No punches pulled in high definition war

**bruceames** · 05-03-2007, 02:45 PM

Sony's dream of an early victory in the next-gen DVD format fight has been dashed by poor PS3 sales

Kate Bulkley
Thursday May 3, 2007
The Guardian

If it was a Hollywood movie it would be a remake of Alien v Predator. On one side is the giant Sony corporation, which is backing the Blu-ray high definition DVD format by building it into its PlayStation 3 games consoles. Facing it across the global battlefield is Toshiba, backed by Microsoft and Intel, promoting the rival (and incompatible) HD DVD format.
The stakes are very high indeed for companies on both sides. Yet Sony, the pre-fight favourite - with the best-selling games console franchise in the world and the backing of seven Hollywood studios (basically all of the big ones except Universal Pictures) making their movies available on Blu-ray - is nowhere near delivering the early knockout blow it wanted.

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Instead, early defections from the Blu-ray-only camp and lagging sales of PS3 consoles have blurred the picture of which format will win. Samsung broke ranks with Blu-ray last month by announcing it will make players that play both HD formats, following a similar move by LG. In addition, most analysts acknowledge that the PC manufacturers will play a key role in the format war - and having Microsoft and Intel behind HD DVD is significant. Neither of these two Toshiba allies has shown signs of switching camps so far.
Gamble on a bundle

Meanwhile, PS3 sales in the UK, the European market where PS3 has had its most successful launch, were 165,000 in week one but fell to 28,000 in the second week, a trend that has been echoed in other markets as well.

Sony took a big gamble bundling the Blu-ray player with the PS3, a move that contributed both to delays in its release and higher prices for the consoles. Last week Ken Kutaragi, the "father of the PlayStation", paid the price and resigned as chairman and chief executive of the Sony Computer Entertainment unit.

With the sales of PS3 lagging, the new machines may not be the cornerstone of a recovery at Sony, with videogame-related losses for Sony's year ending in March expected to amount to $2bn (£1bn) - double original expectations.

Sony has a lot riding on the success of the PS3, especially after it was wrong-footed in the music player market by Apple's iPod. It certainly doesn't want to have another Betamax or MiniDisc story, either. For Sony the PS3 and Blu-ray are part of an important corporate move to regain its pre-eminence in the consumer electronics business.

The picture is less clear for Toshiba, but certainly the company is keen to secure its share of the nascent market for high-definition players, and that means not wanting terms to be dictated by Sony. Toshiba also has an important backer on its side in Microsoft's Xbox.

The decision not to build the HD DVD player into the Xbox console means it does not work as a Trojan horse as the PS3 does for Blu-ray. But those who choose to buy an HD DVD attachment for the Xbox are definitely motivated by a desire to buy and play discs in the new HD format.

On the retail side, the battle is also taking some interesting twists. In a recent blog on Digital Trends, Rob Enderle said that US retail giant Wal-Mart (which owns Asda in the UK) plans to bring in "a massive number of low cost (possibly sub-$200) HD DVD players for Christmas". Although unconfirmed by Wal-Mart, such a move could be decisive. Wal-Mart uses DVD sales as a loss-leader to attract shoppers and accounts for between 40% and 45% of all US DVD sales.

In Europe, the HD DVD Promotion Group has also been busy signing up smaller European studios to the Toshiba format, hoping to "build a local ecosystem" for HD DVD software. The group is able to leverage the fact that the cost of replicating HD DVD discs is cheaper - the equipment is an upgrade from DVD replicators and there are no regional code controls.

Appetite for local-language movies is also quite high in several European countries, a fact that the HD DVD camp hopes to exploit by having more of these titles available on their format sooner. In France, for example, 40% of the DVD market is for titles from independent studios, according to Screen Digest. "We expect to have 200 unique titles available by year's end in Europe and a third of them will be local," says Xavier Bringue, HD DVD European group manager.

Crumbling support

At the moment there are 180 Blu-ray titles available in Europe, coming almost exclusively from big Hollywood studios. But despite the weight of titles, the number of HD DVD discs that are bought against the number of players sold is much higher than for Blu-ray discs. In the UK, this so-called "attach rate" for HD DVD discs is 28 per year on average, while for Blu-ray it's five, says the HD DVD Promotion Group.

While sales of Blu-ray hardware in the US (including PS3s and standalone players) is 5-toǃ against HD DVD hardware sales, Blu-ray's software sales figures are also a lot less impressive, at 2.3 discs per player, according to a recent report. "If PS3 people all started buying HD discs then by sheer weight Blu-ray would walk this battle," says Helen Davis Jayalath, senior video analyst at Screen Digest. "But that's not likely, because they are gamers." And, she adds, the Wal-Mart story "was an overoptimistic leak on the part of one of a number of Chinese companies that Wal-Mart is talking to. [Enderle] seems to believe that if a Wal-Mart cheap player deal goes ahead, HD DVD will 'win'. I'm not sure Sony will give up that easily."

But the Blu-ray hard line has begun to crumble among Hollywood studios, where Warner Bros and Paramount are hedging their bets by making discs in both formats. And it may be significant that Warners will offer its much-anticipated The Complete Matrix Trilogy only on HD DVD later this month. Given the importance of the first Matrix movie to the adoption of DVD players, this may be significant for HD DVD.

Much of the format battle revolves around which blockbuster movies are released on which formats and when. But an even bigger question is the pricing of players. At the moment Blu-ray players are more expensive - and not just the PS3 consoles. Standalone Blu-ray players are as much as $300 more expensive in the US than HD DVD players similar pricing gaps exist in other markets.

But perhaps the biggest problem is that even the cheapest standalone players cost more than $300 each, too high to spur mass consumer adoption. Given the high stakes for both hardware makers and content companies, neither side is likely to stand down easily. In fact, this format war might not have a clear winner and loser. Despite the video industry's painful memories of Betamax vs VHS, multiple formats do co-exist in the games industry.

"The most likely scenario is that neither lose, but instead both formats survive," says Davis Jayalath of Screen Digest. "That doesn't mean it will be a 50/50 split. It just means that even though it is more than likely that Blu-ray will be the stronger format, HD DVD is still strong enough to be a viable business."

http://browse.guardian.co.uk/search?search=blu-ray

DSNY FN · 05-03-2007, 03:50 PM

Great article Bruce thanks for the read.

MidnightWatche · 05-03-2007, 05:32 PM

HD DVD rocks.

**bruceames** · 05-03-2007, 07:24 PM

I like how it put the Walmart story in perspective. Independent studios, the little guys, will make a big difference in this war. If they primarily go HD DVD, then Blu-ray has a problem. But why would small studio go to Blu-ray, are they going to invest in new, expensive replication lines based on a new competing format or outsource the job? Or would they prefer to use the equipment they got and just retool when they do an HD DVD run? Duh! Why reinvent the wheel for so little gain and so much risk?

Lee Stewart · 05-03-2007, 07:54 PM

A very concise article that really tells the story of the format war to date without any of the ra-ra's we have seen from other articles.

I was surprised that no mention of China as a market for HD DVD was mentioned. They are the number one emerging market in the world as of today.

junehhan · 05-03-2007, 08:52 PM

I personally HATE the Guardian for their extreme left wing political views, but I love this article. To be fair though, The Guardian has never been much of a fan of Sony and BD lately with their recent string of articles(which does show a pro-HD-DVD bias), but i'll take it none the less! Good find Bruce

**PFC5** · 05-03-2007, 08:54 PM

But they are only on the "Verge" of being a factor. They still have about 60-75% (or something like that) of the population without running water & electricity.

It is kind of hard to watch HD without electricity.

junehhan · 05-03-2007, 08:59 PM

Quote:

Originally Posted by PFC5

But they are only on the "Verge" of being a factor. They still have about 60-75% (or something like that) of the population without running water & electricity.

It is kind of hard to watch HD without electricity.

Not only that, but people are forgetting that those people over there are finally starting to enjoy luxuries in life like appliances and even a "refrigerator." Its pretty interesting how they have started being able to afford some simple durable goods(previously considered a luxury) now that they have started undergoing their version of the Industrial Revolution. Bad news is that they are seeing some horrific effects environment wise just like any other country undergoing the industrial revolution experienced.

fryet · 05-04-2007, 02:26 AM

Pure propaganda piece for HD-DVD. I love how they can twist BR outselling HD-DVD by a 2-1 margin as a liability. They also take some pro-HD-DVD rumors, and run with it. This is definitely a case where the writer decided what they wanted to write, and then looked for facts to support it.

oblioman · 05-04-2007, 02:44 AM

Quote:

Originally Posted by fryet

Pure propaganda piece for HD-DVD. I love how they can twist BR outselling HD-DVD by a 2-1 margin as a liability. They also take some pro-HD-DVD rumors, and run with it. This is definitely a case where the writer decided what they wanted to write, and then looked for facts to support it.

Precisely. Much of the format battle revolves around which blockbuster movies are released on which formats and when. Can you say Spiderman 3. Whoever Kate Bulkley is, she should pay a visit to this forum. We have been discussing what she "wrote" for some time. Or perhaps she did visit the forum, plagged what all of you good people have been writing, and developed her pro-HD DVD article.

**bruceames** · 05-04-2007, 04:30 AM

Spider-man 3. I hear it sucks. One lousy movie, so what?

Of course it's a pro HD DVD article. Did you read anything good about Blu-ray in it? Blu-ray.com or thebits.com are excellent feeding grounds to base a pro Blu-ray article on. Maybe she just wasn't hungry for Blu.

Lee Stewart · 05-04-2007, 05:32 AM

Quote:

Originally Posted by oblioman

Precisely. Much of the format battle revolves around which blockbuster movies are released on which formats and when. Can you say Spiderman 3. Whoever Kate Bulkley is, she should pay a visit to this forum. We have been discussing what she "wrote" for some time. Or perhaps she did visit the forum, plagged what all of you good people have been writing, and developed her pro-HD DVD article.

Can you say The Matix Trilogy.

Which movie is released is important but it is not IMO, the deciding factor. A person has to committ to buying an HD movie player before buying an HD movie.

Oh Oh . . . there is that price issue again.

ja2935 · 05-04-2007, 07:30 AM

Quote:

Originally Posted by fryet

Pure propaganda piece for HD-DVD. I love how they can twist BR outselling HD-DVD by a 2-1 margin as a liability. They also take some pro-HD-DVD rumors, and run with it. This is definitely a case where the writer decided what they wanted to write, and then looked for facts to support it.

Yes, that's journalism - it's the same with recorded and edited 'reality' shows - the 'story' is contrived in the cutting room from hundreds of hours of recording! With sufficient material you can slant a story any way you like.

Nevertheless, I can't help thinking that BR is on the slippery slope to extinction. I was an early adopter of Betamax in the UK - my Toshiba (yes, Toshiba) Betamax player performed flawlessly but still fell by the wayside as fewer pre-recorded tapes were made available. Although the US is a big market, this conflict will probably be settled globally.

junehhan · 05-04-2007, 09:19 AM

Quote:

Originally Posted by fryet

Pure propaganda piece for HD-DVD. I love how they can twist BR outselling HD-DVD by a 2-1 margin as a liability. They also take some pro-HD-DVD rumors, and run with it. This is definitely a case where the writer decided what they wanted to write, and then looked for facts to support it.

And you don't have a problem with the constant BD PR crap that's been coming out lately? That's kind of why journalism has turned into the joke that it has, as its the job of journaists to be indepedent and be objective, not subjective. However, any HD-DVD supporter is going to take any good article they can for right now.

oblioman · 05-05-2007, 03:33 AM

Quote:

Originally Posted by Lee Stewart

Can you say The Matix Trilogy.

Which movie is released is important but it is not IMO, the deciding factor. A person has to committ to buying an HD movie player before buying an HD movie.

Oh Oh . . . there is that price issue again.

Yup, the Matrix,,seen it,,own all 3. Won't buy it again. However Spidy3 is brand new and from what me hears is that it's damn good. Herein lies a problem for both formats - new blockbusters will sell, but for me personally, if me has a movie in my collection, I would be reluctant to buy it again.

05-03-2007, 02:45 PM	#1
bruceames Moderator Join Date: May 2006 Location: San Rafael, CA Posts: 10,170	No punches pulled in high definition war Sony's dream of an early victory in the next-gen DVD format fight has been dashed by poor PS3 sales Kate Bulkley Thursday May 3, 2007 The Guardian If it was a Hollywood movie it would be a remake of Alien v Predator. On one side is the giant Sony corporation, which is backing the Blu-ray high definition DVD format by building it into its PlayStation 3 games consoles. Facing it across the global battlefield is Toshiba, backed by Microsoft and Intel, promoting the rival (and incompatible) HD DVD format. The stakes are very high indeed for companies on both sides. Yet Sony, the pre-fight favourite - with the best-selling games console franchise in the world and the backing of seven Hollywood studios (basically all of the big ones except Universal Pictures) making their movies available on Blu-ray - is nowhere near delivering the early knockout blow it wanted. Article continues -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Instead, early defections from the Blu-ray-only camp and lagging sales of PS3 consoles have blurred the picture of which format will win. Samsung broke ranks with Blu-ray last month by announcing it will make players that play both HD formats, following a similar move by LG. In addition, most analysts acknowledge that the PC manufacturers will play a key role in the format war - and having Microsoft and Intel behind HD DVD is significant. Neither of these two Toshiba allies has shown signs of switching camps so far. Gamble on a bundle Meanwhile, PS3 sales in the UK, the European market where PS3 has had its most successful launch, were 165,000 in week one but fell to 28,000 in the second week, a trend that has been echoed in other markets as well. Sony took a big gamble bundling the Blu-ray player with the PS3, a move that contributed both to delays in its release and higher prices for the consoles. Last week Ken Kutaragi, the "father of the PlayStation", paid the price and resigned as chairman and chief executive of the Sony Computer Entertainment unit. With the sales of PS3 lagging, the new machines may not be the cornerstone of a recovery at Sony, with videogame-related losses for Sony's year ending in March expected to amount to $2bn (£1bn) - double original expectations. Sony has a lot riding on the success of the PS3, especially after it was wrong-footed in the music player market by Apple's iPod. It certainly doesn't want to have another Betamax or MiniDisc story, either. For Sony the PS3 and Blu-ray are part of an important corporate move to regain its pre-eminence in the consumer electronics business. The picture is less clear for Toshiba, but certainly the company is keen to secure its share of the nascent market for high-definition players, and that means not wanting terms to be dictated by Sony. Toshiba also has an important backer on its side in Microsoft's Xbox. The decision not to build the HD DVD player into the Xbox console means it does not work as a Trojan horse as the PS3 does for Blu-ray. But those who choose to buy an HD DVD attachment for the Xbox are definitely motivated by a desire to buy and play discs in the new HD format. On the retail side, the battle is also taking some interesting twists. In a recent blog on Digital Trends, Rob Enderle said that US retail giant Wal-Mart (which owns Asda in the UK) plans to bring in "a massive number of low cost (possibly sub-$200) HD DVD players for Christmas". Although unconfirmed by Wal-Mart, such a move could be decisive. Wal-Mart uses DVD sales as a loss-leader to attract shoppers and accounts for between 40% and 45% of all US DVD sales. In Europe, the HD DVD Promotion Group has also been busy signing up smaller European studios to the Toshiba format, hoping to "build a local ecosystem" for HD DVD software. The group is able to leverage the fact that the cost of replicating HD DVD discs is cheaper - the equipment is an upgrade from DVD replicators and there are no regional code controls. Appetite for local-language movies is also quite high in several European countries, a fact that the HD DVD camp hopes to exploit by having more of these titles available on their format sooner. In France, for example, 40% of the DVD market is for titles from independent studios, according to Screen Digest. "We expect to have 200 unique titles available by year's end in Europe and a third of them will be local," says Xavier Bringue, HD DVD European group manager. Crumbling support At the moment there are 180 Blu-ray titles available in Europe, coming almost exclusively from big Hollywood studios. But despite the weight of titles, the number of HD DVD discs that are bought against the number of players sold is much higher than for Blu-ray discs. In the UK, this so-called "attach rate" for HD DVD discs is 28 per year on average, while for Blu-ray it's five, says the HD DVD Promotion Group. While sales of Blu-ray hardware in the US (including PS3s and standalone players) is 5-toǃ against HD DVD hardware sales, Blu-ray's software sales figures are also a lot less impressive, at 2.3 discs per player, according to a recent report. "If PS3 people all started buying HD discs then by sheer weight Blu-ray would walk this battle," says Helen Davis Jayalath, senior video analyst at Screen Digest. "But that's not likely, because they are gamers." And, she adds, the Wal-Mart story "was an overoptimistic leak on the part of one of a number of Chinese companies that Wal-Mart is talking to. [Enderle] seems to believe that if a Wal-Mart cheap player deal goes ahead, HD DVD will 'win'. I'm not sure Sony will give up that easily." But the Blu-ray hard line has begun to crumble among Hollywood studios, where Warner Bros and Paramount are hedging their bets by making discs in both formats. And it may be significant that Warners will offer its much-anticipated The Complete Matrix Trilogy only on HD DVD later this month. Given the importance of the first Matrix movie to the adoption of DVD players, this may be significant for HD DVD. Much of the format battle revolves around which blockbuster movies are released on which formats and when. But an even bigger question is the pricing of players. At the moment Blu-ray players are more expensive - and not just the PS3 consoles. Standalone Blu-ray players are as much as $300 more expensive in the US than HD DVD players similar pricing gaps exist in other markets. But perhaps the biggest problem is that even the cheapest standalone players cost more than $300 each, too high to spur mass consumer adoption. Given the high stakes for both hardware makers and content companies, neither side is likely to stand down easily. In fact, this format war might not have a clear winner and loser. Despite the video industry's painful memories of Betamax vs VHS, multiple formats do co-exist in the games industry. "The most likely scenario is that neither lose, but instead both formats survive," says Davis Jayalath of Screen Digest. "That doesn't mean it will be a 50/50 split. It just means that even though it is more than likely that Blu-ray will be the stronger format, HD DVD is still strong enough to be a viable business." http://browse.guardian.co.uk/search?search=blu-ray __________________ Blu-rays: 55 Latest purchases: John Adams, Gone With the Wind, Up, Rocky: The Undisputed Collection

05-03-2007, 03:50 PM	#2
DSNY FN High Definition is the definition of life. Join Date: Oct 2006 Location: London Ont Canada Age: 40 Posts: 2,273	Great article Bruce thanks for the read. __________________ HD IS THE ONLY WAY Bedroom setup Viewsonic N2752w Xpressvue 6100 Toshiba HD A2 Harmony 520 Livingroom setup Samsung HL-S5687WX Toshiba HD-DVD XA2 Xpressvue HD PVR Denon 3801 PSB Full surround Harmony 880 Nintendo GC Nintendo Wii (this console rocks) Mario Kart Wii friend code 4768-8283-5991

05-03-2007, 05:32 PM	#3
MidnightWatche High Definition is the definition of life. Join Date: Nov 2006 Posts: 944	HD DVD rocks. __________________ "Without struggle there can be no progress."

05-03-2007, 07:24 PM	#4
bruceames Moderator Join Date: May 2006 Location: San Rafael, CA Posts: 10,170	I like how it put the Walmart story in perspective. Independent studios, the little guys, will make a big difference in this war. If they primarily go HD DVD, then Blu-ray has a problem. But why would small studio go to Blu-ray, are they going to invest in new, expensive replication lines based on a new competing format or outsource the job? Or would they prefer to use the equipment they got and just retool when they do an HD DVD run? Duh! Why reinvent the wheel for so little gain and so much risk? __________________ Blu-rays: 55 Latest purchases: John Adams, Gone With the Wind, Up, Rocky: The Undisputed Collection

05-03-2007, 08:52 PM	#6
junehhan High Definition is the definition of life. Join Date: Aug 2006 Age: 29 Posts: 5,663	I personally HATE the Guardian for their extreme left wing political views, but I love this article. To be fair though, The Guardian has never been much of a fan of Sony and BD lately with their recent string of articles(which does show a pro-HD-DVD bias), but i'll take it none the less! Good find Bruce __________________ X360 Gamertag junehhan Toshiba HD-A1 HD-DVD player -Klipsch RSW10 Subwoofer -Pioneer VSX1016TXVK reciever -Klipsch Synergy Quintet III 5 channel speakers AIM: jhhan80 HD-DVD's: Loving it! BD's: When we get a reasonably priced BDP with lossless decoders Everyone wants to live at the expense of the state, they forget that the state lives at the expense of everyone - Frederich Bastiat, 1848

05-03-2007, 07:54 PM	#5
Lee Stewart Behold - the future! Join Date: Jan 2007 Location: Albuquerque, NM Age: 58 Posts: 25,193	A very concise article that really tells the story of the format war to date without any of the ra-ra's we have seen from other articles. I was surprised that no mention of China as a market for HD DVD was mentioned. They are the number one emerging market in the world as of today.

05-03-2007, 08:54 PM	#7
PFC5 Super Moderator Join Date: May 2005 Posts: 28,389	But they are only on the "Verge" of being a factor. They still have about 60-75% (or something like that) of the population without running water & electricity. It is kind of hard to watch HD without electricity. __________________ Denon AVR-887 Klipsch RP-5 Pwred Towers (mains) (525 watts peak each 12"Subs) All Klipsch RC-25(ctr),(2)SS1(surr),(2)SS1(rearSurr) Toshiba (2)HD-A20,PS3,BD35 For SACD/DVD-A Samsung HD-841 Panny 50pz80u plasma SETTINGS RCA HD50LPW162 50"DLP w/HD2+ SA 3250HD 47" LCD+Yamaha5790+HD-A1(bedroom) Harmony 680 + (2) 670s (amazing remote/support) Game room with Onkyo receiver & B&W Speakers The_Cable_Game Take the high ground and be happier

05-04-2007, 02:26 AM	#9
fryet High Definition is the definition of life. Join Date: Mar 2005 Location: Bay Area, CA Age: 38 Posts: 632	Pure propaganda piece for HD-DVD. I love how they can twist BR outselling HD-DVD by a 2-1 margin as a liability. They also take some pro-HD-DVD rumors, and run with it. This is definitely a case where the writer decided what they wanted to write, and then looked for facts to support it.

05-04-2007, 04:30 AM	#11
bruceames Moderator Join Date: May 2006 Location: San Rafael, CA Posts: 10,170	Spider-man 3. I hear it sucks. One lousy movie, so what? Of course it's a pro HD DVD article. Did you read anything good about Blu-ray in it? Blu-ray.com or thebits.com are excellent feeding grounds to base a pro Blu-ray article on. Maybe she just wasn't hungry for Blu. __________________ Blu-rays: 55 Latest purchases: John Adams, Gone With the Wind, Up, Rocky: The Undisputed Collection Last edited by bruceames; 05-04-2007 at 04:32 AM.

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