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HD Disc News

Jul 25th, 2007
Jockeying for market dominance

It’s Show Time

We first look to the Home Media Expo and ComicCon for news of the high definition disc format battle.  A panel called The Future of Retail and Home Entertainment generated some of its own items of interest.  It was disclosed that recent research revealed that, surprisingly, both HD DVD and Blu-ray Disc will enjoy success.  Each is expected to coexist in the marketplace; HD DVD’s is attributed to Toshiba’s tenacity and, so far, Universal’s steadfast loyalty to the format. 

According to Adams Media Research, 2012 is still the magic year when HD discs will surpass DVD sales: $10 billion for HD on disc compared to $8 billion for DVD.  Adams further went on to suggest that the HD disc sales would be evenly split between HD DVD and Blu-ray Disc.  That’s five years out and a prediction I’m having trouble wrapping my head around considering the lopsided studio support.

NPD research found that consumers’ lack of understanding of HD technology is definitely getting in the way of HD disc format growth.  NPD analyst Russ Crupnick was quoted as saying, “Consumers are entirely confused.”  Ten percent believe that they already have an HD disc player, yet only one percent of consumers presently do.  Studios cite the lack of HD knowledge of retail salespersons as a prime cause of inadequate consumer education.  So the Entertainment Merchants Association distributed a sales aid in the form of a CD-ROM during Tuesday’s opening session.  The disc is intended to train electronics salespeople on the format war and highlight the new capabilities and features of high definition.

On a related note, Crupnick also indicated that NPD research has documented a substantial drop in movie downloads over the course of that last twelve months, whereas DVD sales continue to be a significant revenue stream.  This is a bullish indicator of the physical media market.

Surprisingly, the HD disc camps made little or no effort to influence retailers at the Expo.  There were no substantive efforts to demonstrate hardware and software to spur either format.  So far, consumers seem to be the focus of their efforts.  For example, Toshiba announced that its five free discs with player purchase offer was extended until September 30th.  The one exception for retailers is the HD Promotional Group’s offer of Toshiba’s bottom end HD DVD to the trade show attendees for $99, $200 less than the SRP, a clear effort to grow the installed base among those who can influence consumer decisions.

A reduced presence by the two HD disc camps shouldn’t be considered an indication of lack of interest or support.  Both HD DVD and Blu-ray Disc made strong showings at September’s CEDIA and January’s Consumer Electronics Show.  Each held special gatherings for the press and set up booths to demonstrate and push their respective formats.

New Line Jumps In As Format Agnostic

New Line Home Entertainment has confirmed that it’s going to begin releasing HD discs in the fourth quarter.  Its first title is reported to be the recent theatrical release Hairspray, day and date with DVD.  The studio will support both formats, just like Paramount and Warner.  The studio previously revealed at CES that it was planning a dual format support approach.  New Line is the last major to commit to HD on disc, and it’s significant.  Hairspray may not be to your liking, but how about the Blade series, Boogie Nights, the Austin Powers series, Dark City, The Mask, the Rush Hour series, Se7en, Spawn, or the Lord of the Rings trilogy?  I find it interesting that New Line decided to press ahead with dual format support instead of waiting for Warner’s dual HD format Total HD disc next year.  A New Line formal announcement isn’t expected for months.

BCI Jumps In As Format Agnostic
A little less exciting, but interesting on another level is BCI Home Entertainment’s announcement that it, too, will begin to release content on HD disc.  The small studio will offer 2006's Ultimate Force on both HD DVD and Blu-ray Disc on November 13th.  The film may be straight-to-video, but the significance is that yet another organization has decided to make the transition to high definition. 

Paramount Ups Audio Ante

Paramount Pictures Home Entertainment may have released some mighty fine looking HD discs, but the studio has resisted support for superior audio.  Now comes word that future releases will contain both Dolby TrueHD or PCM tracks.  It’s been reported that the influence of HD disc player owners motivated the studio to enhance the audio options on its HD disc offerings, so never assume that you can’t make a difference.  Blades of Glory, due August 28th, and Next, due September 25th, are the first titles expected to have advanced audio options.  HD DVDs are expected to have Dolby TrueHD 5.1 tracks and Blu-ray Discs are expected to offer uncompressed PCM tracks.

Samsung Makes Up For Early Blu-ray Disc Player Gaff

The manufacturer’s BD-P1200 has been released with an SRP of $649.  Early reviews indicate that Samsung was considerably more careful with this design than its initial offering that softened the image due to a firmware glitch.  The new player is reported to have exemplary image quality, competitive to the less expensive Sony BDP-S300.  But the Samsung offers two significant features: HDMI 1.3 and Silicon Optix HQV processing via the Reon chip set.  Its HDMI 1.3 implementation will support Deep Color when it’s encoded into the video in the not too distant future, and it’s hoped that the port will also pass the lossless audio formats of Dolby TrueHD and DTS HD Master Audio as bit streams for external decoding.  Alas, the player is also reported to be more likely to freeze, indicating a less effective implementation of error correction or looser optics.

Denon Finally Goes Blu

Respected and pricy, Denon is certainly consistent.  The DVD-3800BDCI Blu-ray Disc player will be very capable and sport an impressive price tag.  The player will be the first to market with an HDMI 1.3a output port that is assured to pass as digital bit streams all the advanced audio CODEC audio tracks.  Deep color, of course, will be supported, and the BD player will use Realta’s HQV processing.  (Denon also announced six decoding receivers that will accept the HDMI 1.3a signals and decode the advanced audio CODEC bit streams.)  The player is reported to be the first Version 1, Profile 1.1 Blu-ray Disc player, which supports advanced interactivity features.  And all this goodness comes at a price; the SRP will be $1,999.  Denon always made expensive DVD players; the manufacturer has now announced the most expensive BD player.

Road Show

I was fortunate to be present on the first day and at the first stop of Toshiba’s HD DVD road show intended to promote the premiere of the format (I reported my impressions to you over a year ago).  Now comes word that Disney’s Buena Vista Home Entertainment and Panasonic are taking Blu-ray Disc on the road, visiting malls nationwide.  Disney’s Magical Blu-ray Tour will first visit the Westfield Topanga Mall in Canoga Park, California, and then visit seventeen other shopping centers. 

The Tour will feature interactive stations and a small theater for hourly demonstrations.  BVHE said that the tour will include previews of both Cars and Meet the Robinsons in high definition and demonstrations of the Liar’s Dice game on the Pirates of the Caribbean: Dead Man’s Chest Blu-ray Disc.  The tour is cited as both a BD promotional effort and an educational opportunity for consumers, many of whom are known to be confused about the technology.

Mall stops will include:

Westfield Topanga, Canoga Park, Calif., Aug. 17-19
South Coast Plaza, Costa Mesa, Calif., Aug. 24-26
Westfield North County, Escondido, Calif., Aug. 31-Sept. 2
Westfield San Francisco, San Francisco, Calif., Sept. 7-9
Washington Square, Portland, Ore., Sept. 14-16
Westfield South Center, Seattle, Wash., Sept. 21-23
Mall of America, Bloomington, Minn., Sept. 28-30
Orland Square, Orland Park, Ill., Oct. 5-7
Westfield West County, St. Louis, Mo., Oct 12-14
Tyson Corner Center, McLean, Va., Oct. 19-21
Roosevelt Field, Garden City, N.Y., Oct. 26-28
Burlington Mall, Burlington, Mass., Nov. 9-11
King of Prussia, King of Prussia, Pa., Nov. 16-18
Circle Centre, Indianapolis, Ind., Nov. 23-25
Lennox Square, Atlanta, Ga., Nov. 30-Dec. 2
The Galleria, Houston, Texas, Dec. 7-9
Barton Creek Square, Austin, Texas, Dec. 14-16
Chandler Fashion Center, Chandler, Ariz., Dec. 21-23

Sony’s Next Aggressive Marketing Move

Sony Pictures Home Entertainment has entered into a revenue sharing agreement with distributor Rentrak Corp. for Blu-ray Disc rentals.  This is the first confirmed revenue sharing deal in the HD disc market.  The agreement comes into force in September; Sony will offer all its new BD releases and selected BD catalog titles as an extension of an existing DVD revenue sharing arrangement.  Both organizations are hopeful that the deal will motivate holdout retailers to support Blu-ray Disc rentals.  If I understand the process correctly, the cost to the retailer of stocking discs is reduced in exchange for sharing rental revenues.  This could conceivably put more BD titles and copies into the brick and mortar rental shops.  The news comes within a month of Blockbuster’s announcement that it would expand HD disc offerings in 1,450 stores with only the Blu-ray Disc format. 

An Odd But Undeniable Indicator

On Sunday morning, thieves broke into Seattle’s Northgate Silver Platters and stole approximately two hundred Blu-ray Discs valued at over $7,000.  Silver Platters vice president Mike Batt said, “They basically took our whole Blu-ray section.  Genre didn't matter to them.  They seemed to know what they wanted.”  Hey, when a commodity becomes the target of thieves, it’s arrived.

Parting Thoughts

I’m a little confused by the mixed messages I’m getting from the Bu-ray Disc camp.  I see indications of aggressive marketing (Sony), consumer education (Disney), hardware progress (Samsung, Denon), and improved quality (Paramount).  But the BD camp seems to be neglecting its greatest advantage: studio support.  For the last three weeks, including the week ending July 13th, there were more HD DVDs released than Blu-ray Discs, 26% more in the last week alone.  Universal is quietly churning out HD DVDs that exceed the number of BDs issued by exclusive BD supporters.  Admittedly, Fox seems to have backed off due to piracy concerns (something I hope changes soon), but all the other studios seem to be holding back, releasing slowly as the high definition market grows and matures.  As was so frequently pointed out by the BD camp and by many industry watchers (this writer included): content is king.  Nielsen VideoScan statistics still indicate a 2:1 (67%:33%) sales advantage of BD over HD DVD to date in 2007, but for the week ending July 15th, the ratio dropped to 1.56:1 (61%:39%).  I refuse to draw any conclusions based on such a limited data set, but if the Blu-ray Disc camp expects to maintain its lead, it’s going to have to be aggressive with its disc release plans.  Content is still king.

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