Case Study
‘Blu-ray versus HD-DVD: A Standards Battle in High-Definition Video’
Discussion Questions
1. What factors do you think influenced whether (1) consumers, (2) retailers or (3) movie producers supported Blu-ray versus HD-DVD?
Every party in this standards battle had its own reasons for chosing one standard over the other. For instance, the motives for movie producers to choose Blu-ray were completely different from the motives for consumers to choose Blu-ray.
In our opinion, the main factors that influenced (1) consumers in their decision to support either Blu-ray or HD-DVD were technical differences, complementary goods and the size of the installed base. Supporting one of the standards, from a consumer-perspective, can be
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When the numbers of sold Blu-ray-players was much higher than the number of sold HD-DVD-players, more and more movie producers switched to releasing their movies exclusively on Blu-ray instead of HD-DVD.
2. Why do you think Toshiba and Sony would not cooperate to produce a common standard?
In practice, Sony and Toshiba didn’t cooperate to produce a common standard because in the development-phase they didn’t agree about which laser-technology to use. Sony wanted to use the more expensive blue lasers earlier on already, while the DVD Forum, chaired by Toshiba had doubts. The DVD Forum decided to create a technology that was based on the ‘old’ DVD-format. A little later on, Toshiba and NEC discovered that this option was not a real solution, but it was too late and too expensive to join Sony. So, they decided to develop their own technology.
It is highly likely that both Sony and Toshiba wanted to create a first-mover-advantage for themselves. By developing the standard for video-playback for the coming years, huge profits could be made. Profits would be made on the sales of blu-ray-players, the licenses sold to movie producers, but most important, the licenses sold to competitors. If Toshiba wants to produce a Blu-ray-player, a license had to be bought from the Blu-ray-licensing organisation, of which Sony is a member. This way, money streams directly from Toshiba to Sony.
3. If HD-DVD had not pulled
2. What forces are driving changes in the movie rental industry? Are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability?
I decided to do my research on Sony due to the advancement in technology and the competition between companies such as Microsoft, Apple, and Sony. I have been around long enough to know about Sony’s products but the real reason that attracted me to them for this essay is because I actually believe that they are having a negative trend. I am starting to see less Sony items in stores and I haven’t really heard much about them. Whereas companies such as Apple are constantly being talked about and you often see people walking around with some type of apple product in their hands. Today we are going to research Sony through a horizontal analysis and through different ratio analyses. Let’s see what we find!
There are a lot of strong competitors: Blockbuster, Apple, Red box, and etc… Beside, product in this industry is not differentiated. On the other hand, the products and services are not difficult to imitate. This market is very competitive.
5. Put yourself in Sony’s shoes. You look at the answers to the 4 above questions.
Occasionally, people use to go out and rent DVD’s to watch a specific movie from rental stores. Advancement in technology has brought a sufficient change in customer’s behaviors, today DVD rental stores have almost gone. Moreover, by time we saw enormous increase in channels being provided by cable providers, but today even that has been replaced by streaming media devices, thus my time, role of cable providers might also disappear due to the introduction of devices such as Netflix, Apple TV etc. “DVD sales have also been hit. The Los Angeles-based Digital Entertainment Group estimates DVD sales in 2008 fell 8% to $21.6 billion from a year earlier, while DVD rentals were flat.” Charny, Ben. "Viewers Tap Free Web Content." Wall Street Journal, Eastern
Retail spending on discs remained strong, indicating that physical and digital formats will continue to coexist in the marketplace. While overall disc unit sales were down 6 percent form the previous year, sales of movies and TV shows on Blu-ray continued to offset the decline in DVD sales. Sales of Blu-ray disc grew by 7 percent and accounted for 20 percent of total disc sales, up from 18 percent the previous year (Consumer Report 2013)
Competition between theaters often comes down to distance from home, convenience of parking and proximity of restaurants. Innovations by one theater chain are quickly adopted by others. The differing approaches of the theater chain companies are reflected in their cost of fixed assets per screen.
The forces that are driving change are more than likely going to be unfavorable to the movie rental industry considering the convenience and included perks of choosing them. I’ve had experience in the movie rental industry
4. The bargaining power of buyers: The outlook for the target market isn’t favorable for the movie industry because it will not be growing as fast as the overall population. Buyer power is a strong force because of the target market and several other factors including: the undifferentiated product offered, switching to an alternative is simple and low cost, and customers can stay home and watch movies. The consumers are also complaining about concession and ticket costs, along with the advertisements before the film is shown.
There are many different factors in the environment that influence Redbox Automated Retail. These factors include: general business ethics, United States copyright laws, the economic recession, unemployment, increased consumer debt levels, declining consumer confidence and spending, new technological advances, natural disasters, and content acquisition and license agreements. Although the previously listed factors each hold a certain degree of importance, the most relevant factors include new technological advances, content acquisition, and license agreements. The advancement in technology, such as digital access to movies via the internet, allows customers the convenience to access films directly from their home which weakens the consumer demand for DVD’s. Furthermore, content acquisition and licensing arrangements restrict the amount of titles that are available to Redbox resulting in litigation battles with large movie studios.
Q1. What are the key differences between Sony's and Bacro's strategies as far as their product roll out is concerned prior to Aug 1989 in the projector market (that is, you need to compare and contrast the chronological order and the scan rate/prices/other features of the models that both players introduced in the market prior to Aug 1989)? Why is it that both players were playing such different strategies prior to Aug 1989?
Before the advent of movie rental stores, to watch a new movie, people had to go to theatres or cinemas spending a lot of money. Video rental was the answer to the new needs. Since the 90s, video rental industry has become a very big business; in those years, rental prices rose as more and more people began renting movies. At the same time, new players entered the market creating strong competition inside the industry. In the last years, the field of home entertainment has changed dramatically because of the presence of Internet and new technologies (Recorded DVD & Video in the United States, 2009).
In the history of Sony, they tend to have many failures in creating a technology or gadgets. They fail to make the consumers accept the thought of their gadget. One example is the Betamax. But on the other hand Sony continuously innovate their products and they also in tend to create new ones. Sony is also the one
With the introduction of new technologies and the development of electronics products, people are now having more opportunities to view movies. However, home viewing is still the most popular way of watching movies. Accordingly, Movie rental has become an industry. This essay will give a detailed analysis of the global leader in the movie rental industry, Blockbuster.
Optical Recording Corporation (ORC) was established in 1984 with the main purpose of capitalizing on the technological innovation of James T. Russell. Russell’s new technology was based on his recent invention that revolutionized recorded music storage devices. Although Russell was not the first to come up with the concept of the Compact Disk (CD), he was among the first people to patent this technology. By 1985, Russell held over 25 patents in 7 countries across the world to various technologies related to optical recording and playback. Russell's intellectual property was purchased by ORC in Toronto in 1985, the firm then proceeded to notify a number of CD manufacturers that their CD technology was infringing on