Looming end to DVD war cheers consumers

Mon Feb 18, 2008 3:47am EST
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By Nathan Layne

TOKYO (Reuters) - An impending end to a format war over next-generation DVDs boosted shares in both victorious Sony, in the Blu-ray corner, and Toshiba, in the losing HD DVD camp, on Monday as consumers cheered an end to confusion over which discs will carry high-definition movies.

Shares in Toshiba Corp (6502.T: Quote), which a company source said was planning to axe its HD DVD format, jumped nearly 6 percent as analysts praised a move to cut its losses, while Sony Corp (6758.T: Quote) shares rose 1 percent.

The Blu-ray win means consumers seeking sharper movies on high-definition DVDs no longer have to choose between rival incompatible formats and run the risk of being stuck with a 21st century equivalent of Betamax -- Sony's videotape technology that lost out to VHS in the 1980s.

Having one format should also help accelerate the shift to the new technology in the $24 billion home DVD market.

"It doesn't make sense for Toshiba to continue putting effort into this," said Koichi Ogawa, a chief portfolio manager at Daiwa SB Investments. "It needs to cut its losses and focus its resources on promising businesses."

Both DVDs can carry high-definition movies, but growing support from Hollywood and big U.S. retailers such as Wal-Mart Stores (WMT.N: Quote) has given Blu-ray a crushing lead in the war.

Overall sales have so far been small as shoppers, faced with rival machines that played only one type of disc or the other, have held back.

"I was expecting Blu-ray to win but I was kind of waiting it out," said Masahiro Taniwaki, a 26-year-old systems engineer shopping for a Blu-ray recorder at electronics retailer Bic Camera 3048.Q in Tokyo.   Continued...

<p>Toshiba Corp's HD DVD player is displayed at an electronic shop in Tokyo's Akihabra district February 17, 2008. REUTERS/Yuriko Nakao</p>