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Research Firm Predicts Skyrocketing Demand for HD DVD

Date: 2007-12-14

[Abstract]
   Perhaps, there are more standalone HD DVD players installed compared to Blu-ray disc (BD) players, but the indisputable advantage for the latter is Sony PlayStation 3 game console with BD driv...

[Content] PCDigitalMobileGame

Perhaps, there are more standalone HD DVD players installed compared to Blu-ray disc (BD) players, but the indisputable advantage for the latter is Sony PlayStation 3 game console with BD drive, which has been sold through in millions of units. But research firm TDG Research predicts that going forward HD DVD may leave Blu-ray behind thanks to low prices.

“Today’s high-def DVD owner is likely an early adopter with a knack for power gaming; most certainly tech-sophisticates not at all mainstream in temperament. The next wave of buyers is comprised of early mass-market consumers, a much larger segment with a focus on practical considerations such as price. It is TDG’s opinion that the format which can best address the needs of mainstream consumers will emerge as the winner of this format war,” said Michael Greeson, president and principal analyst with The Diffusion Group.

According to research from The Diffusion Group, close to one-third (33%) of non-HDTV households are interested in purchasing a new HDTV in the next six months, an encouraging sign for HDTV manufacturers and, by relation, high-definition video player makers.

The same research found that the characteristics of these “HDTV Intenders” vary widely from that of current HDTV owners. HDTV Intenders tend to be younger, single, more ethnically diverse, and have lower annual household incomes than current HDTV owners – in many respects more characteristic of mainstream consumers than the early adopters who today own an HDTV.

While this trend could in theory benefit either Blu-ray or HD DVD, the data suggests otherwise. Among HDTV Intenders who are likely to purchase a new high-def DVD player in the next six months, 43% prefer HD DVD, 27% prefer Blu-ray, and 30% are undecided.

TDG believes there will be several “waves” of high-definition video player buyers, each of which will be motivated by different factors. The most immediate wave, which is expected to be exhausted by early 2008, is comprised of the remaining early adopters “who have yet to buy a high-def DVD player and which show a preference for Blu-ray”. The second, and more sizable, wave will consist of early mass-market consumers who, “while less enthusiastic about technology” and are “very price sensitive”, are more likely to favor HD DVD. As a result, HD DVD needs to maintain price advantage over Blu-ray to stay competitive.

TDG recently fielded two separate primary research studies focused on consumer interest in next-generation media platforms: the first, an October 2007 survey of 1500 U.S. adult Internet users; the second, a November 2007 survey of 2000 U.S. adult broadband users.

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