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Studios: Slow & Steady Wins Race to Format Adoption

5 Dec, 2007 By: Erik Gruenwedel

Blogger Bill Hunt, of TheDigitalBits.com, speaks at the High-Def 2.0 conference.

A studio panel said adoption of high-definition packaged media remains on track, despite acknowledging the miscommunication between studios and consumer electronics manufacturers.

The panel was a part of High-Def 2.0 Dec. 4 in Los Angeles. Home Media Magazine produced the conference in cooperation with The Hollywood Reporter and Entertainment Merchants Association.

Don Eklund, EVP, advanced technologies, Sony Pictures Home Entertainment, said studios, together with CE manufacturers, felt a need to quickly unveil HD packaged media as a replacement to softening DVD sales.

He said the pressure, compounded by rival format HD DVD's drastic downward pricing on its players, has resulted in a commodity mentality directed at a largely indifferent consumer.

Eklund was referring to the $99 Toshiba players unveiled over a weekend last month by Wal-Mart, Amazon and Circuit City.

“I'm disappointed on behalf of CE companies that eliminated a reasonable amount of profitability out of the equation too early,” Eklund said.

The executive was among a predominantly pro-Blu-ray slate of speakers at the conference. Others studio panelists included Lori MacPherson, GM, North America, Walt Disney Studios Home Entertainment; Simon Swart, EVP and GM, North America, 20th Century Fox Home Entertainment; Miguel Casillas, SVP, DVD production, Lionsgate; Andy Parsons, SVP, industrial solutions business group, Pioneer Electronics; and Eisuke Tsuyuzaki, with Panasonic, among others.

Studio representatives backing HD DVD did not attend.

MacPherson said 2007 has been a pivotal year for Blu-ray with increased momentum in hardware and software offerings, which she said will result in stronger spending as the holidays approach.

“We feel like Blu-ray is doing exceptionally well,” she said.

Panelists at a separate session on 1080p resolution said the ongoing Blu-ray Disc Mall Tour coupled with retail participation and increased proliferation of HDTV sales, will help the format and HD media slowly turn the corner from early adopter to mass adoption in 2008.

Parsons, who is also marketing director of the Blu-ray Disc Association, said the evolution of HD packaged media takes time and has been progressing faster than DVD in its infancy.

“It takes time to get the word out,” Parsons said. “It takes time to get successful.”

Sony's Eklund said the key to convincing consumers about the merits of HD packaged media was exposing them to the format directly.

“If the retail sales force believes in [Blu-ray], that is an important part of [consumer adoption],” he said.

Fox's Swart said sales of the Sony PlayStation 3 game system with a Blu-ray drive continue to drive the format's movie sales. He said 75% of Blu-ray movie sales are attributable to the PS3.

Lionsgate's Casillas said the mini-major Jan. 1 will for the first time distribute a networked (Web-enabled) title, War, starring Jet-Li.

Futility of Format War

As with most political, societal and economic issues, there is no shortage of Internet bloggers weighing in on the format war.

Bloggers for TheDigitalBits.com, DVDReview.com and HighDefDigest.com offered their thoughts during a panel discussion.

“For the casual consumers, high def isn't even on their radar,” said Bill Hunt of The Digital Bits. “Most of those people are put off by the format war.”

Guido Henkel, with DVD Review said the studios only have themselves to blame for not meeting early high-def expectations.

He said that because studios have released several versions of the same movie on DVD, consumers have less incentive to pick up the HD DVD or Blu-ray version of the same film they may already own. Henkel said studios are devaluing their product by making it available for digital downloading.

“High-def adoption will happen gradually,” he said. “It's unreasonable to expect people to just suddenly buy millions of players.”

Hunt agreed, saying, “So many people have these DVD collections and they're like, ‘you know, I didn't even watch half of this stuff.’

The bloggers agreed that if the studios were to line up behind one format, consumer acceptance of high-def would be faster.

Bracke suggested studios “play hardball” and stop releasing DVDs in conjunction with a high-def release. Henkel said studios should lower the software price of high-def to meet the prices of DVD.

They said the studios should divert dollars way from beating the other side and toward educating consumers.

“I'd argue that [consumers are] deciding on neither of them,” Hunt said.

Sound Can Be Perfect

Experts on high-def audio discussed their passion for sound and representatives from leading PC companies discussed the high-def future for the home computer.

The audio experts discussed how difficult it can be to fit new, improved audio tracks on high-def discs.

“It just takes up an incredible amount of space,” said Dave Bales, VP of AV marketing and product planning for Pioneer Electronics.

The new tracks — True HD, Dolby Digital Plus and DTS-HD — deliver “lossless” audio to consumers, which experts say is as close to the master recording as possible. In addition, these less compressed audio files require increased disc capacity.

“You kind of get into voodoo at one point [trying to fit higher bit-rate soundtracks on high-def],” said Adam Sosinsky, VP of new technology for Sony BMG.

Sam Erickson with 44 Pictures, who produced and directed Dave Matthews & Tim Reynolds – Live at Radio City for Blu-ray, said HD audio exposes consumers to new listening experience.

“It's almost better than being [at the concert],” Erickson said.

The panelists said HD audio has the ability to make music a less-passive experience in a world dominated by portable MP3 players and ring tones.

“Music used to be the thing you'd actually sit down and listen to,” said Michael Giacchino, composer for the TV series “Lost” and Disney/Pixar's Ratatouille. “Now, you take it with you wherever you go.”

Panelists said technological improvements have resulted in HD audio becoming a sensation that can be felt as much as heard.

“Now we've got technology that brings it out,” Bales said. “The consumer will catch on. He or she has no choice.”

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