Who's Going to Lose: HD-DVD, Blu-Ray, or You?

[EVPohovich]

This article is copied in it's entirety. Linked below.

By John Gaudiosi

Sony learned the hard way with its Betamax tape format that consumers ultimately want only one choice when it comes to new movie formats. The DVD format continues on a record pace because it was a unified disc with all of the movie studios and hardware manufacturers on board. The home entertainment industry is in turmoil with two competing formats, one backed by Sony (and others), the other by Microsoft (and others).

This war between Blu-ray Disc and HD-DVD is extremely nasty, as members from each camp throw barbs at each other. Unlike the console wars, which has Microsoft, Sony, and Nintendo actually expanding the overall videogame market, this next gen DVD battle is not helping consumers, retailers or anyone not affiliated with one of the two sides.

Having lost the Betamax war to VHS, Sony placed its new Blu-ray Disc technology in the PlayStation 3 and the majority of movie studios came on board given Sony's track record with getting PlayStations into homes around the world in record numbers. While PS3 has been slow to gain traction thus far, recent hardware price reductions have the home entertainment industry excited.

I spent two days in Los Angeles in Hollywood, Century City and Universal City checking out the latest BR-D movies and new playback functionality for BR-D players, including PS3. Execs from major Hollywood studios as well as Sony and Panasonic took time to talk about the format war.

"We want this to happen quickly because we believe the longer the continued existence of two formats goes on it's not good for the industry," said Gordon Ho, executive vice president of marketing, product and business development, Walt Disney Home Entertainment. "I think we have to have a single disc format because it's what the consumers and the retailers want."

According to those in the Blu-ray Disc camp, the writing's on the wall for rival HD-DV, the only thing that seems to be keeping the format alive is Microsoft. With Universal Studios Home Entertainment and Paramount Pictures Home Entertainment exclusively supporting the format (Warner Bros. Home Entertainment supports both next generation DVD formats), Blu-ray Disc movies are outselling HD-DVD movies by a margin of 2 to 1. (The HD-DVD counters that HD-DVD movies maintains a 4 to1 software attach rate over Blu-ray.) The Blu-ray supports say that HD-DVD should surrender, but instead are taking some "last gasp measures" to continue the consumer confusion.

The reason gamers won't be able to play the Transformers movie on PlayStation 3 is because Toshiba anted up cash to Paramount to lure the studio over to its exclusive HD-DVD camp. Previously, Paramount had released all of its titles on both platforms. According to industry insiders at the event this week, Paramount was paid as much as $150 million to make the exclusive move for an undisclosed amount of time (perhaps as long as 18 months). The studio is rumored to have been paid $50 million alone for the Transformers HD-DVD exclusive, according to executives at the conference who didn't want to be identified for this story.

"Our decision to back HD-DVD was based on having the benefit of fully experiencing and exploring both formats for the past year and after careful analysis deciding to dedicate our resources to support the format best suited for the most compelling consumer offering and the future of our business," said Alan Bell, Chief Technical Officer, Paramount Pictures. "Beyond that, it's our policy never to comment publicly on the details of company agreements."

After the Paramount HD-DVD announcement, Steven Spielberg came out saying his movies would not be released on that format. Sony Pictures Home Entertainment is releasing Spielberg's Close Encounters of the Third Kind on BR-D this fall. Michael Bay has also been outspoken about his movie only being available on HD-DVD.

The other route HD-DVD is taking to encourage consumers to upgrade to their format is lower hardware prices. Kmart is only selling HD-DVD players. Toshiba's HD-A2 player retails for under $200 at Wal-Mart, Target and Amazon.com. Consumers get five free movies with this hardware. On Black Friday, Sears will sell Toshiba's HD-A3 for under $169, which will come with seven free HD-DVD movies. (On the BR-D side, Blockbuster is only selling and renting BR-D movies.) And this Friday Wal-Mart has a limited number of players for under $100.

"With all the retail momentum behind HD-DVD, I've even seen prices as low as $164 for the $179 Xbox 360 player that include a free copy of 'Heroes: Season 1' on HD-DVD, plus the free movie in the box along with five free mail-in offer that comes with your purchase, regardless of where you buy," said Jordi Ribas, General Manager of HD-DVD, Microsoft. "I can't speak to specific numbers, but based on recent NPD data, there have been more Xbox 360 HD-DVD players sold than all Blu-ray standalone players combined. The Playstation 3 simply hasn't been the gamer changer Sony had hoped it would be."

One home entertainment executive, who supports Blu-ray Disc, said if Microsoft was serious about HD-DVD they would put it inside of the Xbox 360. In reality, many home entertainment executives believe Microsoft is doing all it can to continue the format war for as long as possible. For Microsoft, which wants digital delivery of entertainment like its Xbox Live Video Marketplace to become the key form of consumer consumption of entertainment across multiple PC and Windows Vista-enabled devices, having a clear-cut winner in the next gen DVD war is not to its benefit. The longer consumer confusion continues and the longer many consumers remain on the sidelines awaiting a single format to emerge victorious, the more digital delivery-enabled devices are sold into the market.

"There's an 800 pound gorilla trying to confuse the consumer in an effort to get control of online content in the future," said Mike Dunn, worldwide president of 20th Century Fox Home Entertainment. "A lot of people will end up paying money for a format that won't be around in 18 months."

Ribas countered that this is a completely baseless claim.

"Microsoft has a team dedicated to the success of the HD-DVD optical format and we will continue working closely with our partners to provide the best experience and value for consumers," said Ribas. "We are helping bring movie lovers a format which offers a consistent and compelling high definition experience, all at the most affordable price. Superior picture and audio are a given, you have to have this, but interactivity and web-enabled features utilizing Microsoft's HDi technology allow movies to live beyond what was stamped on the disc--this is critical. Ultimately, connected entertainment experiences are the future of our business, and HD-DVD was developed with this in mind."

Bell said this format war is not about who wins or loses. He said that currently, mainstream consumers are reluctant to invest in the next generation formats because they don't want to make the wrong decision.

"We believe the combination of affordable players and a strong slate of films can influence consumers to make an informed and gratifying decision," said Bell. "We feel we're putting our weight behind the right choice for consumers when it comes to the best in high definition home entertainment."

The game industry was once a two-horse race, but Sega and now Microsoft have proven that consumers will support three competing formats. But exclusive games are different than exclusive movies. Gamers have to buy an external HD-DVD drive to watch Transformers or Heroes and use their PS3 to watch Spider-Man 3 and Hostel II. The average consumer is not going to buy both, so in the end, one format will lose. With both camps claiming victories (which are often negated by the other camp), there's no end in sight for this battle. And that's not good for the home entertainment industry or the consumer.

From: http://kotaku.com/gaming/ps3/whos-go...you-318176.php

Any thoughts? I find it odd that every MS Windows PC I have been looking at lately can be fitted with a Blu-Ray Optical Drive.

[silverx2]

the loser is whoever is going to be stuck with a player that cant play the winning side.

Sony is going to lose a crap ton of money either way.

[gerbick]

There's no real reason for either Blu-ray or HD-DVD to exist since the movie studios - aka the suppliers of the visual smack we enjoy - don't even agree. So this is Betamax vs. VHS yet again.

The losers will be the consumer. Having the Blu-ray in the PS3 means nothing. The Sega Dreamcast had the GD-ROM, which was perfect for their solution. It was for entertainment. Sony... once again wishes to set a standard... one that fully doesn't even ****ing work.

The pending change in the profile to Blu-ray 1.1 profile isn't fully supported in their PS3. Also there are other issues... like the Blu-ray Java implementation that breaks each time there's an updated disk put out.

HD-DVD... no better. Less issues, but some issues exist in odd areas... and the players have yet to really show that they can last for a long time. I have DVD players that are ages old... and they can play any DVD I toss at them. Can't say the same for this new generation. I have to update my firmware on either the new generation disc players more than I have to update Windows or OS X just to make the newest movie work. And Sony will continue to try to set new standards that never stick - Betamax, Memory Stick, Memory Stick Pro Duo, Memory Stick Pro, M2 (miniature Memory Stick), UMD, Blu-Ray, Mini-disc, Micro-DV... they just won't stop.

And that's sad.

We're all losers in this game.

[Frets]

I don't understand why they are still disks. If anything hasn't the advent of usb memory shown us a better way? Rather then having a disk that is exposed to the elements and moving parts that are subject to mechanical failure.

[ihoss.com]

I don't understand why they are still disks. If anything hasn't the advent of usb memory shown us a better way? Rather then having a disk that is exposed to the elements and moving parts that are subject to mechanical failure.

Agree. This is the first time we have something competing against disks. There was nothing as big or cheap as CD's, and nothing could compete with DVD's, but this time we have external HardDrives and USB memory, both of which are cheaper than BD and HD-DVD per GB. Either BD/HD-DVD will lose to USB or it will be the last generation of disks.

[lefteyewilly]

i'd have to agree with you frets. Why should we be using disks. Discs are just what's normal to us everyday folk for the past 2 decades.

The geek community changed everything by putting MP3's on static drives and screwed with the music industry as a whole. The movie industry needs some real geeks to change their formats. I'd love to see a change and get away from the huge catalogs that i have now....can't image what my living room would look like if VHS was still in style.

[gerbick]

Because disks last longer than current solid state RAM at lower price points. SD cards, and other things friggin' die on the regular due to read/write on the blocks, what not.

So with that said... that's one good reason against them. Improve the technology, then it'll last longer, and disks might go bye-bye.

[Frets]

http://www.engadget.com/2007/02/27/s...-archival-use/

[hurricaneone]

I can't see memory sticks being as readily accepted among the general user base. Too geeky, as well as people being fed up with yet another format change.

This BR-D and HD-DVD slugfest is a PR nightmare. In fact, it's just brings into focus how little corporations consider the buying public when it comes to launching new product. To benefit buyers, an agreement should have been arranged to use one format or the other, but in the end it was corporate one-upmanship that triumphed.

Also, aside from the risk of picking up equipment that will be potially useless for anything other than a drinks holder in a few months, I wonder if Sony et al have considered the point that the better technology gets, the fewer people will be interested in upgrading their complete system to reap the benefits of that technology.

[Frets]

How big is your 8-track collection?

[hanratty21]

[gerbick]

That man is too happy just to be looking at an 8-bit rendition of Foghat.

[Frets]

He's a fool for the city. da dat daaa
craaaazy fool for the city da dat da.

[hanratty21]

a$$hat that likes foghat.

[hurricaneone]

How big is your 8-track collection?

As big as your broken guitar collection.

[Frets]

All my guitars work. and each one gets at least an hour of playing a week.

[hurricaneone]

You sound like a Mormon servicing his wives.

[jasonsplace]

You sound like a Mormon servicing his wives.

You mean wife? Mormons only have 1.

[hurricaneone]

OK, let's say he sounds like a Polygamist servicing his wives.

[Frets]

They never get jealous when I have a different one in my lap. They never lose there shape. They never have a headache.