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HD DVD Backers Counting on Q4

7 Aug, 2006 By: Jessica Wolf

HD DVD backers are banking on the fourth quarter.

Already, there are “tens of thousands” of HD DVD players in homes across America, said a panel of format supporters from Paramount Home Entertainment, New Line Home Entertainment, Universal Studios Home Entertainment and Warner Home Video, at the Entertainment Media Expo held Monday in Universal City, Calif.

“We're still projecting Q4 to be a very vibrant business for hardware and software,” said Steve Nickerson, SVP of WHV. “There are as many consumer electronics HD DVD players in the market as there were standard-definition DVD players at the end of 1997.”

The wild cards, Nickerson said, are Xbox and HD DVD-enabled computers.

“We can build a business models around CE players alone,” he said.

Between HD DVD's main backers, there will be as many as 150 HD DVD titles on store shelves by the end of the year. Warner, which has 21 titles already out, will release anywhere from 35 to 50 additional titles, according to Nickerson.

Universal, which is only supporting HD DVD, will have a 60-title slate by the fourth quarter, said Ken Graffeo, EVP of USHE.

Paramount, which is backing both HD DVD and its rival format, Blu-ray Disc, currently has seven HD DVD titles available, with three more streeting Aug. 8.

“We'll probably double that by year's end,” said Alex Carloss, EVP of worldwide marketing and entertainment for Paramount. That will include a HD DVD edition of Mission: Impossible III with a wealth of bonus features, Carloss said.

New Line, another dual-format supporter, has yet to announce specific releases, and likely won't until studios see how well the fourth quarter plays out, according to Matt Lasorsa, EVP of marketing.

“It will be as early in 2007 as possible,” Lasorsa said. “We don't have the depth or breadth of the other studios, so we want to wait until there's more player penetration.”

After that, New Line will start with day-and-date releases, adding “strong catalog titles, such as Blade and Seven, soon after” Lasorsa said.

On the hardware side, there's a small but growing sample of HD DVD-enabled homes, numbering in the tens of thousands, backers said, though they declined to give specific sales figures.

The lower-priced Toshiba HD DVD player — at $500 — is outselling the “step-up” version — at $1,000 — by 5-to-1. But that ratio is largely attributed to the fact that the pricier model has a much more limited distribution, said Jodi Sally, VP of digital and AV marketing for Toshiba.

So far, backers are judging the success of HD DVD's “soft launch” — now four months in — by consumer reaction more than by return on investment, panelists said.

The hardware adoption is about as expected, Graffeo said. But the reaction, appreciation and approval studios are hearing from key consumers is better than expected.

“They really do see the difference,” Graffeo said. “That's what's exceeded our expectations.”

Studios have big plan for the interactivity and connectivity HD DVD allows. The fourth quarter will inform those plans, too.

Universal has taken several different approaches to its HD DVD “in-movie experiences” and are watching closely to see how consumers respond to each, Graffeo said.

The ability to leverage all the HD interactivity is getting better by the day, Carloss said. The next step is balancing that with what consumers want.

“The fourth quarter will take those learnings and apply them to '07 releases,” he said.

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