Why HD DVD costs less than Blu-ray

HD DVD has a natural price advantage over Blu-ray - and that's helping it win fans around the world. Or so claims HD DVD spokesman Olivier Van Wynendaele in an exclusive interview with Tech.co.uk.

Van Wynendaele argues that selling next-gen players at low prices is key if the HD DVD and Blu-ray camps are ever to persuade people to part from their existing DVD players and movie collections.

He quotes a US study that Toshiba conducted, which shows that $200 dollars (£100) is the 'magic price point' at which switching to high-def becomes a no-brainer. Van Wynendaele says:

"More than 60 per cent of the consumers that were surveyed were saying that at this price they would consider buying. At $300 30 per cent of them said they would buy and at $500 it was only 8 per cent."

HD DVD prices 'not subsidised'

If true, the 'magic price point' gives the Toshiba-backed HD DVD format an obvious advantage over Blu-ray: it is already selling standalone players for $200 or less in the US (and for £200 here), and they're not being subsidised by profits from software sales:

"We can't get our money back from the sales of software. We are Toshiba. Everybody in HD DVD's eyes is either doing software or hardware. We can't have the Sony strategy to discount our hardware and get it back on software. It is not possible unfortunately. We are not discounting our hardware at all."

Instead Van Wynendaele claims that it's the technology inside HD DVD players that makes them so cheap to own:

"We based our technology on the same disc structure as DVD, so pick-up lenses, drives and so on follow the same principles; following the same technology as the technology that has been amortised in the last 10 years already."

"Of course the new things are expensive - blue lasers, diodes - but overall the bill of materials is less than for Blu-ray players.

Blu-ray tech simply costs more

In other words, Toshiba and others have already got their money back on much of the technology being used, so there's no need to gouge the consumer (i.e. you) to help pay for it.

That's not the case for Blu-ray suggests Van Wynendaele. Blu-ray embraces a whole suite of technologies from a different disc structure to the use of BD Java for interactive applications:

"For Blu-ray everything has to be invested from the start, and amortised on I don't know how many years," Van Wynendaele says.

"It can't be as cheap as HD DVD. It is at least two times more expensive on the Blu-ray side. This is why their players are twice the price of ours."

PlayStation 3 is a threat

However Van Wynendaele does acknowledge that Sony's PlayStation 3 games console - with its new entry-level £280 price tag - does come close to the prices being charged for HD DVD machines.

"In theory the games console is less expensive than the [standalone] Blu-ray player, and it is true that our first real competitor from Blu-ray is the PS3. But if Sony is following the traditional business model of games consoles then they are making a loss on that."

It should be noted though that Van Wynendaele's comments on Blu-ray pricing reflect manufacturers suggested retail prices, and not the actual cost of items you can buy online or on the high street.

For while Toshiba's HD-EP30 player is available to buy here for £200, you can also pick up a Sony BDP-S300 Blu-ray player for just £50 more. Its suggested retail price, however, is £399, which is inline with Van Wynendaele's comments.