Blu-Ray Bill Hunt - At It Again - Part 3

Lee Stewart

From todays edition of The Digital Bits:


THE SOAPBOX

HD-DVD Buyers Beware (or... What Have You Done Head Geek?!)

We've gotten a few e-mails over the last couple days about Harry Knowles over at Ain't it Cool News going on the record saying that he's chosen HD-DVD and why, and how all his director friends tell him HD-DVD is the way to go, and how he "might be wrong" but has a knack for picking winning formats so there you go. Yeah. Well... look, we love Harry and the guys over at AICN. But flat out, Harry is wrong on this one. And since somebody needs to have the balls to say it, we'll step up to the plate.

It's funny, Doogan e-mailed yesterday about this: "I love the statement that his deciding factor was the reverse compatibility of HD-DVD. This is why people are afraid. Because people in power, who don't know shit and shouldn't be talking shit because they're full of shit, ARE talking. Harry should remove this post because it's flat out wrong." Todd... God bless him. But he's right. Like I said, Head Geek knows his movies and he is big-time plugged into the theatrical side of the business. But when it comes to the home video side, he's a little out of his element. And he's got a LOT of his facts wrong.

For the record, Harry says: "The kicker is... that it can play the 9000 or so DVDs I already have, as well as the HD DVDs. That Backwards compatibility feels right." Yeah... Blu-ray is backwards compatible too, Harry. It is fully 100% capable of playing all your DVDs, which needs to be said.

Later in the discussion thread, Harry claims: "Porn is HD DVD - it will win. I have faith in Porn"

This argument is SO six months ago. As we've said before, porn will not decide this format war. Yes, porn decided the VHS/Betamax format war... because at the time, the only way to watch adult films was to visit a seedy theater or spool up a Super-8 or 16mm underground film. So when porn on tape became available, that you could watch in the privacy of your own home, people went nuts for it. Unfortunately for Harry's argument, not only are there literally hundreds of thousands of $10 adult DVDs available, free porn is EVERYWHERE on the Net. And that's what companies like Vivid see as the future - downloading high-def porn to your PC. Read my lips: Porn WILL NOT decide this format war.

Later, Harry adds more: "and right now... there's something along the lines of 545 titles on HD DVD and only 62 for Blue Ray. That's nearly getting close to 10 to 1 in terms of selection."

Here's a MAJOR fact check: According to Ralph Tribbey's excellent and highly accurate DVD Release Report, here's the official U.S. title tally as of 5/23 for each format: HD-DVD - 201 titles released, plus 57 more announced. Blu-ray - 237 titles released with 40 more announced.

Maybe Harry meant adult titles? Yeah, not so much. Adult DVD Empire shows all of 9 actual HD-DVD adult titles available at the moment.

How are all those high-def titles selling? Let's see what Nielsen VideoScan says (click here and look at page one of the digital version of Home Media): As of 5/20, Blu-ray leads HD-DVD in overall software sales, 57% to 43% since both formats launched. The more recent trends are more lopsided: Blu-ray is outselling HD-DVD 67% to 33% year-to-date for 2007. That's a 2 to 1 margin, DESPITE the fact that HD-DVD claims to have sold many more actual stand-alone players than Blu-ray Disc.

How about the most recent sales numbers? Okay... let's consider 5/22, when Disney debuted both Pirates of the Caribbean films on Blu-ray against Warner's dual Matrix box sets on HD-DVD. According to Home Media: "The two “Pirates” films sold a combined total of nearly 47,000 units, while the higher-priced “Matrix” sets sold about 13,900 units." That's right. More people purchased BOTH Pirates BDs than purchased EITHER of the Matrix box sets - even the cheaper one. Warner's recent The Departed provides another case in point. By their own admission, the studio sold 58,300 copies on Blu-ray and just 35,300 on HD-DVD.

As for Harry's later comment in the Talk Back about "a lot of Reg DVDs are beginning to master in higher resolutions"... uh, Harry? The Hollywood studios have been mastering their films in high-def for DVD release for YEARS now. And here's a surprise (not!): Lots of cheap STANDARD DVD players already upconvert 480p DVDs to 1080 resolution via HDMI. Not just HD-DVD players. And (gasp!) Blu-ray players do this too. It's pretty a standard feature these days.

Look... like I said, we love Harry. But he's dead wrong on this one. I don't know what he's smoking over there, but it seems his DVD player broke, and when he saw that Toshiba had slashed their HD-DVD player prices to $299, he couldn't resist. For that, we can't blame him. But we CANNOT join him in recommending the HD-DVD format to ANYONE, no matter how cheap.
We've been involved with the home video industry for ten years now. Way back in 1997, when most people didn't even know what DVD was, we were telling people it was going to be the biggest thing since the CD. We were having conversations with the Hollywood studios that first year, where even the most senior studio executives were telling us we were crazy to think DVD was ever going to be anything more than a niche format. But we were right then. We gave the world it's first look at Circuit City's Divx format, and then said it was going to fail. We were right about that too. We were right about the need for the studios to support DVD's anamorphic widescreen capability, to ensure the highest video quality possible at the time, and we lobbed them hard to do so. Here at The Bits, we interact on a daily basis with studio personnel at all levels, with authoring/technical staffers, with DVD producers, with filmmakers and with hardware manufacturers. So we're pretty good at having our finger on the pulse of the home video industry, and knowing what the trends are. And anyone who has read The Bits since we started will know that, over the years, we've been right about a LOT more things than we've gotten wrong.

And all of that experience tells us this: HD-DVD is not going to win this format war. In fact, one of two things is possible right now: Either Blu-ray will win, or neither format will win. But the best HD-DVD can hope for is to just keep hanging in the game as long as possible.

Our readers trust us to give it to them straight, and to help guide them through the confusing home video landscape in such a way that they don't end up wasting their money. HD-DVD is a great format technically, but its business model is an utter and complete disaster from which it will not recover.
Meanwhile, Blu-ray is just as good technically and quality-wise, it has the support of EVERY HOLLYWOOD STUDIO BUT UNIVERSAL, it has the support of the MAJORITY OF HARDWARE MANUFACTURERS, and nearly the ENTIRE computer industry. There are lots of great titles coming out, many more titles are on the way, there are more models of stand-alone players available and they're getting cheaper all the time. Blu-ray Disc is by FAR the smarter choice. If you want spend the safe money, there's your best bet.

Let's get back to that business model problem I mentioned a moment ago. Toshiba was losing money on their HD-DVD players at the HD-A1's original $1000 retail price, but judging by eBay sales of the unit these days, people can barely give them away for a tiny fraction of that. The HD-XA2's original $799 SRP was also a loss for the company. But the last couple of weeks, Toshiba has been slashing prices dramatically and offering $100 rebates, effectively bringing the cost of the HD-A2 to $299. That seems like a great deal, and Harry certainly jumped on it. Hell, we wouldn't be surprised to see Toshiba slash down to $199 or even less by the holidays at this rate. But it means that Toshiba is losing even MORE money on HD-DVD hardware than they were before, which can't have a positive impact on their overall business. I don't know if I'd go so far as to call this a fire sale, but it sure smacks of desperation on Toshiba's part. But there's another, bigger problem with this as well. What other major (potential) HD-DVD manufacturer wants to compete with that?

The HD-DVD camp has long touted cheaper players as its big trump card, even going so far as to promote future super-cheap, off-brand models at CES this past January. But all this does is basically ensure that NO OTHER MAJOR MANUFACTURER WILL JOIN THE HD-DVD CAMP. Where's the business incentive to do so? If you can't make a profit, there's no point. Sure, LG and Samsung are making pricey combo players available that will play both HD-DVD and Blu-ray, but that's only because they know that a small enthusiast market will be willing to pay $1200+ for one. Neither has announced cheaper HD-DVD-only players to compete with Toshiba's and we're betting they won't.

When you look at the facts and trends, it seem to us here at The Bits that the ONLY thing the HD-DVD camp has to crow about right now is that they're the cheaper option. If that's all you have going for you, cheaper might win you a battle or two, but without more studio and industry support, it's never going to win you the war.

Meanwhile, on the Blu-ray side, Stan Glasgow (president Sony Electronics) has made recent press statements to the effect that the company's Blu-ray players could drop to as low as $299 by the holidays this year (click here). Other BD manufacturers (including Pioneer, Panasonic and Samsung) will have cheaper players available by the end of the year as well, some of them in the $399 or lower price range. And again, they'll play Blu-ray movies from EVERY HOLLYWOOD STUDIO BUT UNIVERSAL and yes, Harry... all your standard DVDs too.

Let's look at the studio support side. HD-DVD has just one major exclusive studio supporter: Universal. Blu-ray has FIVE: Disney, Fox, MGM, Lionsgate and Sony. Which group do you think is more likely to go format neutral first? For better or worse, one of the reasons some of these studios sided with Blu-ray exclusively is because that format offers them an additional layer of content protection: BD+ (the details of which Sony is soon to finalize, according to this story at Audioholics). By the way, that Audioholics story hints that Fox has a particular interest in BD+ protection for its high-def titles, which could be why they've delayed all those Fox and MGM catalog Blu-ray titles they talked about at CES. With AACS already smarting from a series of cracks, hacks and work-arounds that have exposed existing high-def titles (including The Matrix) to copying, does anyone really think those studios are going to start releasing their titles on HD-DVD format, especially when Blu-ray is already dominating software sales? Again, there's no incentive whatsoever.

We've been following this stupid, cursed high-def format war since the beginning, and it's driving us crazy. But we'll admit that maybe one good thing HAS come of it: HD-DVD cutting their prices so quickly has forced Blu-ray to do the same.

What we've found most puzzling about this high-def format war, is why Microsoft - a company that makes neither movies and TV shows or home theater hardware, is arguably the single biggest corporate supporter of the HD-DVD format outside of Toshiba and Universal. And though no one will say it on the record (though many industry insiders admit, off the record, that they believe it), we'd be surprised if Microsoft wasn't subsidizing both Toshiba's hardware losses and Universal's exclusive commitment to HD-DVD in some way. That's just our gut feeling. We can't prove it. But even Warner, which has a significant financial stake in the disc structure patients for DVD (and thus HD-DVD) has opted to support both high-def formats. Meanwhile, Microsoft has an office of "HD-DVD Evangelism" in house. Go figure.

So why would Microsoft do this? The are three reasons why it makes good business sense for the company. First, having HD-DVD playback capability on their Xbox 360 (via the add-on drive) is a smart strategic move to counter-balance Sony's having Blu-ray playback capability built into their PS3 system. Second, HD-DVD uses Microsoft's VC-1 video compression codec almost exclusively. For a variety of reasons - not the least of which is that it's a great codec - this has encouraged a number of Blu-ray Disc studios to adopt VC-1 as well, so more and more Blu-ray releases utilize it too. This again benefits Microsoft. But more importantly, Microsoft's real long-term goal is to dominate the content downloading arena - particularly the downloading of entertainment content to devices in future living rooms. That's what many industry observers, including many in Hollywood, see as the ultimate future of the home video industry. Selling lots of Xbox 360s and having everyone adopt the VC-1 codec both work to further Microsoft's goals in this area by helping to drive the growth of Xbox Live. According to the company's own recent press releases, Xbox Live is already "the number one online distributor of television and feature film content in the living room where it's most easy for consumers to access." In addition, "the service has quickly become the number two online distributor of television and feature film content, second to iTunes." Finally, Xbox Live is currently "the ONLY online distributor of major feature films and television programming in high definition (HD) resolution."

Microsoft doesn't give a rip about HD-DVD, or movies on disc at all for that matter, except to the extent that backing HD-DVD for a while now both undermines Sony's efforts and leverages Microsoft's success in achieving their ultimate goal of dominating the future of online distribution of digital entertainment. That's how we see it.

So how do we foresee this format war playing out? Our prediction is that by this time next year, Universal will have gone format neutral (gasp!), agreeing to support Blu-ray Disc in addition to HD-DVD. It could happen at CES in January 2008, it could even happen sooner. When that happens, and we do believe it's a matter of when and not if, this format war will effectively be over. Which matters not to Microsoft, because VC-1, the 360 and Xbox Live will do just fine either way. If Blu-ray begins to dominate this thing, the Big M will simply announce a Blu-ray add-on drive for the 360, and continue on its merry way.

That doesn't mean that HD-DVD is going to die or disappear. We'd bet that most, if not all, of the studios that currently support HD-DVD will continue to do so, at least for a while. And I'll remind you (though I know many HD-DVD fans will continue to claim otherwise) that none of what we've said is intended to disparage the HD-DVD format itself. It's a great high-def format, capable of excellent video and sound quality and extras. We enjoy HD-DVD ourselves, and we'll continue to do so. But HD-DVD is just not going to win this format war. We just don't see any circumstance in which HD-DVD can best Blu-ray and dominate the HD disc market and, believe me, we agonize over this stuff every day.

The bottom line remains the same: Any way you slice it, when you look at ALL the facts, Blu-ray Disc remains the best bet in this format war, and the safer bet for consumers. Sorry Harry, but that's just the way we see it. We'll forgive you for not having your facts straight, as you're clearly new to the whole HD disc thing. We still love you. But...

We simply CANNOT and WILL NOT recommend to our readers that they adopt a format that only has the full support of just ONE major hardware manufacturer and ONLY A HANDFUL of the Hollywood studios - no matter how cheap the price - when a format of EQUAL quality and FAR GREATER studio and manufacturer support exists.

Unlike those who hate Microsoft or hate Sony, our position isn't personal or emotional. Unlike those who work for HD-DVD and Blu-ray connected companies, we are not getting paid for our opinions or to generate media spin. Our opinions as expressed here are simply our own logical, common sense conclusions, based on our own research and experience. (For the record, regarding our advertising: We generally accept advertising from all interested parties within certain guidelines of good taste, and our advertising arrangements have NEVER and WILL never influence our editorial opinions.)

We'll continue to enjoy HD-DVD discs and review them too, for those who may be interested. But if you want our opinion as to which HD format you should buy, unless circumstances change DRAMATICALLY, in all good conscience we simply can't recommend HD-DVD. Simply put: If you're ready to get into high-def discs... we say go Blu. In the same way that we recommended everyone chose anamorphic widescreen DVDs over the alternative, we think you'll come to appreciate this advice in the months and years ahead. 'Nuff said.

Bill Hunt, Editor
The Digital Bits
billhunt@thedigitalbits.com

MidnightWatche

Bill Hunt, LOL. He's a Sony shill, everyone knows it. HD DVD is the better tech (TrueHD and networking are mandatory!), feature complete, region free, much higher attach rates, less expensive, and the preferred format by 'neutral' studios like Warner and even Paramount. His head is so far up his butt that now he can't help but to spew sh!t.

Hmmm, I wonder why he didn't elaborate that HD DVD standalone player sales have vastly outpaced those of Blu-ray standalones and the only thing keeping Blu-ray alive right now is the PS3 (which has not and will not sell the numbers that Sony has hoped), or why he didn't note that HD DVD player sales have jumped up to 10 fold at some retail outlets recently?

DVDTown: Don't Get The Blues - Say No To Blu-ray

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samcan07

A pretty good view of thing in the Dig Bits article me thinks!!!

Go Blu!!!




Makes a lot more sense than that aint it cool site.

rmslives

To be fair, that dude at Aint It Cool News had NO idea what he was talking about. EVERYONE should call him out for that.

As for what the rest of Hunt says . . . what ever. I've got 37 movies and counting to enjoy until I die! I'm 100% satisfied right now, even though I have to say I probably will be supporting both formats within a year. I'm pulling for HD DVD overall, though.

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1984

Who is going to read all that when visiting his web page?

samcan07

Me !!!

Superman

Wow. Just wow.

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borromini

A sucker born every second these days.

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tcarcio

Well then go there and read it. Do we all have to be submited to Bill's BS. If I start cutting and pasting every article that supports HD DVD in full this place becomes a nightmare. Next time just post a link not the whole damn article. Just more Blushit.....

samcan07

Well I didn't cut and paste the news. I just read it. I hadn't even been to that site. But now I know about it.

rmslives

DUDE: STOP WITH THE DAMN BOUNCING BANANAS!

Can't you go one post without using it? How can I take you seriously if every freakin' post has that stupid ass banana?!?

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HD movies thus far: Miami Vice, Batman Begins, Fearless, King Kong, V for Vendetta, The Bourne Supremacy, Poseidon, Sahara, Chronicles of Riddick: Pitch Black, Chronicles of Riddick, Serenity, The Departed, Babel, Aeon Flux, Van Helsing, Troy, Constantine, Superman Returns, MI:3, Children of Men, The Hulk, Pulse, U-571, The Mummy, The Phantom of the Opera, Smokin' Aces, The Mummy Returns, A Scanner Darkly, The Good Shepherd, The Hitcher, Eternal Sunshine of the Spotless Mind

GLOW

I read about half of that (Bill tends to ramble a bit ).... his criticism of Harry's article was spot on. I dunno who presented all these "facts" to him about the format war, but whoever they are should be shot. There are legitimate good things you can say about HD DVD and legitimate bad things you can say about Blu-ray, but he hardly mentioned any of those. "HD DVD looks better than Blu-ray", porn, BC players, blah blah blah What a moron.

Am I supposed to believe some guy that doesn't even know the basics about both formats or the guy who is immersed in the format war and knows everything? I'll take the latter, thank you.

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ClashFan

Agreed! Propaganda pieces like both of those rely on half-truths, distortion, and sometimes outright lies.

Someone on AVS wrote a great rebuttal to Hunt's piece, pointing out the half-truths. On the one hand Hunt mocked Toshiba's $299 pricing, but then later gushes about supposed $299 BR players. Hilarious irony!

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bruceames

This guy is so full of himself he's actually starting to be a comic read. Full blown Blu-ray fanboyism, proud-as-a-peacock style, makes him much less effective in swaying neutral, fence-sitting readers, then if he tried to tone it down (which for him at this point, would require great effort). Actually he's getting good publicity by doing this, and since he figures that Blu-ray will end in a stalemate in worse case, he figures there's no risk in sticking his neck out.

But really, he would be much more persuasive if he didn't come accross as a pompous, hardcore fanboy.

BTW, didn't he get the memo about Universal wanting to drag out the war? (Universal said the format war is good for consumers just last week, which means forget about it Blu-ray).

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borromini

That's just it...you're not suppose to take him seriously.

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