DigitalMediaStocks.com, an investor and industry news portal for the digital media sector takes a look at the ongoing format battle between Blu-ray and HD DVD and its impact on market participants. Despite the uncertainty surrounding the next generation DVD format, the growing consumer demand for high- density media continues to strengthen the existing DVD/DVDR market, which has become the storage medium of choice for digital entertainment. Participants such as DVDR manufacturer Infosmart Group, Inc. (OTC BB: IFSG), chip makers Broadcom Corp and NECElectronics, as well as industry giants Sony, Toshiba and others within the consumer electronics industry, continue to take advantage of current DVD and DVDR demand with the flexibility to evolve and benefit from future directions surrounding high density technology.
As the format rivalry continues between Blu-ray and HD DVD, most agree that content availability is critical to the success of the new formats. The growing availability of high definition content has created a potentially lucrative market for next generation DVDs and market participants are all vying for a piece of the pie.
Impacting the decisions of manufacturers are many key factors such as cost, time and probability of market share success by each format. On the HD DVD side, cost savings is a significant benefit for manufacturers choosing this direction. Andy Kwok, CEO of global DVDR manufacturer Infosmart Group, Inc. (OTC BB: IFSG) explains, “As a media manufacturer, we are more than happy to push HD DVD format rather than Blu-ray for several key reasons. There is less re-tooling and capital investment. We can upgrade our existing production lines to HD DVDR production, which means less investment capital and a minimization of the new investment risk. Production cost is also lower than with Blu-ray, which is then transferred to the consumers. With price being a key decision making factor among buyers, HD DVD’s cheaper market price becomes important.”
Many industry experts forsee dual format drives as likely to emerge, supporting both Blu-ray and HD DVD formats. The market is already seeing signs of this as chip makers such as NECElectronics and Broadcom announce chip systems that will work with both standards and ultimately cut the cost of building the necessary players.
The ongoing format battle has brought high definition media further into the spotlight, but has also become a driver to additional growth within today’s DVD world. According to The NPD Group’s director of industry analysis for consumer technology Ross Rubin, “Most significantly the format war increases the allure of the previous generation of DVD where you have a single standard and abundant content and a mature ecosystem and you don’t have to worry about buying someone a gift of a movie in the wrong format.” This combined with the fact that DVDR volumes have picked up in the past few years as the prices have come down and installations of DVDR drives in personal computers continues to increase, bodes well for further growth within the global DVDR market.
Infosmart’s Andy Kwok adds, “At this moment, no one knows who will win this format battle, but both formats will be co-existing in the market for a few years before either one format finally takes over the other, or both are unified. As a media manufacturer, we will keep our eyes closely on developments and time our entry into this next generation high definition DVD market carefully.”
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Source: DigitalMediaStocks.com, Infosmart Group, Inc.