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Toshiba Steps Up HD DVD Push Post-CES; Slashes Player Prices

Now, Toshiba is fighting back — a week after the death-bed stories, if not obits, in response, first, to Warner Bros.’s embrace of Blu-Ray from Sony (NYSE: SNE) and then to Universal’s decision not to date HD DVD exclusively. The consumer electronics company, which has placed a large bet on HD DVD being at least one of two formats, is slashing prices on is HD DVD players, with some dropping to as low as $149.99, according to AP. It’s a half-empty, half-full moment for retailers, who could see a sales boost at the same time that some may be faced with price matching from holiday sales. The headline on the release actually explains the strategy: Toshiba Deploys New HD DVD Marketing Initiatives Based on Strong Fourth Quarter Unit Sales: Mass Market Acceptance Confirms that HD DVD is the Consumer’s Choice for Next Generation High Def Entertainment.”

The theory: play up the acceptance by consumers who have already paid for HD DVD versus those who get it with something else like a gaming console, get more players out there — and dare studios to ignore those consumers. In addition to the sales cuts, Toshiba will launch “major initiatives, including joint advertising campaigns with studios.” Toshiba says it closed 2007 with approximately 50 percent market share and an 80-plus percent share of next-gen equipped notebooks sold in Q407.

Yoshi Uchiyama, Group Vice President Digital A/V Group: “While price is one of the consideration elements for the early adopter, it is a deal-breaker for the mainstream consumer.” But will mainstream users pay even reduced amounts for something without full studio coverage?

Online content access: Universal Home Video, Paramount Pictures and DreamWorks Animation SKG report that “an average of 30 percent of HD DVD owners have accessed Web- enabled network features and continue to do so regularly.” Players hooked up to the internet can stream new content, trailers, etc.