Smart Nerds Always Finish First: Toshiba’s HD DVD Victory

adxGetMedia.jpegLike a wallflower at the high school dance, cool-tech poseur Toshiba dug out its pocket protector on Tuesday and slunk back into its role as the nerd of the technology industry.

A series of rejections from the cool kids like Warner, Netflix, and Best Buy left poor Toshiba standing all alone in the corner of the gym. And unless you’re Billy Idol, dancing with yourself is a lot worse than just putting those taped up glasses back on.

In other words, the modest manufacturer of spare parts for nuclear power plants and washing machines has decided give up on being part of the in-tech crowd: Toshiba has axed its next-generation high-definition DVD disc format, HD DVD.

This decision effectively hands the market to studmuffin Sony and its sexy Blu-ray disc format.

In the end, though, does it really matter?

The internet is poised to wipe out the market for physical movie media, anyway.

Amazon.com and Apple, among others, already offer downloadable HD content comparable to Sony’s Blu-ray.

So, was Toshiba’s decision submissive or sage?

Before I get to that, let’s consider the fact that we live in an HD era.

Movies and television are becoming less about stories and characters and more about Gregory House’s stubble and Kate Cattrall’s stretch marks.

Toshiba’s HD DVD was a rival disc format to Sony’s Blu-ray. Both were designed to replace DVD and usher in a new era of high resolution image and sound for folks who prefer their cinema served with a heavy dose of couch.

In 2005, the companies tried to reconcile their two formats. But in typical high school fashion, they instead decided to let their peeps fight their battle for them. So consumers have spent the last three years stiffed with a popularity contest between HD DVD and Blu-ray.

From the start, due to its haut geek heritage, Toshiba’s chances were slim.

Sony had all the connections into the cool crowd and easily managed to woo the requisite Hollywood types into its clique. (Remember Michael Bay’s drunken tantrum when Transformers was slated to hit HD DVD exclusively?)

Of course, it didn’t hurt that Blu-ray was just plain better — though that quality didn’t help Betamax in the 80s.

It was only a matter of time until retail overlord Wal-Mart delivered the ultimate snub last week by swearing off the HD DVD format altogether.

So with little fanfare, Toshiba likewise announced they were dumping HD DVD. That $480 million budget item will instead build a couple of factories in Japan this year.

The stock market breathed a sigh of relief and instantly bumped Toshiba’s stock by about 6%.

Sony was silently smug in the way that cool kids always are when they win.

But in the end, who cares? The internet is already eroding the market for physical movie media with downloadable high definition content.

So, despite the seeming victory of Blu-ray, Sony still faces an uphill battle regarding the market for high definition movies.

The painful reality for Sony is that Toshiba’s move is probably the right one in general.

The future of HD won’t involve physical media such as HD-DVD or Blu-ray discs. Instead, the internet will deliver the goods.

In the past, physical media such as VHS tapes and DVD discs made sense for bringing movies home.

But with the increase in bandwidth and the improvement in the quality of online digital content, the internet is fast becoming a much better solution.

Why bother with discs that have to be shopped for, purchased, stored, and (even worse) organized?

Why worry about discs that can be lost, damaged, or eternally loaned out?

From the internet you can just download the same thing on a whim and at a moment’s notice without any fear of the peanut butter fingers of toddlers. And DRM is the perfect excuse for telling your friends to go buy their own copy.

In the States, Amazon.com’s Unbox service offers HD movies for rental and purchase direct to your computer.

Apple offers the same in iTunes. However, with their wicked-cool Apple TV you can order and  download movies and TV shows right on your television.

Viewed in the light of the internet, some might say that Toshiba is more demonstrating wisdom than humility by handing the HD disc market to Sony.

After all, there are probably more losses than gains to be had with it. After investing billions in Blu-ray, it’s unlikely Sony will realize any return before internet-borne HD content obliterates the physical media market.

So as Toshiba sullenly sneaks out of the gym, we see that the clever child has spiked Sony’s punch with some Spanish Fly. Blindly incited to carnal market acts of seduction, Sony will lead its newfound hard media partners into many an illicit affair.

In the meantime, what’s Toshiba up to?

Heck, their new factories will be devoted to the manufacture of flash memory. And that’s the stuff that goes into iPods for storing HD movies that have been downloaded over the internet.

Originally published in the Yukon News on Friday, February 22, 2008.