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[CES] Why did Warner Switch to Blu-ray?

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Old 01-09-2008, 07:23 AM   #1  
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Default [CES] Why did Warner Switch to Blu-ray?

Warner Bros Entertainment Inc has decided to support Blu-ray. The next-generation DVD war that flared up in the spring of 2006 entered a new phase immediately after 2008 began.

Next-generation DVD formats emerged with the first compatible players in the spring of 2006 and entered into full-scale adoption in 2007, with unit sales of players and packaged media growing significantly compared with the previous year.

Greeting 2008, Nikkei Electronics summarizes the trends in the next-generation DVD war through the end of 2007, based on announcements from supporters of both formats. The graphic data in this article was shown by the Blu-ray Disc Association at the 2008 International CES.

With Toshiba Corp releasing the "HD-A2" low-priced player temporarily at US$99 in November 2007, for example, HD DVD players saw unit sales sharply grow through strategic pricing, which manufacturers apparently implemented being aware that they could end up with a loss. Cumulative HD DVD player sales in the US reportedly reached roughly 1 million units, including external players for the Xbox 360.

On the other hand, cumulative sales of BD players are only about 500,000 units. Combined with PlayStation 3 (PS3) sales of around 3.5 million units, however, total sales reach about 4 million units and overwhelm those of HD DVD on a simple calculation basis.

The BD player sales must, however, reflect the fact that many consumers purchased the PS3 for the purpose of playing videogames. Some say PS3 users that usually use the PS3 as a BD player are less than a 1/4 of all users. If it were a 1/4, BD players substantially penetrating today are about 1.4 million units. Hence, in the competition of hardware penetration, HD DVD is not at all inferior to BD.

How about the sales of packaged software then? As of January 2007, some forecast "Blu-ray media will leave HD DVD media far behind in sales " on the expectation that the PS3 will gain significant market share. In fact, however, there has been little variation in monthly sales with BD accounting for 60% and HD DVD constituting 40% of them, and both formats have never led the other by a large margin thus far.


Did antagonism between two formats cause Warner to take action?

Warner has provided its content in both Blu-ray and HD DVD formats thus far, taking an opportunistic stance. Why has the company decided to support Blu-ray while the two formats are still competing with each other? On the Internet, various rumors, including one about money changing hands, are swirling around.

However, it would have been a superficial issue even if a large amount of money had been transferred to Warner. I think the fundamental reason why Warner has decided to support BD lies exactly in the antagonism between BD and HD DVD, which is described above.

Currently, DVD sales in the US are slowly declining at an annual rate of 3 to 4%. To compensate for decreased DVD sales, the industry must establish the next-generation DVD market as soon as possible. To meet this goal, the industry should standardize a format and stop confusing consumers. Many of US movie companies including Warner must be considering in this way.

As explained above, however, supporters of Blu-ray and HD DVD are still in competition with each other, which is not likely to end soon. Warner must have wondered how it could help the industry standardize on a format.

The answer was simple. As long as most of the movie studios on the Blu-ray side wouldn't cross over to the HD DVD side, Warner could only become a Blu-ray supporter itself, changing the momentum.

Warner actually announced its support for BD at the right time, where it could give the heaviest possible damage to HD DVD supporters. It was just before the 2008 International CES. The HD DVD Promotion Group, an organization promoting the HD DVD format, was forced to call off its press conference scheduled for the CES, letting the public notice how badly HD DVD supporters were shaken by the news.

Under the current circumstances, where the market shares of the players are offsetting the others across the supporter groups, it is difficult to anticipate that the format competition will be over soon. However, it is apparently sure that the next-generation DVD war is likely to fluctuate widely for quite a while depending on US movie companies' reaction to Warner's move.

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Old 01-09-2008, 11:09 AM   #2  
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Currently, DVD sales in the US are slowly declining at an annual rate of 3 to 4%. To compensate for decreased DVD sales, the industry must establish the next-generation DVD market as soon as possible. To meet this goal, the industry should standardize a format and stop confusing consumers. Many of US movie companies including Warner must be considering in this way.

As explained above, however, supporters of Blu-ray and HD DVD are still in competition with each other, which is not likely to end soon. Warner must have wondered how it could help the industry standardize on a format.

The answer was simple.
That's just a guess but it seems logical.

WB wanted to end the war.
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Old 01-09-2008, 03:16 PM   #3  
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So, is the war over?
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Old 01-09-2008, 04:14 PM   #4  
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I have to eHDMI, that is a very good analysis of the situation. While the HD-DVD format uses VC-1 (or whatever it is, which from what I understand is a better encoding method than MPEG-2, Blu-Ray) I would really like to see this format war end because it will make getting into the HD movie era easier. Right now I refuse to buy a next gen DVD player because I do not want to get screwed over by this war. I've also significantly decreased the amount of DVDs I've been buying so that I won't have to rebuy movies in the HD format when I eventually convert.

So again, very good analysis eHDMI and you bring up very good points.

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Old 01-10-2008, 04:25 AM   #5  
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Originally Posted by Shark2k View Post
I have to eHDMI, that is a very good analysis of the situation. While the HD-DVD format uses VC-1 (or whatever it is, which from what I understand is a better encoding method than MPEG-2, Blu-Ray) I would really like to see this format war end because it will make getting into the HD movie era easier. Right now I refuse to buy a next gen DVD player because I do not want to get screwed over by this war. I've also significantly decreased the amount of DVDs I've been buying so that I won't have to rebuy movies in the HD format when I eventually convert.

So again, very good analysis eHDMI and you bring up very good points.

-Shark2k
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MPEG2 was used on some early releases of BD - since then they have used the much better codec.
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Old 01-10-2008, 08:02 AM   #6  
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I have to eHDMI, that is a very good analysis of the situation. While the HD-DVD format uses VC-1 (or whatever it is, which from what I understand is a better encoding method than MPEG-2, Blu-Ray)

Blu-ray also uses VC-1
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Old 01-10-2008, 08:10 AM   #7  
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Originally Posted by Shark2k View Post
I have to eHDMI, that is a very good analysis of the situation. While the HD-DVD format uses VC-1 (or whatever it is, which from what I understand is a better encoding method than MPEG-2, Blu-Ray) I would really like to see this format war end because it will make getting into the HD movie era easier. Right now I refuse to buy a next gen DVD player because I do not want to get screwed over by this war. I've also significantly decreased the amount of DVDs I've been buying so that I won't have to rebuy movies in the HD format when I eventually convert.

So again, very good analysis eHDMI and you bring up very good points.

-Shark2k
Actually you can find all three codecs MPEG2 / AVC / VC1 on both formats. HD DVD tends to use VC1, Blu-ray both MPEG2 and AVC.

MPEG2 is not as efficient for compression as both the newer codecs. But with enough bandwidth available and the same care during the transfer/mastering process, it looks just as spectacular as the newer codecs imo. Its just a space hog, but BD has space to burn.
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Old 01-10-2008, 10:43 AM   #8  
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Why? Two words:

Short Sighted
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Old 01-14-2008, 08:46 AM   #9  
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Why? Two words:

Short Sighted

I disagree. At the end of the day, there's no real difference between HD DVD and Blu-ray. They are simply discs that hold computer files, and the computer inside the console reads the files to convert them to hi-resolution graphics.

Whether HD or Blu-ray won would make no real difference in the long term (talking 2020 here).
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Old 01-16-2008, 06:47 PM   #10  
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Responding to published reports that its commitment to backing HD DVD exclusively has ended, Universal has issued a new statement of support for HD DVD.

"Contrary to unsubstantiated rumors from unnamed sources, Universal's current plan is to continue to support the HD DVD format," said Ken Graffeo, executive vice president of HD strategic marketing for Universal Studios Home Entertainment and co-president of the HD DVD Promotional Group.

Graffeo's comments follow a report in yesterday's Variety that Universal's agreement to exclusively support HD DVD had ended and had not been renewed. The report went on to speculate that both Universal and Paramount could switch sides soon, ending the high-def format war instantly.

A Universal spokesperson told us this afternoon that the studio plans to issue new upcoming HD DVD title announcements in the near future.

The HD DVD Promotions Group is also said to be planning its own statement regarding the rumors of a Universal switch to format neutrality.
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Old 01-19-2008, 09:37 AM   #11  
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This article is typical bull! Is't anyone bothered by the fact they, Warner, have just chosen for you. If they are going to dictate what we buy, then let Them invent, develop, and manufacture it as well.
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Old 01-19-2008, 12:31 PM   #12  
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This article is typical bull! Is't anyone bothered by the fact they, Warner, have just chosen for you. If they are going to dictate what we buy, then let Them invent, develop, and manufacture it as well.
So whoever put out the Bourne series isn't chosing for me?
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Old 01-19-2008, 12:36 PM   #13  
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Old 01-19-2008, 01:43 PM   #14  
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Originally Posted by electrictroy View Post
That's just a guess but it seems logical.

WB wanted to end the war.
You have got to be kidding. Do you really think it was something so magnanimous? If they indeed wanted to end the war, money is the motivation
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Old 01-19-2008, 02:43 PM   #15  
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Actually this could be very good for Warner Studios, they managed to get a $500 million payoff to declare their exclusive support for Blu-Ray with an escape clause that Blu-Ray must meet certain requirements for it to remain in effect, specs and sales both.

Now say Blu-Ray is unable to fulfill their promises, then Warner has a nice big pile of money that will certainly offset any funds they've invested in trying to get HDM off to a good start.

They want this in order to eventually replace DVD which while still a "Cash Cow" is slowing down, they could then just cut their losses and sit back and wait to see if anything new crops up that will offer another chance to replace DVD.

Or if they felt HD DVD truly did have the best chance to succeed then they could re-establish support of it and have a great big nest egg in which to do this, furnished by the BDA none the less.

A real big "Win Win" situation for Warner but unfortunately if they didn't go back to HD DVD it would end for the time being any chance of High Definition optical of replacing the SD DVD market any time soon until a new HD optical format came forward although I believe it will happen sooner or later,I just hope sooner.

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