The Far Side of Tech

photo credit: William Hook

In this truly insightful interview the WSJ talks to Toshiba CEO Atsutoshi Nishida about his plans for the company after the failure of HD-DVD. I’ve read quite a few interviews with traditional Japanese CEO’s, and Nishida is definitely a uniquely pragmatic thinker among them.

When asked why he gave up on HD-DVD so quickly, he responds that he knew that everything was practically over when Warner left, and offers the following business advice nugget:

I didn’t think we stood a chance after Warner left us because it meant HD DVD would have just 20% to 30% of software market share. One has to take calculated risks in business, but it’s also important to switch gears immediately if you think your decision was wrong. We were doing this to win, and if we weren’t going to win then we had to pull out, especially since consumers were already asking for a single standard.

This sort of frank insight is surprising because traditional Japanese corporations tend not to concede defeat so easily. Take Sony for example–they wanted absolute victory with Blu-ray, so much so that they nearly sacrificed the Playstation 3 at the alter of of the media gods to make it happen. They put nearly the entire company on the line for Blu-ray, but in the end their gamble paid off.

What’s perhaps most surprising about this interview is Nishida’s commitment to the aging DVD platform, which if you think about, makes a certain amount of sense:

What people don’t realize is that Hollywood studios are going to release new titles not just for Blu-ray but for standard DVDs as well, and there are a far greater number of current-generation DVD players out there. If you watch standard DVDs on our players, the images are of very high quality because they include an “upconverting” feature. And we’re going to improve this even more, so that consumers won’t be able to tell the difference from HD DVD images. The players would be much cheaper than Blu-ray players too. Next-generation DVD players are in a much weaker position than when standard DVD players were first introduced.

While I didn’t expect them to jump ship and start manufacturing Blu-ray players right away, it is interesting to see how much faith Nishida still has in the DVD. He also makes some very good points about relying on upconverting–after all, the DVD format was incredibly successful, and will remain so for quite some time. If Toshiba started marketing the upconverting abilities of $50-$100 players they may just be able to convince average consumers that $400+ Blu-ray players aren’t worth it.

Nishida also mentions that he intends to spend more company energy on video download services, as well as allowing media from your computer to interact with your TV. I could very easily see a Toshiba device come out as an alternative to the Apple TV. And since Toshiba was Microsoft’s first big partner in the portable audio player market (which directly led to the Zune), I wouldn’t be surprised if both companies came together to attack the Apple TV.

In the end, it seems that Toshiba will be taking a more Wii-like approach to this next format war. Their decision to sell cheap players that upscale to high-definition resolutions may end up paying off in the long run since Blu-ray players won’t hit $200 until late next year, and DVD prices will lower as Blu-ray becomes more affordable.

Perhaps we shouldn’t count Toshiba out of this war yet? What say you dear readers?

[Source The Wall Street Journal via Digital World Tokyo]

Similar Posts

• Surprise? Bluray Adoption Slows, Upconverting DVD Players Find Success May 2008
• Netflix, You’re Breaking My Heart February 2008
• What the Warner Move to Blu-Ray Means for HD DVD January 2008
• HD DVD May Be Dead, But It’s Still a Good Deal February 2008
• The Good and Bad from the HD DVD Defeat and Blu-ray Triumph February 2008