After a bitter loss to Sony’s Blu-ray HD system Toshiba is looking to make their next move. Predicting that optical disc have their days numbered anyway they are skipping ahead to sell players employing the SD cards that you might find in your digital camera. While I don’t think anyone disputes the fact that digital SD cards are the future of receiving content, I’m not sure if the public is ready for this step. The wireless potential is huge as well, as seen in the Eyefi SD card. Good of Toshiba to be thinking super long term, but right now with the economy in the toilet people are having a hard enough time converting to Blu-ray players let alone an entirely incompatible new system.

The potentially not so distant future will see companies like Mod Systems, who provide digital kiosks, taking off and leading in content distribution. In the same way that Blockbuster wanted to reduce store sizes and move to a digital kiosk based platform, Mod Systems would provide retailers with a kiosks that can quickly download content onto an SD card. Toshiba recently invested $24-million into the company to ensure it’s future.

Blockbuster CFO Tom Casey recently warned of this shift saying “”What you need to understand is we really have a market that we address that’s nearly $36 billion in size. Video-on-demand is actually pretty small.” In an apparent shift of strategy Blockbuster is going to increase fees in order to pay for store upgrades. This will include remodeling some of the stores to include gaming stations and cafes. Now I don’t know who would want to go to Blockbuster for a cafe experience aside from 12 year olds unchecked by their parents, but this doesn’t seem like their wisest decision. I full supported their move to go forward with kiosks and digital downloads but increasing their already alarming high rental prices in order to make their stores more of a destination seems strange.

Blu-ray does costs more for them to stock so I could see a higher rental fee for Blu-ray discs. If the future, as Toshiba likes to think, is in digital downloads to an SD card then this is the wrong move.


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