Blu-ray is winning, but now are they going Betamax and Microsoft in one fell swoop? Antitrust, here we come!

Anyone remember Betamax, Sony's VCR format that was technically better than, but cheaper than VHS? Anyone else remember that Sony lost that war to the lower quality but cheaper to license, produce, and sell VHS player? A small snipped that I overlooked in last Wednesday's NYT suggests that Sony might be dooming themselves to repeat history:

Mr. Glasgow expressed hope that price levels wouldn't collapse the way they did for DVD players. To protect against this, he said the Blu-ray Association, the group that controls the Blu-ray standard, has not licensed it to any manufacturers in China. (Cheap players from China were a large part of the collapse of the DVD player market.)

"Will there be Chinese players? Yes," he said. "We don't need to drive that and hand the technology over" any time soon, he said.

 

Let me get this straight. You (the Blu-ray Association) are pushing an expensive (albeit high-quality product) that can only survive with widespread adoption, yet you aren't going to allow it to be licensed to manufacturers that can get your product in the hands of millions of customers to keep the price up?

Two things come to mind: most Americans are happy with DVD. We like it more than VHS. It lets us do everything Blu-ray does. Even if we bought HD-DVD players, they still upconvert our regular DVDs to look better. DVD is a nice, open format. We can even make our own movies on DVD. So, for us to want to switch, we really need a clear incentive, and artificially driving the price up does not help.

Second. The Blu-ray association is a group of companies. A "trust" that controls the licensing of patents related to Blu-ray disc technology. Now, for them to refuse to license a technology to a manufacturer that can make a cheaper Blu-ray player, well, that would "fix" the price at a certain level. Come to think of it, isn't "price-fixing" a key component in "anti-trust" law?

I've heard that somewhere before...that whole thing about "price-fixing..." Where was that?

Oh yes, the Sherman Anti-Trust Act. Let's take a look, shall we?

15 U.S.C. §1: Trusts, etc., in restraint of trade illegal; penalty

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

15 USC §3

Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States or of the District of Columbia, or in restraint of trade or commerce between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Columbia, or with foreign nations, or between the District of Columbia and any State or States or foreign nations, is declared illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or both said punishments, in the discretion of the court.

 

Uh oh. If you're going to refuse to license a product to keep the price artificially high, shouldn't you refrain from announcing it in the pages of the Grey Lady?

Just a thought.