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Warner Bros. Announces Shift to Blu-ray Exclusively

Posted on Saturday, January 5, 2008 11:57 AM

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In a surprise announcement yesterday, Warner Bros. Pictures announced that it will be releasing its movies on high definition disc exclusively on the Blu-ray format.

In the press release by Warner Bros. Home Entertainment Group, Barry Meyer, Chairman & CEO, Warner Bros. was quoted as saying:

"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."

You can read some of the many news articles that have been written on the subject:

Warner's decision will be effective the end of May 2008. Until that time, they will produce HD DVD discs for already-announced titles, but their press release implied that such releases may not be day-and-date, which smells of doing as little as possible to fulfill contract obligations.

Previously, Warner was the only major studio to produce movies on both the HD DVD and Blu-ray high definition formats after Paramount and Dreamworks announced in August that they were dropping the Blu-ray format.

The reports I've read had Warner negotiating with 20th Century Fox to go over to the HD DVD side, and if Fox had done so, this news release would have held bad news for the Blu-ray group instead. The HD DVD Promotional Group has cancelled a planned 2-hour event on Sunday in connection with the Consumer Electronics Show in Las Vegas, so one has to wonder if they weren't going to be celebrating a two-fer deal that just disintegrated at the 11th hour.

Where Does That Leave Us?

For those of you interested in where the battle lines are now drawn in this format war, it is truly a situation of exclusive studios vs. exclusive studios among the majors:

HD DVD ExclusiveBlu-ray Exclusive
  • Paramount / Dreamworks
  • Universal
  • Disney
  • Fox
  • Sony Pictures
  • Warner Bros. / New Line

I believe that this announcement signals a massive shift to the Blu-ray side of things. Warner was quite prolific in releasing its titles on the HD DVD format (some of their titles, like Batman Begins, The Matrix trilogy, and Casablanca are not available on Blu-ray yet), and Dreamworks represents very few movies for the HD DVD side (their most notable recent release was Shrek the Third).

The percentage of HD DVD and Blu-ray releases (combined total of about 900 discs) is still very quite small compared to DVD (about 90,000) and the sales of the combined HD formats was also a very small and insignificant percentage compared to DVD. Industry officials and fans alike believe that part of the problem of getting the HD formats off the ground has been the fact that there were two incompatible formats backed exclusively by certain studios. This required consumers to buy players for both formats, or choose one format and lose out on being able to watch movies from the studios on the "other" side.

Warner's move should mark the gradual end of HD DVD as a viable high definition disc format. The Paramount/Dreamwork deal was reportedly going to keep them exclusive to HD DVD until the end of 2008, and while Universal has been a staunch supporter of HD DVD, it's hard to imagine why they wouldn't go neutral and then phase out HD DVD altogether.

Unless the HD DVD group can pull a rabbit out of their hat, the future is Blu-ray.

This news is disheartening for me, as I believed that the HD DVD group had its collective act together, while the Blu-ray group is still trying to find its footing. I have constantly held the position that Blu-ray was a great format on paper, but the companies behind it just couldn't seem to figure out how to launch it successfully. The Playstation 3 game system (which can play Blu-ray movies), continues to represent the best of the Blu-ray players, even though it still has compromises which affect its ability to be worthy of its high price tag. In contrast, HD DVD players played lossless audio and could connect to the Internet from the start, and the higher-end players have features that appeal to higher-end customers while the lower-end players represented a great value for the performance they delivered.

I purchased a second HD DVD player in November, and I gave advice to family members to purchase players as well at a cost of $200 - $250. All these decisions were based on the knowledge that they could find themselves with a player on the eventual losing side of the war, but it still represents money spent on what will probably be a fading technology.

We join the hundreds of thousands of people that have also purchased HD DVD equipment (at last report there were approximately 750,000 players sold). While none of that equipment is useless, and it is still needed to play the movies that have been released on the format (especially those from the still-exclusive studios), it represents a group of people that the Blu-ray camp definitely needs to recruit in order for Blu-ray to become a mainstream success.

That means that the Blu-ray manufacturers need to get off their collective rear-ends and produce players that are functionally equivalent to the HD DVD players that have been produced, and at a competitive price. I'm hoping to see announcements of such products at CES next week.

Essentially, the high definition media format has just been relaunched as a single format.

This "new" format has a limited number of titles available for it, and three major labels are not currently producing movies for it. The well-featured players are expensive (~ $400-$500), and the cheaper players are not worth buying because they lack important features or are unreliable when playing some discs.

Blu-ray and HD DVD's largest competitor was never the other HD format, but rather the standard definition DVD format that the vast majority of consumers enjoy every day. Not only should the Blu-ray camp figure out how to win over HD DVD consumers, but they need to figure out how to get people that are happy with their DVD's to buy into this "new" format they have.

  • What are the differentiating features?
  • How much more are people going to be willing to spend on both players and hardware to get those new features?
  • Where are the high-profile titles?
  • Why are there only a couple hundred movies available?

None of these questions go away now that HD DVD has become less of a factor. If anything, they become more important, because now this "new" format will have to prove itself against the real competitor instead of just comparing itself to the other fledgling format that was up against the same issues.

The Challenge for Blu-ray Manufacturers

We need a Blu-ray player that has Profile 1.1 features now and priced at under $300. Ideally, that player should have an ethernet connection for firmware updates and be upgradeable to Profile 2.0 standards when the discs that have been announced are released.

Sell us something other than a game system that represents a good value and that has a chance at being enhanced in the future.

The Challenge for Blu-ray Studios

It's all about the movies. All new releases must be day-and-date with the DVD releases. Warner needs to do right by consumers by releasing all of its HD DVD-only catalog titles onto Blu-ray.

All studios need to pull out some big guns to get this format going. That means The Lord of the Rings Trilogy -- we know the encoding has been done and it has to be close to being ready. That means the Toy Story movies. Every studio needs to go through its library of Oscar-winning and top box office movies and get going.

Paramount, Dreamworks, and Universal: it's time to see the light and serve your customers. Let's rip the bandage off quickly and get it over with.

If you want this new HD format to succeed, prove it. Show me and other consumers that it's worth buying into. You're going to have to work harder to earn our money.

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