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Low Tidings for High-Def

1 Sep, 2005 By: Erik Gruenwedel



LOS ANGELES — More challenges to the rollout of high-definition discs emerged at the International Recording Media Association's annual Entertainment Media Expo (EMX), held here this week.

Meanwhile, Toshiba Corp., backer of HD DVD, has reportedly announced it may postpone a planned fourth-quarter debut of its HD DVD player until 2006. The company was in discussions with Hollywood studios and major retailers to determine an ideal launch date, according to news reports. A spokesperson was not immediately available for comment.

The retail opportunities for a high-def disc could be lost forever unless a unified format is brought to market no later than the fourth quarter of 2006, said Understanding & Solutions analyst Jim Bottoms during the conference. The urgency to bring Blu-ray Disc or HD DVD — but not both — to market represents a “no-brainer” solution to the softening DVD business, he said.

“There has to be one format ready by that time,” Bottoms said. “If we see competing formats coming to market and encourage consumers to delay adoption and look elsewhere, packaged media will suffer irreparable harm.”

Bottoms and other EMX panelists reiterated concerns that repeated delays in the launch of a unified high-def format would play into the hands of the broadcast, cable and satellite industries, which already have established high-definition momentum among content holders.

“Studios get 15 percent of their revenue from broadcast and video-on-demand, and increasingly look at electronic distribution,” Bottoms said. “[However], packaging entertainment on a piece of plastic remains the most effective, cost-efficient means of distribution.”

Panelists representing creative and replication concerns said information technology, including compressed time frames, video and audio codecs and related costs, have created a litany of challenges before a high-def disc ever reaches the market.

Experts said issues of melding hybrid content (standard and high-def) on one disc, CGI animation and multiple layers of text that require five times the number of pixels of standard DVD mandate that studios and IT departments share information.

Matt Kennedy of 1K Studios said he sometimes gets conflicting messages from studios when trying to meld creative and technology forces for high-definition.

Panelists said other hurdles, which include ever-shrinking budgets between creative and IT departments, help further the conclusion that just because technology exists to enhance viewer interaction doesn't necessarily mean the consumer wants to pay for them.

“A lot of lines defined in standard-definition DVD are blurring in HD,” said Mitchell Rubenstein, EVP of Creative Domain. “We have to determine what is doable.”

Disc manufacturers said they learned with the original launch of DVD from VHS that costs of first-generation machinery kept them on their financial toes. Logistical problems include disc returns, recycling of returned or unused product and even how retailers would deal with the probability of theft of more expensive high-def discs.

Additional reporting by Jessica Wolf.

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