HD-DVD and Blu-ray battle to last years

Exclusivity moves threaten prolonging of standards battle while Sony invites Microsoft and Toshiba to join the BDA
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Recent moves in the high-definition movie market have changed the landscape of next-generation optical disc formats with analysts now warning that the battle between HD-DVD and Blu-ray could last for many years without one format emerging as leader.

The problem is being exacerbated by Hollywood movie studios who are now even more deeply divided over formats than what they were when the two first launched. Analysts cited the recent move from by Paramount and DreamWorks Animation to become exclusive to Toshiba's HD-DVD format as the major factor in stalling and reversing any lead Sony's Blu-ray format may have been beginning for form.

Pali Research analyst Rich Greenfield said Paramount's defection from Blu-Ray "alter(s) the landscape meaningfully, as Paramount is the leading theatrical distributor year-to-date."

It's something that is expected to become even more important when major blockbusters such as Transformers, Blades of Glory and Shrek the Third being released exclusively on HD-DVD with Harry Potter and the Order of the Phoenix also released on the format.

Tom Adams, president of Adams Media Research said that the periods of exclusivity being argued at the moment are symptomatic of the acceptance that neither format is going to supersede DVD anytime soon.

"It was going to be a more sedate transition in our view anyway," Adams said. "That's one reason that a period of exclusivity didn't sound too terrifying to the studios."

Adams also said that he expects HD-DVD to push ahead of Blu-ray but only slightly during 2008.

However, Price Waterhouse Cooper suggested that the problem with slow uptake is due to the fact there are two formats: "Relatively few stand-alone (high definition) players have been purchased, which suggests that the presence of two incompatible...standards could be inhibiting the market," PWC said in its Global Entertainment and Media Outlook: 2007-2011.

However, Adams said that it would be the Studios that break the deadlock, hinting that market forces may force the hands of the studios sooner rather than late. "The more positive development for the industry...would have been having the Blu-Ray-exclusive studios start releasing on HD DVD," Adams said. "We think...there's some inevitability that they will have to release in both formats."

Regards, that didn't stop Sony from openly attempting to invite Toshiba and Microsoft to join the Blu-ray Disc Association.

"We would love to have Toshiba and Microsoft on board," said Don Eklund, executive vice president of advanced technologies at Sony in an interview with Pocket-lint at IFA in Berlin, Germany.

He warned though that the BDA would not enter into a price war with HD-DVD saying that no Blu-ray player was sold below cost whereas HD-DVD players are.

"The DVD format was good, but profitability only lasted for a couple of years before there was no money to be had in the hardware market," he added. "We believe consumers are smart enough to realise the benefits and pay the extra accordingly."

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