More HD-DVD Woes and Telus’ Problems

Final nail in the coffin? Wal-Mart stores decided, this past Friday, that its high-def optical player of choice would be Blu-Ray.  Sales of HD-DVD players and media would end by June of this year. But with the seemingly inevitable death of HD-DVD, it remains to be seen how many people will actually buy players or media up until June. Wal-Mart’s announcement comes on the heels of similar announcements by Netflix, and then Best Buy, earlier this week.

In a related note, sources are saying Toshiba is in the final steps of closing down operations of its HD-DVD business. In light of overwhelming support for Blu-Ray, I imagine Toshiba has decided it’s for the best to throw in the towel, as opposed to continuing the money-losing tactic of severely undercutting Blu-Ray players on price. I’m still with Steve Jobs on this whole format war though – I don’t particularly care, regardless of the victor, as I see video downloads taking an increasing share of the market. I have a PC hooked up to the HDTV through HDMI and sound going out through optical. What incentive is there for me to spend hundreds upon hundreds of dollars for Blu-Ray or HD-DVD when I can be watching 720p or 1080p content, played through the computer? Plus, I have the added benefit of being able to game on my HDTV – consoles just don’t do it for me. Computers are playing an increasingly large role in home multimedia, cutting the market for optical disc and player sales.

And now onto Telus’ Q4 earnings, announced earlier this week. Telus’ CEO, Darren Entwistle, was disappointed in its wireless subscriber additions, commenting, “Clearly this aspect of Telus’s performance is one that I am less than satisfied with“. Net subscribers were 161,400 in the 4th quarter, down 11% from the previous year.

Wireless penetration in Canada is reaching over 60%, and with rates as high as they are, I’m not surprised subscriber sign-ups are starting to slow, especially in the CDMA carriers, Telus and Bell. Having worked one of my co-op semesters at Bell Mobility, I’ve performed a lot of market research – although wireless minutes of usage per month per user in Canada is significantly lower than in the United States (somewhere in the range of 500 minutes and 850 minutes respectively), ARPU is actually significantly higher in Canada than the United States. The exorbitant wireless service prices in Canada are a well-publicized matter. Just do a search in your favorite search engine and you’ll find plenty of material to back that up.

In the past, the higher pricing was sustainable – ‘it was what the market was willing to pay‘. But as these new subscriber numbers are starting to show, perhaps it’s time to rethink that mentality

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