HD-DVD fallout: No cooling off, returns or refunds

Australian’s who jumped in early with Toshiba’s HD-DVD technology are left with an expensive upscaling device, CD/DVD burner and no future movies.

The announcement this week by Toshiba that it will no longer develop, manufacture and market HD-DVD players, has left the local operation with the task of explaining the fall-out to its Australian customers and 'educating' its partners as to what the decision means for their business and those early adopters who took a punt with Toshiba's HD-DVD drives.

In fact Toshiba is still selling its HD-DVD drives and still has many promotions for its HD-DVD technology still valid in Australia including its 'buy any Toshiba HD-DVD player and receive 11 Bonus HD-DVD titles' as well as other offers. Retailers in the US have already launched a HD-DVD fire sale to clear stock and movies.

Mark Whittard, Toshiba's general manager ISD told us that these promotions are still ongoing and the special offers still stand when customers purchase those players. Any cooling off period with recent purchases is the retailer's decision.

"There is a lot of inherent value in the devices, they still work and there is nothing wrong with them. We've had aggressive pricing on the HD-DVD drives and when compared against other upscale devices they offer similar value. We are not walking away from the products; these products have got significant value."

Customers can still do everything...

Toshiba HD-DVD drive products first appeared in the home entertainment shelves in late 2006, but Australian PC World tested the first notebook with a HD-DVD drive in June 2006 -- almost two years ago, yet Toshiba says it doesn't have specific details on the numbers of standalone drives or notebooks with HD-DVD drives sold in Australia. Essentially it doesn't know how many customers are affected by its decision at this time.

Whittard said in terms of the notebook market, the drives were in Toshiba's top end products, not volume.

"It was put in the PC platform as a product differentiator, allowing customers to take a movie and run it through to see what HD-DVD is like. It's not something we used to sell laptops," he said. "The HD-DVD players and the PC systems, the product still works." On the PC platform the HD-DVD drive was an added value, and Toshiba says it will continue to support these products, and provide spare parts up to five years minimum, which is more than the life of the product.

Toshiba is maintaining that customers can still use the drive to do many other things including playing and burning CDs, DVDs, and upscaling DVD movies.

"Most people cannot tell the difference between HD and upscaled DVD movies. Plus the players and PCs are networkable, so you can stream HD content through that too," Whittard said.

...except add to their HD-DVD collection

Whittard added that there are over 1000 HD-DVD titles, and potentially more to come, saying "we still need to talk to the studios".

But Paul O'Donovan Gartner's, Principal Analyst Semiconductor Group, believes customers cannot count on many more HD-DVD titles coming out. "Realistically there would be very few," he said. "There must be some in the pipeline, but any movies that have not been authored for HD-DVD will be diverted to Blu-ray. The studios are not charities they are out to make money and that's Blu-ray now not HD-DVD."

While upscaling devices are currently available, and Toshiba is spruiking the HD-DVD's upscaling ability, O'Donovan believes two factors will determine the future for upscaling devices, the cost of Blu-ray players (as well as the PS3) and the cost of the DVD content.

"If true HD kit is cheap enough down the track, then why would a customer waste money on 'upscaling' technology? It never looks as good as real 1080i or 1080p even," he said.

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