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HDTV Conference Provides No Easy Solutions for High-Def

10 Oct, 2007 By: Chris Tribbey

Russ Crupnick, VP and senior analyst for The NPD Group, is disappointed.

“I was hoping to win the Nobel Peace Prize for solving the format war,” he said after hosting a high-def format panel Oct. 10 at the 5th Annual HDTV Conference in Universal City, Calif. “That's apparently not going to happen today.”

In another contentious roundtable, representatives of both the Blu-ray Disc and HD DVD groups sparred over which was better to supplant DVD, while a representative of Warner Bros. took the middle ground.

“What we find people are excited about isn't interactivity,” said Andy Parsons, SVP of new product development and technical support for Pioneer Electronics, and chairman of the Blu-ray Disc Association's U.S. Promotion Committee. “[They buy high-def] because they want to see high-definition. “… Blu-ray titles are consistently outselling HD [DVD] 2-to-1. Yes, interactivity is nice, but it isn't causing anyone to not watch 300 on Blu-ray.”

The comments about high-def interactivity, something HD DVD representatives say they have an advantage over Blu-ray on, earned a series of responses from HD DVD reps.

“Each of these formats provide great picture and sound,” said Alan Bell, EVP and chief technology officer for Paramount Pictures. “But we need to sell more than that.”

Bell said Paramount, which went HD DVD exclusive in August, made its decision because HD DVD is “the best consumer proposition,” and production of HD DVD is easier and quicker than Blu-ray.

But Don Eklund, EVP of advanced technologies for Sony Pictures Home Entertainment, said HD DVD will lose because it's still just a DVD technology. “Blu-ray is a format. It's not just a movie delivery system,” he said, pointing to Blu-ray recording and camera devices.

Price and game consoles

Kevin Collins, Microsoft's director of HD DVD evangelism, said the key to the war will be which side wins the dedicated set-top box battle. And with a $199 HD DVD player expected soon, half the price of the cheapest Blu-ray player, the PlayStation 3, Collins said HD DVD has the advantage.

Parsons disagreed.

“I think it's erroneous to say think a cheap player is … going to cause a format to take off,” he said, adding that while the PS3 is primarily a gaming system, it is being used often for Blu-ray movies. “What ultimately causes a format to take off … is it's still about the content.”

After Collins pointed out that Microsoft's Xbox 360 has an HD DVD add-on, and said it was outselling Blu-ray set-tops boxes, Patrick Fitzgerald, EVP of worldwide sales, distribution, and trade marketing for Walt Disney Studios Home Entertainment, downplayed the rival next-generation gaming console.

“I wouldn't throw PS3 and the Xbox 360 in the same sentence,” he said. “PS3 has a built-in [Blu-ray] drive … and they're not selling many of those [HD DVD drives].”

Dan Silverberg, VP of high definition media development for Warner Bros., calmed both sides by saying 300 was marketed heavily to PS3 owners, but “it's dangerous to just rely on gamers. To be reliant on them is something I don't think either camps wants to do.”

Hardware specs and region coding

Warner Bros. has roughly 160 titles out on both formats, and Silverberg said 5 million high-def units have been sold, most of those new releases, despite 78% of high-def titles being catalogue. That makes it important for all studios to do day-and-date high-def releases with DVD, he said. After all, high-def is supposed to replace DVD.

“If you don't do day-and-date the consumer isn't going to wait around,” he said. “When people went from VHS to DVD, they didn't go back. One of our challenges is how do we get the consumer to upgrade everything.”

Warner has held off on releasing some titles on Blu-ray that are out on HD DVD, until Blu-ray hardware specs become unified and can universally support the same features. That's something Microsoft's Collins said HD DVD has over Blu-ray.

New Line has announced two new titles, Hairspray and Rush Hour 3, for both formats, but the HD DVD won't come until weeks after Blu-ray because of the lack of region coding on HD DVD and overseas theatrical arrangements for the films.

“One of the subtle benefits of HD DVD, and it's not that popular with the studios, is it has no region coding,” Collins said, adding he buys 20th Century Fox and Disney films available on HD DVD overseas.

Low adoption rates … for now

One thing everyone could agree on: high-def adoption by consumers is at a snail's pace right now. A new SNL Kagen study shows only $42.4 million was spent on high-def at retail in 2006, compared to $24.2 billion on the rest of home media. But while SNL Kagen expects only a 3.5% revenue jump in high-def in 2007, by 2016 the firm forecasts high-def accounting for 76.5% of home media spending.

The NPD Group expects more than 83 million households will be high-def enabled by 2011, but for the short term things look bleak: Only 11% of consumers surveyed said they planned on buying a high-def set-top box in the next six months. That same survey shows 90% of non-high-def owners are holding off because they're satisfied with DVD, while 10% said they were holding off because of the lack of content available.

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