Warner Bros. backs Blu-rayStudio to support Sony high-def format Warner Bros. will throw all its weight behind Blu-ray later this year, a decision that could serve as a death blow to the rival HD DVD format.
Warner Bros. Studio, which had hinted it might drop one format after the holidays, said it decided to back Blu-ray to try and reduce confusion brought on by the high-def format war and better drive mainstream adoption. Warner made the decision heading into the annual Consumer Electronics Show confab in Las Vegas, where it had been skedded to participate in activities promoting the rival HD DVD format on Sunday evening.
Warner's move leaves only Paramount and Universal squarely in the HD DVD camp. Sony, Fox, Disney and Lionsgate all back Blu-ray.
Warner sister company New Line confirmed it will shift allegiance to Blu-ray only as well.Warner has been the sole major backing both formats since late this summer, when Paramount dropped Blu-ray in favor of HD DVD, due in part to marketing incentives proffered by Toshiba and belief HD DVD's lower cost would drive greater mainstream adoption.
However, hardware manufacturers for both sides offered sizable discounts for players during the holidays, reducing the price gap between the two formats. And studios did their part to dangle promotional incentives on the software side.
Yet Warner found that consumers still hesitated to dip their toes into the high-def waters due to confusion over the dueling formats.
"The price impediment was going away, but the take up wasn't increasing that much," said Warner Home Entertainment topper Kevin Tsujihara. "The research was making it pretty clear there was still a tremendous amount of confusion among consumers."
Supporting both formats came with a cost for the studio, which had to maintain dual inventories for their releases. And while the studio had some of the best sellers on high-def when both formats were added together, they couldn't help but wonder whether dual support was helping, or hurting, the transition to a next-gen format.
"By us being both, we were playing into consumer confusion," Tsujihara said. "There's a window of opportunity with first time buyers of HD TVs to also buy a high-def player at the same time."
"The window of opportunity for high-definition DVD could be missed if format confusion continues to linger," Warner Bros. chairman and CEO Barry Meyer seconded.
However, the studio insists that cost was not the underlying motivation for the shift. Paramount drew a lot of flak for taking Toshiba incentives, said to be $150 million, to exclusively back HD DVD.
"This was not a bidding war," Tsujihara said.
He pointed out that worldwide the DVD biz brings in $42 billion annually and his studio draws the greatest portion of that as market share leader.
"That amount far dwarfs any financial incentives," he said.
And indeed, Paramount has maintained that it backed HD DVD because it was generally lower priced and therefore had a greater chance of mass adoption.
Warners' Blu-ray shift has been rumored for some time, but the studio insisted it would wait to see how both formats fared during the crucial holiday sales period before backing one format exclusively. Indeed, late in the fourth quarter, the studio ran full page newspaper ads touting HD DVD benefits on one side and Blu-ray on the other. During this point, homevid topper Ron Sanders talked openly of the need to move beyond the format war and convince consumers of the benefits of high-def (Variety, Dec. 17-23).
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.
Warner's shift toward Blu-ray is expected to hasten the demise of HD DVD. Victory would give Sony a long awaited triumph after Betamax lost the videocassette war to VHS.
Variety.com
