Is the format war really about to be over and if so, what are you going to do?

[Sonnie]

Paramount in HD DVD blow

By Matthew Garrahan and Mariko Sanchanta in Las Vegas

Published: January 8 2008 02:49 in the Financial Times

Paramount is poised to drop its support of HD DVD after Warner Brothers’ recent backing of Sony’s Blu-ray technology, in a move that will sound the death knell of HD DVD and bring the home entertainment format war to a definitive end.

Paramount and DreamWorks Animation, which makes the Shrek films, came out in support of HD DVD last summer, joining General Electric’s Universal Studios as the main backers of the Toshiba format.

However, Paramount, which is owned by Viacom, is understood to have a clause in its contract with the HD DVD camp that would allow it to switch sides in the event of Warner Bros backing Blu-ray, according to people familiar with the situation.

Paramount is set to have a bumper 2008 with several likely blockbusters, including the latest instalment in the Indiana Jones franchise.

Paramount joining the Blu-ray camp would leave HD DVD likely to suffer the same fate as Sony’s now obsolete Betamax video technology, which lost out to VHS in a similar format war in the 1980s.

Warners decision last week to throw its weight behind Blu-ray saw it join Walt Disney, 20th Century Fox and Metro-Goldwyn-Mayer as backers of the Sony format.

The Warners move gives Blu-ray about 70 per cent of Hollywood’s output, although the format’s grip on film content will increase further when Paramount comes aboard.

It is unclear whether DreamWorks Animation has the same get-out clause in its contract with the HD DVD camp.

However, Paramount and DreamWorks have a close relationship, with Paramount distributing DreamWorks Animation films. The two companies also signed their HD DVD contracts at the same time. Meanwhile, Universal has declined to comment on its next-generation DVD plans since the Warners move.

Sir Howard Stringer, chief executive of Sony, on Monday held out an olive branch, saying the company would be “open to dialogue” with the HD DVD camp to “grow the market”. The move came as new figures showed that Blu-ray had opened up a decisive lead over the rival home entertainment format.

Sir Howard said: “We are not going to push people around. We’ll talk to anyone ... we have a lot of work to do to grow the market. We’ll be systematic and open to dialogue at all times.”

He added that Sony still had “a lot of work” to do to get Blu-ray “widely accepted” among American consumers.

“With Warner’s support you saw billboards going up in different places and you saw television commercials getting more and more sophisticated and that’s what we’ll continue doing,” said Sir Howard.

From Times Online

January 8, 2008

Blu-Ray takes inside edge in war with HD-DVD

Up to 20 firms backing HD-DVD consider defection after Warner opted for Blu-Ray and Paramount is poised to follow

Leo Lewis, Asia Business Correspondent

The sprawling consortium of technology and media companies assembled to promote the HD-DVD format of next-generation high definition discs faces a spate of defections to the rival Blu-Ray Disc consortium.

As many as 20 companies currently part of the HD-DVD Promotion Group could be preparing to remove their names from the alliance’s 130-strong membership list, The Times has learned.

Paramount yesterday emerged as the latest major Hollywood studio poised to switch allegiances.

Despite the huge armies of technology companies ranged against each other in the format showdown, Paramount has turned out to be a pivotal figure. Its decision in August to give exclusive backing to HD-DVD was seen as a potentially devastating blow to the prospects of Blu-Ray, and to the strategy of Sony’s president, Sir Howard Stringer.

Sir Howard consistently argued, though, that the Playstation3 games console, which includes a Blu-Ray disc player, would put the format in people’s living rooms around the world more quickly than HD-DVD players would be adopted by consumers. But Paramount, like other members of the HD-DVD group such as Fujitsu, Lenovo and Kenwood, has hedged its bets. It offered exclusivity in August on the basis that it could reverse the decision should Warner Bros switch to Blu-Ray.

The threatened exodus from the HD-DVD format follows last week’s decision by Warner Bros to back the rival Blu-Ray Disc format, whose main technology backers include Sony, Apple and Dell.

One Tokyo-based analyst said that the defections could represent the final nails in the coffin of Toshiba’s HD-DVD standard after a bitterly-fought “format war” that has run for a little over one year.

Eiichi Katayama, of Nomura Securities, said that the battle between the formats, which display films and video games more sharply in an era of ever-growing television screen sizes, was now “entering its final phase”.

Pony Canyon, a major Japanese music, animation and film studio and part of the giant Fuji Television media empire, said that although it was currently part of the HD-DVD Promotion Group, the decisions of US studios meant it would “choose Blu-Ray in the end”.

Several other Japanese firms – including content producers and electronics component makers – said that their support of HD DVD was “under review” and that they knew of many others in the same position. Others, who admitted that they had previously been waiting for “clear market momentum”, said that it had now probably arrived.

Backers of HD-DVD point to the relative ease of producing the discs, and the lower cost of building machines capable of reading them. Unlike previous format wars, particularly the notorious Betamax v VHS skirmish in the 1980s, the war between Blu-Ray and HD-DVD has effectively been decided in boardrooms, rather than electronics showrooms. The decisions of the major studios have come well before those of customers, who have generally held back from picking one format for fear of backing a loser.

Facing a future with only Universal Pictures as its major Hollywood supporter, Toshiba and HD-DVD, said analysts at the Consumer Electronics Show in Las Vegas, could quickly find itself isolated. But HD-DVD does retain a few potential trump-cards, most notably Microsoft. It is the presence of Microsoft on HD-DVD’s list of supporters, say many of the promotion group, that preserves hope that the format could yet prevail.

I kept thinking with the money invested and what could end up costing businesses and consumers dearly, somehow all involved would come to their senses and work things out... that somehow both formats could survive. However, my thinking is always subject to change... and if these reports are in fact accurate, it really does look like the format war is about to be over.

I suppose all we can hope for now is that the consumers that lose out financially will somehow be compensated and not end up getting gouged by the powers to be (Sony). Those 10's of thousands of consumers who rushed out and bought HD-DVD players at x-mas time are going to have a poor attitude towards hi-def in general. It may be a long time before anyone ever gets them to invest in another HD player, especially when we will not likely see anymore HD players under $200 for a while to come and movie prices will probably ease back up.

Now I'm even on the fence as to whether to cancel my order on the Samsung BD-UP5000 dual format player and try to snag a 1400 before those prices go back up. People just thought things were confusing... I'm confused now for sure...

[muzz]

First off, I will say up front that I am an HD DVD supporter, I do not support Sony, or the BD camp in any way, because since day 1 they have been gouging the general public.

Sony has been doing that for years, and has always tried to build a monopoly.

I tend to spend much more time and $ on stuff like this than Joe Public does, so when I jumped on HD DVD, it was because the format seemed to make more sense to everyone involved.
The customer got great entertainment for the Dollar, as good as BD.

The Price it costs to first buy all new Eqpt to burn BD, for the masses, and the discs themselves are more expensive for the studios, giving me reason to think that they would prefer to use HD DVD instead.. this all go's back to my first point about the cash, if it cost's more to produce, what are the chances that it'll cost less to the consumer? Thanks to HD DVD, BD prices are the same, and lower than the "Combo's" which I've always detested.

Manufacturers of the Boutique brands sided with Sony, probably because they can gouge more outta your pockets, this is partly because Sony had more studio backing, so Toshiba went to cheaper to buy hardware. From what I understand, it costs more $ to produce a BD Player, maybe I'm mistaken.

IMO the masses got the shaft here.

I've seen some fairly well known folks state that they are glad that FINALLY one format won, so we can move on, to help Joe Public decide and push HDM.... what is he gonna decide, that BD is stupidly expensive, thats what... stalling the HD market even longer.

I don't see this as a good thing for the consumer AT ALL, if it wasn't for HD DVD, Sony would probably still be using Mpeg2, on profile 1.0, with prices still as stupidly expensive as when they first came out.

Average price is STILL way to high for the general public to care, and with no competition folks seem to think that Sony and the Cronies will lower prices...

I'll believe it when I see it..

As far as " Sir" Howard Stringer goes-
Yeah, sure Howie, you've always been open to dialogue...and I'm a Mutli-Billionaire !!!

Grow the Market? What?

Who calls themselves "Sir" anyways... Royalty that's who...
Bah

Sad situation really.

[tcarcio]

I also support HD DVD and really only did so because of the arrogance of Sony and blu ray supporters that I met on some other forums. But I think it will be very hard to keep HD going unless Toshiba comes up with something soon. If Microsoft would put an HD DVD drive in the XBOX that would be huge,IMO. Also,Sonny, That article about Paramount was just opinion based and Paramount came out earlier today and said it was untrue and they plan on backing HD DVD for some time to come.

[Sonnie]

Paramount Denies Report It Will Drop Toshiba's HD DVD

By Andy Fixmer and John Liu

Jan. 8 (Bloomberg) -- Viacom Inc.'s Paramount Pictures denied a newspaper report that the studio is poised to follow Time Warner Inc. in abandoning Toshiba Corp.'s HD DVD technology.

``Paramount's current plan is to continue to support the HD DVD format,'' Brenda Ciccone, a spokeswoman for Paramount, said in an e-mail today.

Toshiba, the leading promoter of the HD DVD format for high- definition video discs, fell in Tokyo trading after the Financial Times reported Paramount is poised to adopt Sony Corp.'s Blu-ray format instead.

Paramount can defect because a clause in its contract with the HD DVD camp allows the studio to switch to Blu-ray if Warner Bros. Entertainment Inc. dropped its support of Toshiba's standard, the newspaper reported today, citing unidentified people familiar with the plan. Warner Bros. said on Jan. 4 it would drop its support of HD DVD.

Keisuke Ohmori, a spokesman for Tokyo-based Toshiba, said the report is speculative. Masayo Endo, a spokeswoman for Sony, declined to comment on the report.

Maybe I'll just stick with the 5000 order and hope for the best. I don't have room for two players and I hate to give up the ability to watch my small collection of HD-DVD in my HT room.

[tonyvdb]

even after reading all the posts above I still dont think HD DVD is done. I do think that the format will go away slowly but for the next year or two at least we will still see movies come out in the HD DVD format.

[Richard W. Haines]

Trades announced that Paramount backed out. That leaves Universal which is linked with Toshiba
but the format war is over and Blu-ray won. Perhaps some day we'll find out the corporate politics
behind the scenes and what really happened. If you spent money on a new HD DVD player, you
got burned as I did. I should've bought the $100 machine instead of the $500 one. Then I wouldn't
feel so cheated.

[mike c]

i bought the 500 dollar player and watched ONE movie. that sucks. but it was transformers

[Richard W. Haines]

I guess look for the remaining HD DVD discs at giveaway prices over the next couple of months. I'll try to
grab "Adventures of Robin Hood", "Under Siege", "Blazing Saddles" and the "Star Trek" TV series
when that happens. I was able to watch a number of the HD DVD titles and they looked and
sounded great including "2001", "Mutiny on the Bounty", "Trading Places", "Superman", "Animal
House" and "Willy Wonka". So I'll use the machine until it dies since it upscales Standard DVDs
nicely although when there was a glitch on the "Rockford Files" disc it wouldn't play it and I
had to switch to the Samsung player which will play anything. I'll wait until there's a decent
selection of Blu-ray discs out there that I actually want to own before purchasing a player.
Right now the selection is so small it's not worth the investment. Let's see what the studios
plan for release in the future since all of the old lists are now obsolete. I was looking forward
to the proposed Warner HD DVD discs of "The Music Man" and "North by Northwest" which will
hopefully now be released on Blu-ray in the near future. Both were filmed on similar large format
negatives (35mm horizontal negative with an eight sprocket image) and should look very sharp in high definition. It will also give me time to recover from getting ripped off on the Toshiba player.
Not really Toshiba's fault but certainly the industry's fault for not standardizing HD before it's
introduction to protect consumers although I doubt whether that is a concern for most studios.

[atledreier]

Truly a sad day. Let's just hope HD-DVD can find a way to survive. Although it's douptful...

[MrPorterhouse]

This has been a very, very interesting week, that's for sure. Lots and lots of internet news, rumors, speculation, and facts. The outpouring of news from CES 2008 is not over yet, either.

You know, back in 2006 before the launch of either format, I took a hard look at the likely scenarios for both formats. Mostly I looked at them from the CE's and Studios perspective because I knew that the consumers interests were not really a factor. It seemed Blu-ray would have a major advantage of both CE support(hardware companies) and studio support(movies). Cost and consumer friendliness had a lean towards HD DVD. Despite the cost model which drives most average Joe's, I saw Blu-ray as having a strong advantage to survive(not necessarily beat HD DVD, but at least co-exist with HD DVD). I did not see HD DVD as a wise purchase for myself(it would be a good choice for those who have to have Universal movies in HD), so I took the sacrifice of not being able to watch Universal movies in HD, and bought a PS3. A PS3 would allow me to play Blu-rays, but it would also not be a total waste of a purchase if BD were to fail because the PS3 could play games, serve a media hub for music, videos, and photos. It was a safeguard for me that I told myself, I won't buy a standalone until the format war has come to a conclusion and player specs and prices have met my needs, which I thought back in 2006 might happen in 2008 or 2009. It looks like everything is on pace with my original thinking, but you just don't know. I think the HD DVD can't afford the payoffs anymore, while the BDA certainly has a lot of cash. Unless Microsoft were to step in and help HD DVD, then HD DVD is going to fade away.

[Bob_99]

Having gone through the VHS-Betamax competition, none of this comes as a surprise to me. What amazes me a bit is that consumers still bite on these dualing formats issues. New technology is always very tempting and fun to play with, but it is us who need to look at these things and say no until a single standard is accepted and I just don't see that happening. I agree with the concerns that lack of competition leads to higher prices on both the players and the DVDs, especially if Sony has its way.

Bob

[wbassett]

tcarcio wrote:

I also support HD DVD and really only did so because of the arrogance of Sony and blu ray supporters that I met on some other forums. But I think it will be very hard to keep HD going unless Toshiba comes up with something soon. If Microsoft would put an HD DVD drive in the XBOX that would be huge,IMO. Also,Sonny, That article about Paramount was just opinion based and Paramount came out earlier today and said it was untrue and they plan on backing HD DVD for some time to come.

This was a shock to the HD DVD community.

I talked to my brother yesterday about the recent events. He too is format neutral but said he's done... he said he won't buy another HD DVD because, his words, "It's over".

I honestly can't see anything Toshiba can do at this point. Short of a miracle, what can they do? I'll preface this by saying this is my opinion so nobody reads into this as anything other than that...

The one thing Toshiba could do is slash player prices again and get the A3 to $100. The problems with that are first consumers that are watching this unfold most likely are going to see that as dumping their inventory. It could get some unaware consumers to buy, but then you have the stores, are they going to even continue carrying the players? As it is right now a lot of places (that I've been to) don't carry the players right now anyway. Best Buy and Circuit City of course do, but my local Walmart and Target don't. My local Sams is BD exclusive already, so no players there and doubtful there ever will be now. So that's the first problem and hurdle Toshiba would have to jump... convincing not only consumers it's not a dead format and just and inventory dump, but also to convince stores to stock the players. I think whatever is in stock is what will be sold and stores not carrying HD DVD players already most likely aren't going to be interested in them at all now.

The 'miracle' would be everyone coming out and saying they will release on both formats, or a major studio (or two) announcing they are leaving Bluray for HD DVD, and I just don't see either of those things happening. Again, that's just my opinion and thoughts.

I do wonder what will be done for those people that bought HD DVD players over Christmas, I suspect nothing because the manufacturers will say it's not their problem or fault. I honestly don't see any re-embursement programs being done, why would Sony or Toshiba? I know a few pretty upset people right now, and some are talking about returning players.

So what do we do? As much as people don't like this situation or want to hear this, the only thing we can do is accept it unless something really major happens. Right now that doesn't seem very realistic though. Here is what I personally am going to do... The players I have upconvert very well so I am happy there. Not so happy that new content most likely won't be available now, but there are still are a ton of movies on HD DVD that I don't have and if this truly is the 'end', they should start dropping in price soon. I'll buy them even though it's a dead format if the price is right. I'll just have to accept that if there is anything new coming out I want I have to buy it on BD.

My friend is up visiting and he said we (as in us on these forums) are in a niche and more aware and sensitive to technology and events like this. He on the other hand said he's glad it's over (if it is) and also said most average consumers won't even realize what happened because they don't follow things as close as we do. So when they finally decide to get a player, it will be what brand of BD player not what format to think about.

Toshiba says HD DVD isn't dead yet, and as we've seen in the past year it's been a wild ride at times, but this is major. Even so, I think we should also wait to hear what Toshiba is going to say. They have to respond soon so let's wait to hear what they say before calling it officially dead- mortally wounded maybe...

[Mitch G]

I think HD-DVD is dying.
And, I was wrong. I figured that Blu-Ray would win only if they could figure out how to slash prices of the players to be comparable (or better) than HD-DVD player prices (i.e. ~$200 or less). So, how did Blu win without the cheap player?

I'll give some credit to the Sony marketing machine. They really are good at marketing. Over the past month, I've received two direct mailers - one about PS3 and one about "HDNA" that are quite impressive.

But, I think the main "problem" is that the studios don't count rentals. I would not be surprised if more HD-DVDs are rented than Blu-Ray simply because I think the HD-DVD demographic is more frugal than the Blu-Ray demographic. Thus, HD-DVD folks rent while Blu-Ray folks buy. (Massive generalization, I know, but this is the web and so I'm allowed to speculate all I want. )
I also think that same Blu demographic that bought PS3s to play games are going to stores to buy a game but come home with a Blu Ray disc because there are no games to buy.

Personally, I would like to see services like VuDu just kick it into gear and offer lots of HD offerings. Then I could justify getting a VuDu box. "Look, Hon. You just download movies and go! Neat, huh?"

Right now, I can't justify replacing (or adding to) my 6 month old HD-DVD player.
"Look Hon! We have another DVD player!" Yeah, that just won't fly.



Mitch

[tonyvdb]

Mitch G wrote:

So, how did Blu win without the cheap player?

I'll give some credit to the Sony marketing machine. They really are good at marketing. Over the past month

Having Disney on the BluRay side is a huge boost for that side of the camp in my opinion. There are allot of families with kids that have been early adopters of HD and Disney clearly has that market with buying Pixar and all the other family friendly movies.

[Mitch G]

tonyvdb wrote:

Having Disney on the BluRay side is a huge boost for that side of the camp in my opinion. There are allot of families with kids that have been early adopters of HD and Disney clearly has that market with buying Pixar and all the other family friendly movies.

See, I never saw the Disney backing of Blu Ray as a critical advantage. The only Disney movies I really like these days are the Pixar movies and they already look quite good on SD DVD. So, I never felt like I was going to be missing out on too much not seeing them in HD. And, Disney has only recently started releasing movies in Blu-Ray. But, you're probably right, if all other things are equal, then having Disney in one camp helps that camp.


Mitch

[MrPorterhouse]

Mitch G wrote:

See, I never saw the Disney backing of Blu Ray as a critical advantage. The only Disney movies I really like these days are the Pixar movies and they already look quite good on SD DVD. So, I never felt like I was going to be missing out on too much not seeing them in HD.
Mitch

Yeah, I thought so too......until I saw CARS or Ratatouille on Blu-ray. Talk about total 3D immersion. WOW! Animation has NEVER looked this good. And then there's the sound. My OH My does it sound amazing. The depth, clarity, and resolution is through the roof. I also hear that Finding Nemo is getting a completely re-designed audio in the form of a New 7.1 Home Theater Mix. I can't wait for this title.

[tonyvdb]

I fully agree with you, I have the SD version of Cars and the BluRay version is a huge step better than the SD. I honestly was not expecting the difference to be that much.

[John Simpson]

Watch the Blu-ray reviews, though. By all accounts, the Blu-ray disc of "Fifth Element" is worse than the DVD version. Something to do with a really crappy video transfer...

I also doubt there's much improvement in some of the older movies, especially the pre-Dolby Digital ones.

On the plus side, watch the opening credits of "Casino Royale" and you think you're in HD heaven

[MacDad2]

It will be interesting to see what happens this year.. right now it appears a potential death blow has occured, but never count out a partner of Microsoft. Microsoft spends $6B to $7Billion a year on R&D and they can afford to underwrite infant/early adopter technology like HD players and lure back media kings.

Initially I was ticked off reading the story late last week as I have ~ 65 HD DVD discs, and in fact bought my relatives HD-DVD players for X-Mas.

I will also speculate that the media / studios are in a bit of a panic right now as they are becoming more reliant on DVD sales due to fact that cinema tickets did not grow in 2007 as what they expected. It might have helped if they put out a few more blockbusters.

Chris