete with MS.
It is OBVIOUSLY in Toshiba's interest to get into the format. And sooner or later they'll have to. Given the inevitability, one wonders why they are still sulking or pretending DVD is teh future. There was enough time between HD DVD sinking and this holiday season to at least produce a rebadged Samsung player. Toshiba are much better positioned than many smaller companies since HD DVD and Blu Ray had so many similarities.
Blu Ray also sell HDTVs and and HDTVs sell Blu Ray players. They are complementary devices and the sale of one often leads to the sale of the other. While Sony, Samsung, Panasonic, Sharp, Philips etc do deals on home theatre bundles this season Toshiba will be left out in the lurch. They'll be trying to palm off upscaling players when even the stores themselves will be pushing people to buy Blu. So Toshiba are even hurting their other product lines by staying out.
Maybe there is something about Japanese companies and loss of face which prevents them changing their minds quickly. Or maybe its egos at the top. Sony went off in a similar huff about VHS and at the end of the day it was Sony who suffered, not JVC or other CEs.
What a joke, the continual comparisons between VHS, DVD and blu ray !
Does everyone just conveniently choose to forget that VHS had no competition, it was a revolutionary product, a player and a recorder that everyone on the planet wanted to own and it REVOLUTIONIZED home entertainment. Along came DVD and offered a similar REVOLUTIONARY product with huge advantages over VHS, and again, DVD revolutionized home entertainment for every TV in the world.
How can any person in their right mind compare blu ray to the above, it's absolutely F'N ridiculous to suggest otherwise!
Blu ray, or HD DVD, is a step up from DVD, it is NOT a revolution and it is only of any real value to people with a 42" or bigger HD TVs, a small percentage of the total TVs world wide!
VHS and DVD are still good for EVERY TV on the planet, their paths were never tied to a certain type of TV, their success was guaranteed.
BR IMO will become the favorite for the home cinema enthusiast, maybe with a reasonable market share, but it is NEVER EVER going to be the dominant format of choice, so for Toshiba to sit and watch makes very good business sense, after losing a truckload of money all ready on HD media, why on earth would you want to reinvest a bundle into a small market place, one that may never be more then niche.
Everyone also forgets, when you plug your current DVD player into your new HD TV, the difference compared to what you had before is huge, the first time I did it , i thought wow, how good is this, and that is what J6 is going to do, DVD is good enough for the masses.
BR will never beat DVD, by the time HD TV penetration is high enough to sustain better than 50% market share and BR has the dominant position in sales, downloads, flash, or whatever have all ready become very well established.
Add to that, sony trying to choke the life out of it's blu ray competitors with the PS3 and it's over the top royalties and BR's future is on thin ice to say the least.
DM can't help himself, he cracks a woody any time there is an article about Toshiba, good or bad he will spin it into a bad light to feed his own personal hatred for them, he is just another brainwashed sony zealot with an axe to grind, pathetic behavior from someone who should be representing this site as an unbiased professional.
So, Toshiba is the only CE company with any sense since every other CE company is making "unprofitable" blu-ray players?
The thing is, in any developing product category, you need to get in early in order to generate the IP necessary for future profitability. The price of gadgets these days is largely determined by the patents you need to license, not the cost of raw materials. Even though the blu-ray specs are mostly complete, there's still a lot of room to innovate in the manufacturing of the drives and in the software codecs.
By not investing in blu-ray now, Toshiba will have a hard time playing catch up if/when blu-ray goes mainstream.
Here is an interesting thing that hasn't been brought up in all of this deep thought about economics. What if it’s as simple as this... Toshiba is scared to release a BD player because of the swarm of HDDVD users that would expect a swap or discount for a Toshiba BD player. This is how they will lose money on a BD player right now for all you economic gurus out there. When HDDVD has been dead for over a year, I expect an announcement from Tosh regarding a BD player. Then when the die hard reds e-mail/phone in, the reps can just laugh…..
+1
I miss HD DVD.
Toshiba should bring it back.
There is nothing perplexing about it, the writer of this story obviously doesn't have any business sense.
1) Toshiba isn't about to take another risk with a format that isn't going anywhere fast and may never go anywhere
2) Sales of BD are very slow in not picking up pace
3) Perhaps you haven't heard about the tough economic climate, people are not forking out huge amounts of money at this point on expensive players and discs