glasgow_stan_no_tie_outdoors_med.jpgI joined a roundtable yesterday with Stan Glasgow, president of the U.S. division of Sony Electronics. He was happy that Blu-ray has won the next-generation DVD format war against HD DVD and has seen a significant bump in demand for Blu-ray players.

Glasgow can be funny. Asked if Sony would give consumers a discount on a Sony Blu-ray player if they turn in their Toshiba HD DVD players, he said, “I won’t make up for Toshiba’s sins.”

But he reiterated his concern that the tough battle is now just starting. The tough job is convincing consumers that Blu-ray is much better than standard DVD and also, for the videophiles, better than upscaled DVD players where DVD video processors scale an image up to 1080p resolution.

“It DVD took ten years to get where it is,” he said. “Blu-ray is two years or three years into its launch, depending on when you consider the start to be. There is a long way to go for Blu-ray.”

Right now, DVD players sell for less than $100 while stand-alone Blu-ray players are selling for $399. At that price, Sony isn’t making a profit on the hardware, Glasgow said. By the end of the year, he expects those prices to fall to $299. Meanwhile, while he doesn’t speak for the Sony games division, he said that the PlayStation 3 has obviously gotten a boost from the Blu-ray victory. The $400 and $500 versions of the PS 3 have built-in Blu-ray players.

Glasgow said Sony has recycled 1,000 tons of equipment since September in a partnership with Waste Management. There are 90 sites and Sony probably needs 500 over time. The goal is to recycle one pound for every pound it sells and to get a recycling site within one mile of 95 percent of the U.S. population. Sony is paying for it and encouraging its competitors to do it as well. Sony’s running a test in Colorado to see if consumers will return equipment for recycling if they get a coupon to buy Sony goods.

“I’m hopeful over time it is the right thing to do,” Glasgow said.

He isn’t, however, all that concerned about digital downloading of movies. Right now, it takes hours to download high-definition movies and most of those aren’t in the high-quality 1080p format. Sony is investing in video downloading and believes it will happen, but not at the expense of physical media such as Blu-ray disks.

“Downloading will grow,” he said. “But it won’t grow disproportionate to the physical media.”

Glasgow says that people are buying a lot of 1080p TV sets. In general, flat-panel TV sales are going great because of the anticipated switch over to digital TV in 2009. Samsung closed 2007 as the leader worldwide, but Sony leads in the U.S. and also was the strongest in the holidays, he said. He thinks that LCD TVs are pushing plasmas out of the market, having won the war for 40-inch screens. Now plasma is relegated to 50-inch and 60-inch screens and Glasgow vows LCDs will chase plasma out of those niches. (See this on Pioneer exiting plasmas).

Will consumers be able to access YouTube directly from a Sony TV via a wireless Internet connection soon? Glasgow said it’s up in the air but could happen in the next six months to a year.

He said Sony has high expectations for its partnership in professional high-definition broadcasting with NBC for the Beijing Olympics and he expects the benefits of that should cascade down to HD consumer products. NBC is sending dozens of trucks with HD equipment to China.

Sony’s been pushing HD technology in its coordinated HDNA advertising campaign since last fall. That will pick up again in April and continue through the year as a theme that unifies all of Sony’s products. About 150 million people have seen the HDNA advertising, reaching twice as many people as other Sony campaigns.

Stuart Redsun, senior vice president of corporate marketing, said that Sony is trying to avoid having its different divisions compete for the same consumers. So now it is firing “silver bullets,” where it amasses a coordinated markeing and ad campaign to sell a bunch of Sony products.

He said that the launch of the Amazon Kindle has helped sales of the $299 Sony Reader, which is now in its second version. He said Reader sales are ahead of expectations. He believes there is demand for read-aloud audio versions of e-books. As for the industrial design of the Kindle, Glasgow said, “The Kindle is ugly.”

As for 2,000 by 4,000 resolution video, Glasgow thinks that’s 10 years off before that becomes the new standard for HD. Some theaters are moving to it so that they can keep theater goers captivated. But there is a big ecosystem that has to build up around a resolution shift, not the least of which is a proliferation of 2K by 4K video cameras. The movie folks are thinking about it now, but it’s a long-way off. Thank the Lord.

Glasgow said he is watching the economic situation unfold in the U.S. He expects that foreclosures and credit problems will create ripple effects for everyone. But so far he says he hasn’t seen an impact on consumer electronics sales. He said Sony’s electronics division broke records in the fourth quarter in the U.S. and that Sony continues to see healthy sales growth. Sony continues to expand its Sony Style stores across the nation and plans to have 60 by 2010. It has “shop in shop” mini Sony Style stores inside stores such as the Nebraska Furniture Mart in Omaha.

“We’ll be doing that with other retailers,” he said. “Maybe at some future point we will do it in a Nordstrom’s. I don’t know. We think it delivers an integrated Sony experience.”

Update: The Financial Times reported that Glasgow said at the dinner that Sony was talking to Microsoft about putting a Blu-ray player into the Xbox 360. Glasgow said it was possible but I didn’t take it seriously. I raised the obvious problem. Most Xbox 360 games depend on having a fast DVD-9 player to spin the art off a disk at a certain speed. Blu-ray players are currently slower and so they dispense art to the machine at a slower rate. That seems to be an architectural obstacle to Microsoft incorporating Blu-ray, at least until the Blu-ray players get faster as well as cheaper. At best, maybe Microsoft could do an add-on external Blu-ray player for movie playback only.