Re: !!!!!!!!!!!! BLU-RAY WINS - WARNER BROS. GOES EXCLUSIVE-sorry if repost!!!!!!!!!!
Format war reworks 1980s video fight
Published: January 6 2008 19:15 | Last updated: January 6 2008 19:15
In Hollywood, history has a habit of repeating itself, often to the great annoyance of audiences, with stories and plots recycled and retold.
But that phenomenon is not limited to what happens in front of the camera. The race to succeed the DVD between Blu-ray, backed by Sony, and HD-DVD, backed by Toshiba and Microsoft, mirrors the VHS-Betamax format war of the 1980s. Then, individual film studios also grappled with rival technologies in the hope one would dominate home entertainment.
In the mid-1980s, VHS eventually triumphed over the Sony-backed Betamax after securing enough studio backing. This time, though, Sony has made sure history has not been repeated and looks to have won the latest format war by securing support from Warner Brothers.
When VHS triumphed over Betamax, the victory inspired a surge in consumer spending on home video, forming a lucrative fresh revenue stream for Hollywood.
Studio bosses hope Warner Brothers’ decision to back Blu-ray last week will ensure the same result by providing a similar catalyst for their home entertainment businesses.
With DVD sales growth stalling, studios have been anxiously waiting for another format to sell, allowing them to generate more income from new titles and to exploit their film libraries.
Warner produces more DVDs than any other studio and has the largest film library in Hollywood, which is likely to make its support the critical factor in deciding the outcome of the format war. Its backing of Blu-ray on the eve of the Consumer Electronics Show in Las Vegas gives the Sony format about 70 per cent of Hollywood’s output.
Warner joins Sony Pictures Entertainment, Walt Disney, 20th Century Fox and Metro-Goldwyn Mayer in the Blu-ray camp. Universal, Paramount and DreamWorks Animation are the studios backing HD-DVD.
Some analysts have criticised Warner, the biggest player in the $42bn home video market, for not acting sooner. “If Warner had decided this six to nine months ago, next-generation DVD could have had a meaningful impact on the 2007 holiday season,” Richard Greenfield, an analyst at Pali Capital, wrote to clients.
However, Barry Meyer, the studio’s chairman, said maintaining support for both products was crucial in order to lower prices for consumers.
As they made their decision, Warner executives were particularly mindful of the international market. The studio has one of the industry’s most powerful overseas distribution networks, which it has emphasised as a vital source of growth. While Blu-ray disc sales had opened only a modest lead over HD-DVD in the US, the advantage had swung to a wide margin elsewhere.
In the UK and France, for example, Blu-ray discs accounted for 75 per cent of the market. In Japan, that was more than 90 per cent.
The studio’s switch means the outlook is gloomy for the studios that have championed HD-DVD. Universal, owned by General Electric, has been the format’s biggest champion but it was keeping tight-lipped yesterday about its next move.
It was also unclear yesterday whether the other studios backing HD-DVD would change sides, although it is understood Paramount has reserved the right to switch its backing to Blu-ray.
Warner’s decision caught the HD-DVD camp unawares and left Microsoft, Toshiba and the other companies backing the format in disarray about what to do next. A party and press conference scheduled to promote HD-DVD at CES have both been cancelled after Warner’s announcement.
The outlook for HD-DVD was much more promising before Christmas. Wal-Mart sold as many as 90,000 players in a single day in late November after dropping the price on an early Toshiba model to $99. But Blu-ray proved more popular. Blu-ray discs outsold HD-DVDs by a ratio of two-to-one before Christmas and by the end of 2007 there were 4m Blu-ray capable players in north America, compared with about 750,000 HD-DVD machines.
A Blu-ray spokesman said: “A single format will provide the best entertainment experience for the consumer.”
http://www.ft.com/cms/s/8d56c2a8-bc...f2-ba1c-11dc-abcb-0000779fd2ac,print=yes.html