The ongoing DVD format war between Blu-Ray and HD-DVD took a major development this weekend when it was announced that Warner Bros would be signing an exclusive deal with Blu-Ray.
So far, WB has been the only major studio to release its discs on both formats, but it seems that they have gone with Blu-Ray over concerns that the format war will damage the long term prospects of high-definition DVD and because Blu-ray has outsold HD-DVD so far.
Whatever the outcome it is a massive blow for the HD-DVD camp.
Here is WB’s official press release:
In response to consumer demand, Warner Bros. Entertainment will release its high-definition DVD titles exclusively in the Blu-ray disc format beginning later this year, it was announced today by Barry Meyer, Chairman & CEO, Warner Bros. and Kevin Tsujihara, President, Warner Bros. Home Entertainment Group.
“Warner Bros.’ move to exclusively release in the Blu-ray disc format is a strategic decision focused on the long term and the most direct way to give consumers what they want,” said Meyer.
“The window of opportunity for high-definition DVD could be missed if format confusion continues to linger. We believe that exclusively distributing in Blu-ray will further the potential for mass market success and ultimately benefit retailers, producers, and most importantly, consumers.”
Warner Home Video will continue to release its titles in standard DVD format and Blu-ray. After a short window following their standard DVD and Blu-ray releases, all new titles will continue to be released in HD DVD until the end of May 2008.
“Warner Bros. has produced in both high-definition formats in an effort to provide consumer choice, foster mainstream adoption and drive down hardware prices,” said Jeff Bewkes, President and Chief Executive Officer, Time Warner Inc., the parent company of Warner Bros. Entertainment.
“Today’s decision by Warner Bros. to distribute in a single format comes at the right time and is the best decision both for consumers and Time Warner.”
“A two-format landscape has led to consumer confusion and indifference toward high definition, which has kept the technology from reaching mass adoption and becoming the important revenue stream that it can be for the industry,” said Tsujihara.
“Consumers have clearly chosen Blu-ray, and we believe that recognizing this preference is the right step in making this great home entertainment experience accessible to the widest possible audience.
Warner Bros. has worked very closely with the Toshiba Corporation in promoting high definition media and we have enormous respect for their efforts. We look forward to working with them on other projects in the future.”
Variety report that the HD-DVD camp were surprised by the announcement:
Warner’s timing apparently took the HD DVD camp by surprise, however. Thursday afternoon, shortly before Warner said it notified Toshiba of the decision, HD DVD backers were paying media calls.
The North American HD DVD Promo Group cancelled its Sunday CES confab after Warner’s went public with the decision Friday afternoon.
Nikki Finke reports that Blu-ray was chosen because it can grow and evolve as a format:
I’d been hearing rumors for months that Warner Bros had been offered in the neighborhood of $250 million for “promotional consideration” to go exclusively with HD-DVD.
Less lavish but still big payments already had been offered and accepted by the HD DVD side to both Paramount (I was told $50 million) and DreamWorks Animation (I was told $100 million) for “promotional consideration”. (And yet director Michael Bay, whose Transformers was a big lure in HD-DVD, still is flip-flopping by publicly questioning the wisdom of choosing that format over Blu-ray.)
A source for another studio in the Blu-ray camp explains the Warner Bros decision to me as a “marketplace realization”. “Their decision creates overwhelming momentum for Blu-ray as the only format that could possibly win in this battle. HD DVD is as good now as it will ever be. Blu-ray will continue to grow and evolve.”
I spoke to a number of different people over the holiday season about how they felt about hi-def DVDs. Unless they were gamers who had an Xbox 360 or PS3 (the former plays HD-DVDs and the latters plays Blu-ray), they tended to be cautious.
Firstly, there was concern about which format would triumph as you don’t want to invest in something that will be redundant in a couple of years.
Secondly, you need a hi-def TV and DVD player in order to play high-def DVDs. It might sound obvious but given that most people don’t have these essential pieces of equipment, it is a large outlay for consumers to make.
Finally, the uncomfortable truth for the entertainment industry is that the jump to high-def DVDs is just not as attractive as the move from VHS to DVD. Ten years ago DVDs offered a vastly improved experience and you only needed a player, rather than a player and a TV.
For high-def to really catch on, not only does the format war have to end but equipment costs have to come down dramatically.
Consumers have invested a lot of money in building their DVD libraries over the last few years. Just how soon will the average viewer make the jump to high-def?
I think it will take longer than the entertainment industry expects.