DVD format fracas looms - East Valley Tribune: Business

DVD format fracas looms

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Posted: Sunday, April 22, 2007 6:24 am | Updated: 7:03 pm, Fri Oct 7, 2011.

A retail war is waging over the next-generation DVD, and so far most consumers are staying out of it. On one side is HD DVD, which is backed by Toshiba, Microsoft, Intel and others, as well as studios like Warner Bros. and Paramount.

On the other side is Blu-Ray, backed by Sony, Apple, Samsung, Pioneer and others, as well as studios like Disney and Twentieth Century Fox.

HD DVD came out of the gate first with an aggressive marketing campaign, players and its own lineup of movies.

Blu-Ray followed, but has since surpassed HD DVD in the number of movies available, and received a boost in popularity and sales from Sony’s PlayStation 3, which is a Blu-Ray player.

Both sides claim victories:

• This week, the North American HD DVD Promotional Group announced that sales of HD DVD players reached more than 100,000 in the United States.

• Late last month, Sony Pictures Home Entertainment announced that the Blu-Ray of the latest James Bond film “Casino Royale” hit the 100,000 unitsshipped mark and has set records at retail for the highest number of high-definition copies sold in one day. It released the movie solely on Blu-Ray.

The battle is expected to intensify as more lower-priced players and movies enter the market.

So where does the average consumer stand?

“I think there’s a lot of customers waiting to see who wins,” said Roman Zepeda, general sales manager at Showcase Home Entertainment in Scottsdale. “There’s also a lot of customers waiting to get to that price point they like.”

Despite all the hoopla, traditional DVD remains the top draw for consumers, said Matt Duda, Ultimate Electronics’ director of merchandising for video.

“But it’s not going to be too long in the future when highdefinition takes over,” he said.

THE MOVIE GAME

Both HD DVD and Blu-Ray offer a high-definition presentation superior to traditional DVD, so video and audio quality won’t be the deciding factor of which format either lives or dies, Zepeda said.

“The formats are going to be driven by who gets the most (movie) titles out because, in the end, in both formats, the players will come down to where they’re affordable,” he said.

Some studios are releasing films in both formats, while others are releasing solely on one format. Sony and Disney, for example, are releasing their titles exclusively on Blu-Ray.

“Blu-Ray has the support of a greater number of studios than HD DVD, and a lot of that has to do with the encryption of content because a lot of people don’t want content pirated,” Duda said. “Blu-Ray has been touting that it has a better encryption than HD DVD.”

Still, the number of movies available in either format remains limited, and the discs are much more expensive than traditional DVDs, he said.

“When you look at the price of a normal DVD, right around on average $15, Blu-Ray or even an HD DVD is right around $25 to $30,” Duda said. “So it’s still considerably more expensive not only to buy the player, but to buy the content.”

PLAYER WARS

For the most part, prices for HD DVD and Blu-Ray players have kept most consumers out of the hi-def game, with the exception of enthusiasts who just have to have the latest technology,

Toshiba’s latest move in the format war was lowering the prices of three of its HD DVD players, with the lowest price falling to $399, and lower on the Internet.

“For Blu-Ray, you’re talking about Sony’s at $999 right now, and Samsung is at $799,” Duda said. “So Blu-Ray is still commanding a premium for the additional capacity on the disc as well as the support it has from a studio standpoint.”

However, both Sony and Samsung are planning to launch $500 Blu-Ray players in the coming months, Zepeda said.

“(Player price) will no longer be an advantage for HD DVD and really at the end of the day it’s going to come down to what studios are putting movies out for which,” he said.

Combo players that play both formats will be entering the market soon, but those players will cost more than any machine that plays either format, Zepeda said.

“It will never be the same price as if you’re buying one player because obviously you have two machines in one box,” he said.

Of course, there’s no rush for consumers who don’t have a high-definition television to buy into either format because doing so is pointless.

“If you don’t have an HDTV, you’re not going to get the right signal,” Duda said. “You want to make sure the TV is capable of at least receiving a 720p signal, which is the beginning resolution for an HD signal.”

ONE WILL WIN

Those who can’t wait for the war to be settled aren’t necessarily taking a gamble because both formats still have a life cycle, Duda said.

“This is still very much a new technology even though it’s been out for well over a year now,” he said.

Eventually, it will come down to one format because the market won’t support both formats for very long, Zepeda said.

“There’s a lot of people who are buying based on the fact that they’re not sure who’s going to win,” he said. “They’ve got a gut feeling that maybe this guy is going to win or maybe this guy, and they’re able to watch high-definition DVD movies now.”

Whoever releases the most movies and has the most effective marketing eventually will win the format war, and sooner rather than later, Zepeda said.

“A year from now the consumer will decide the better format,” he said. “Both look phenomenal, but you can’t have two formats.”

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