Warner Brothers Entertainment today announced that the company plans to release high-definition movies exclusively in Blu-ray format beginning this spring, which comes as a major blow to the competing HD DVD camp. Only two major studios — Universal Pictures and Paramount Pictures — are now providing high definition content exclusively in the HD DVD format, while Sony, Fox, Disney and Lionsgate all support Blu-ray. According to Variety, the Warner announcement includes both Warner Bros. Pictures and Warner’s New Line Cinema.
Opinions differ over whether today’s news is the final death knell for HD-DVD, although most commentators believe that it is the beginning of the end for the format. The Wall Street Journal quotes Pali Research analyst Rich Greenfield as saying, “We expect HD DVD to ‘die’ a quick death,” but the Journal also states that “other analysts thought HD DVD could survive Warner’s decision, as long as the group could hold on to support from Universal and Paramount.”
Microsoft’s support for HD DVD as an add-on to its Xbox game system may help to keep the format alive. But if sales of Blu-ray discs continue to exceed those of HD DVD — which, with the Warner announcement, appears inevitable — it is difficult to envision Universal and Paramount remaining exclusively with HD DVD. Movie studios are in the content business. They won’t sit on the sidelines and let revenues slip away because of media format differences. Expect to see one or both of these studios switch to supporting both formats in the future.
And they may want to move quickly. As Scott Kirsner points out in his CinemaTech blog, as the delivery of on-demand high-def content becomes more viable, the studios have a limited time period to extract profits from media sales. Kirsner writes that “Studios probably don’t have a decade to squeeze nice profits out of Blu-ray disc releases, as they enjoyed with the original DVD format.”
Regardless of how long HD DVD hangs on, the emergence of a single dominant format is an important step forward in the home entertainment business. The format wars have frustrated consumers and severely hampered the growth of high-def media. A few electronics companies like LG Electronics and Samsung have attempted to sidestep the issue by developing dual-format players that support both Blu-ray and HD DVD. But this doesn’t resolve the real problem. The content is more important than the player. For many people, the value of their movie library far exceeds that of the device used to view the discs. It’s the media people are investing in, not the player. Until we get a single, universally supported format, high-def media will continue to stumble.
There are many who hoped for HD DVD to succeed as the format of the future. When Knowledge@Wharton covered the topic of Blu-ray vs. HD-DVD back in November, 2006, we received e-mail messages from angry readers lambasting us for merely quoting Forrester Research analyst Ted Schadler who predicted that Blu-ray will win out because it has more support from the studios. While many techie-types may have favored HD DVD because of some perceived superiority of the format, in many cases their aversion to Blu-ray may have been driven in part by their disdain for Sony and the company’s tendency to develop proprietary solutions rather than support industry standards.
But the differences between HD DVD and Blu-ray are not significant enough to cleave to one side with religious fervor. It’s more important that we have a consistent, durable format.
And it looks like Sony may emerge victorious this time. After being on the losing side of Betamax vs. VHS and Memory Stick vs. Secure Digital, Sony may finally have a winner in Blu-ray.