I'm On the Winning Team for Once!

Toshiba to drop HD DVD, sources say

The format war has turned into a format death watch.

Toshiba is widely expected to pull the plug on its HD DVD format sometime in the coming weeks, reliable industry sources say, after a rash of retail defections that followed Warner Home Video's announcement in early January that it would support only the rival Blu-ray Disc format after May.

Immediately after the Warner announcement, the HD DVD North American Promotional Group canceled its Consumer Electronics Show presentation. The following week, data collected by the NPD Group revealed Blu-ray took in 93% of all hardware sales for that week.

Toshiba subsequently fired back, drastically cutting its HD DVD player prices by as much as half, effective Jan. 15. But a hoped-for consumer sales surge never materialized; retail point-of-sale data collected by the NPD Group for the week ending Jan. 26 still showed Blu-ray Disc players ahead by a wide margin, 65% to 28%.

"An announcement is coming soon," said one source close to the HD DVD camp. "It could be a matter of weeks."

Microsoft is the other big player in the HD DVD equation. Last fall when Paramount Home Entertainment announced it was dropping its dual-format strategy and would release titles only in HD DVD, giving that side a brief resurgence, a pitch to journalists for interviews came from a Microsoft email address.

Several phone calls to Kevin Collins, Microsoft's normally accessible "HD DVD evangelist," were not returned. Nor were calls to Ken Graffeo, the Universal Studios Home Entertainment executive who doubles as co-president of the HD DVD North American Promotional Group.

When Warner abandoned HD DVD in January, the format was left with just two of the six major studios backing it, Universal Studios Home Entertainment and Paramount Home Entertainment. This week, two key retailers, Best Buy and Netflix Inc., both got off the fence and threw their support behind Blu-ray exclusively, citing widespread studio support and consumer preference. Both companies said Warner's decision was a turning point in their strategies. Blockbuster Inc. last summer already decided to offer only Blu-ray Disc titles at its company-owned rental stores.