How to Design a Technology Standard: Sony’s Strategy in the High-Definition Optical Disc Market

By Julien Pillot

English

The benefits derived from having a technology imposed as a market standard are widely discussed in the economic literature. This also true of the means and strategies for achieving this dominant position. However, in the context of standardization in the high-definition sector (Blu-Ray Disc versus HD-DVD), traditional factors used to explain the success of the former standard at the expense of the later one are insufficient. This paper highlights a competitive leverage strategy using the Sony PlayStation 3 as a decisive factor behind the final adoption of the Blu-Ray Disc standard. However, is this type of strategy valid as well as lawful? The paper focuses on the predatory risks affecting the sector given the lasting monopoly enjoyed by Sony since potential new players seem to be relatively far behind in terms of technology. . JEL codes: L12, L15, L41, L82, O33

Keywords

  • standardization
  • leverage strategy
  • predatory conduct
  • multimedia industry
  • Blu-Ray Disc
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