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High-Def Deal at Critical Juncture

5 Jul, 2005 By: Kurt Indvik

At last week's Fourth Annual Home Entertainment Summit: DVD Magic 8, I posed some questions regarding the format battle between Blu-ray Disc and HD DVD to a panel of studio home video division presidents and was met with thundering silence. Thomas F. Lesinski, president of worldwide home entertainment for Paramount Pictures, pretty much spoke for the group when he said he didn't feel that talking publicly about the standoff at this point was productive.

At last year's conference, when Toshiba (HD DVD) and Sony (Blu-ray Disc) and their supporting hardware partners squared off, this same presidents panel spoke up about the need for a unified format as critical for the success of any launch of next-generation, high-definition packaged media. But beginning last fall when both formats were still at odds, most of the studios aligned themselves with one format or the other, perhaps in an attempt to tilt the momentum toward unification. Today, studio execs continue to call for a unified standard, but studio support between the formats is essentially split.

The awkward silence on the part of the studio heads last week also speaks volumes about the critical point at which we find ourselves. There appears to be little room for a compromise from a technical standpoint without significantly undermining key benefits each side says its format brings to the table, analysts say. And while there is always room for a financial arrangement to suit both sides, there is the intangible matter of corporate pride.

Though Sony Consumer Entertainment president Ken Kutaragi pronounced negotiations between the two formats dead as late as June 20 (after earlier talks had collapsed in mid-May), both corporate giants underwent key leadership changes at the end of last month. There is some hope that new top management teams led by Sony's new chairman, Howard Stringer, and Toshiba's new chairman, Tadashi Okamura, may find a way back to the bargaining table.

We should know soon what's to come from what are likely the last-ditch efforts in Japan to make a unified format a reality. The talking, as was evident at last week's conference, is just about over. The next step is a big one.

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