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Report: Taking Sides in HD War Costly

22 Sep, 2007 By: Erik Gruenwedel

Studios that continue to take sides in the ongoing next-generation packaged-media format war between Blu-ray Disc and HD DVD risk losing out on upwards of $270 million in consumer spending in 2008, according to a new report.

London-based Screen Digest found that staunch Blu-ray supporters Sony Pictures Home Entertainment, 20th Century Fox Home Entertainment and Walt Disney Studios Home Entertainment could miss out on about $175 million in consumer spending by not releasing titles in HD DVD.

The study also found that sole HD DVD backers Universal Studios Home Entertainment, Paramount Home Entertainment and DreamWorks SKG, could lose even more with Blu-ray sales exceeding HD DVD 2-to-1.

Screen Digest found that while sales of Sony's PlayStation 3 system with a Blu-ray drive exceed sales of standalone HD players (regardless of format) 6-to-1, PS3 owners are less likely to buy movies than standalone owners.

The report said Paramount's recent “get off the fence” move toward HD DVD exclusively will likely result in other studios becoming format agnostic in 2008 — a strategy the report said effectively secures HD DVD's immediate future and prevents individual studios from being accused of prolonging the format war.

With studios embracing the fourth quarter, and the holidays specifically, for consumer adoption of high-def packaged media, Screen Digest analyst Richard Cooper said consumer buy-in to either format will be vital.

“Studios that have chosen to support one format over the other will realize that they are missing out on potential sales and will have to decide how long they can afford to place principle over profit,” Cooper said. “We believe that eventually most will decide to offer their titles on both [formats] to maximize their returns.”

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