HD DVD Rallies Consumer Audience in 2007 Driving Nearly One Million Dedicated Player Sales in North America

[film11]

Question: Does anyone have accurate fugures on the licensing fees for player and disks for the two main contending formats? Thanks, Dale

Not 100% certain, but got this info from a Sony rep. The costs included for producing a Blu-Ray disc for replication can start at around $26,500. This number includes the following: $5.00 USD Per disc Replication fee (min: 2,500 ) $1,500 USD AACS fee. Not a big deal for studios, but might be pretty expensive for indie/low-budget filmmakers, since they can get a movie added to OnDemand for less (don't know the exact figure) than that! That's why BR will never be a format for film aficiandos, at least until costs come down.

[allchemie]

I think most people have a large misconception about the movie studios. They know the past success of the dvd was due to having one accepted format. They know the people they deal with that sell their movies and discs. More than any sane individual, these mega stores and outlets want one format to maximize profit per square foot of store space, rather than splitting their rack space into 2, 3, or even 4 of the same or similar performing formats.

The studios don't want to screw the customer--they rely on them. But other than the movie theatres, they rely on sales outlets to make them more money on the after initial release market. They know it will cause mega store anxiety and likely cause them to pick a format when the studios don't do it first.

These stores read the sales of discs and see that despite the monumental lower costs of HD machines the Blu Ray discs still outsell them. Notice that Target has just decided to go Blu Ray because they want less customer confusion, they sell a lot of Sony PS3's and games already, and that disc rack space is at a premium. All the studios get strong feedback from the mega stores, one way or another.


Even though Warner Bros has opted to go Blu Ray, Paramount still says it will support HD. But it has in its contract that it can opt Blu Ray if Warner bros. goes that way. I would bet it won't be long before Paramount goes Blu Ray while fulfilling the series and some movie releases in HD. Toward the end of 2008 I would bet there will be no more HD releases fromParamount. Thiswould give Blu Ray over 80% of the market.

I truly don't care who "wins", but it seems obvious with the pending recession andhow much the studios rely onm disc sales for 50% of their profit, I have a hard time believing that the rest of the studios by 2009 will be Blu Ray.

It just makes business sense in not being marginalized and not having many stores selling their product, except maybe through amazon.

My timing may be off--it may happen faster or slower--but it appears inevitable. This is just strictly a business observation.

Greg

[pmalter0]

Greg:
You seem to know more about the Hd disc business and the law than anyone else here, or apparently anywhere else; how did you come upon all that knowledge?
Phil

[allchemie]

Phil-

I have two relatives in the studio business--one at Paramount and the other at Warner Bros. They both explained to me how these basic negotiations go on. When huge rental outfits like Netflix tell them that only 0.3% of the discs they rent out are Hi-Def it gives the studios heartburn. They all realize that while there are no guarantees in life, the best chances for the Hi-Rez discs to succeeed will be with one format. Both Warner and Paramount originally started with Toshiba, thinking the simplicity of production and Microsofts coding involvement seemed to give HD a large edge.

But when they saw how many Blu Ray discs are being bought by PS3 gamers along with other users and possible advantages to not having to be in bed with Microsoft Warner was first to take the leap. Paramount still espouses HD support, but my uncle at Warners tells me Paramount is only waiting to fulfill contract obligations and will be looking for a proper time to go Blu Ray.

How many times have we seen the owner and GM of a baseball team say I support my manager, only to fire them at the end of the season. I would take Paramounts wishy-washy HD proouncements with less than a grain of salt. They don't want to be marginalized. Thay all know that 99% of people still buy dvd's and the only chance for a REAL success in HD disc area is for one format.

It is liokethe ring in Lord of the Rings. "One Format to rule them all, One Format to find them, One Format to bring them all and in the darkness bind them."

Greg

[Dale]

Years ago (1990 if memory serves me correctly) when HDTV itself was peaking up over the horizon I held a large HDTV conference in New York City. I had several of the studios there, most of the manufacturers, and the big retailers. At that time we didn't have the DVD as yet so we talked about tape formats with the same focus -- "get to one standard or format as that beats all other business options". There was a industry-wide committee formed a year or so later headed up by the former CEO of RCA (Dr. Joseph Donahue) and that committee "standardized" a single tape format for HDTV, but by the time that was ratified (and it was by all major players) the DVD was clearly seen as a new comer. The tape format was put away and used later in some of the digital cameras but never introduced as a serious product for pre-recorded movie market. But I remember from that conference and various interviews with the stuidios, both then and recently, that the same thing being said above by Phil was said then--"get us to one format so we don't have retail shelf space conflict/costs nor consumer confusion".

Another argument one hears in support of a single format over two is that with one you avoid a proliferation of standards trying to best the chief contenders. We see this today with the red laser entry. There are others in China trying to get attention.

Perhaps when/if online sales replace those made in brick and mortar the number of formats can expand without a great anxioty being felt in the industry. But that is speculation. What is far less speculative is the present day advantage there is to all for having one format in the marketplace for each category of product. It is painful to the loser of a good contest but that is the outcome of a contest. Mark Knox, who was until recently the chief spokesperson for the Toshiba camp, made it very clear in an interview with HDTV Magazine that Toshiba was not hanging its future on any HD DVD success. They are an astoundingly good technology (big) company with many things in the works that are every bit as exciting as the HD DVD and they are not to be unduely phased by a win or a loss. No doubt there is a struggle by those within the competing companues who are emotionally invested in a format, but there comes a time in such relatively small matter as a technical format for consumers when we all see that life is easier with an agreement more than it is with protracted and fruitless disagreements.

[miller]

What is far less speculative is the present day advantage to having one format in the marketplace for each category of product.

Please define "category of product". The gaming "category" has two competing formats. If game publishers want to sell their titles to the most consumers possible, they simply release in both formats. Done. Why can't the major studios simply release in both formats. The gaming indistry has been doing fine with that approach for 10-15 years. No one's complaining about the format war there.

- Miller

[akirby]

Go ask those game publishers and retailers if they would prefer one media format over 4 (PS3, Wii, Xbox, PC) and I guarantee you they'll say yes. It definitely costs more but apparently the profits of selling on multiple platforms outweighs the cost. But it's apples and oranges because each platform has something unique whether it's a particular game (Gran Turismo on PS, Mario on Nintendo, etc.) or controller or other feature.
What difference does the average consumer see when comparing HD DVD and Blu-Ray? None. Both deliver a movie in HD with surround sound.

Apples and oranges.

[Dale]

The gaming industry is not the TV industry. It attaches to the TV but it definately is a different species. By category I mean tape, disc, high definition disc, and transmission standards (over-the-air). Television is in nearly every household more so than is the telephone and for that reason a strong unifying standard is always sought, if not always achieved. _Dale

[miller]

The gaming industry is not the TV industry. It attaches to the TV but it definately is a different species. By category I mean tape, disc, high definition disc, and transmission standards (over-the-air). Television is in nearly every household more so than is the telephone and for that reason a strong unifying standard is always sought, if not always achieved. _Dale

I know the gaming industry is not the TV industry, but why are you telling me that? Does that have something to do with the answer to my question? Certainly that's not the entire answer.

Could someone please answer my question?: If the gaming industry can sustain two formats, why not home video? Please explain why they are different, other than just saying one is not the other.

If all I'm going to get here is "sour grapes", "apples and oranges" or any other kind of fruit thrown at me, I'll take my questions elsewhere.

- Miller

[akirby]

I answered it. Which part of my answer did you not agree with? Or are you just here to complain about fruit?