Warner Home Video’s decision to go Blu-ray-only in the high-def war sent shockwaves through the industry. But its reasoning for doing so doesn’t make sense – at first.
Warner said Friday that it was abandoning its dual support of the dueling high-def disc formats, HD DVD and Blu-ray, and going solely with the latter because consumers seem to prefer Blu-ray. But is WHV sacrificing quality for quantity? Let me explian: There’s no doubt that Blu-ray Discs have been outselling HD DVDs, largely because U.S. consumers have bought more than 3 million PlayStation 3s, the biggest-selling Blu-ray player by far and more than the entire installed user base of HD DVD players. So it’s no surprise that Blu-ray Discs have been outselling HD DVDs. The catch is that most people who buy a PS3 do so to play video games; they might buy an occasional Blu-ray movie, but it’s not a fiercely loyal audience, in general. On the other hand, people who have a stand-alone HD DVD player or the Xbox 360 HD drive have bought it solely to play HD DVD movies. Given the still-small market for high-def discs, compared with standard DVDs, it would seem to make more sense for Warner to court the consumers who offer proportionally stronger support to their chosen format, the HD DVD crowd.
But there’s the rub: The high-def market is still too relatively tiny. How small? As I pointed out a few months ago in my HD DVD vs. Blu-ray primer, the bestselling HD DVD of Transformers, in its first week, barely sold more than 2 percent (190,000 copies) of what its standard DVD counterpart did (8.3 million copies). Ouch. With a market that small, it doesn’t matter which format Warner chose to support solely, just that it made the choice. Because, as my example shows, people aren’t buying into high-def and the format war is just complicating things. Backing one format at least helps clear consumer confusion, especially since there’s no quality difference between the two incompatible formats.
So where does that leave HD DVD? Well, not on solid footing. Universal and Paramount are left as its two major content providers. DreamWorks, which Paramount distributes, is still in the mix, but it doesn’t have a big enough catalog to make much of an impact. Toshiba is the main hardware producer, but it responded to Warner’s announcement by canceling some HD DVD events at the Consumer Electronics Show, which started with press conferences today, and saying it would talk with other stakeholders to decide a future course. One of those companies is the behemoth Microsoft, but I don’t think its involvement will change anything. HD DVD could go on to become the high-def/high-capacity format of choice on the computer side without having much impact on the home-video front. The HD DVD studios might try to release some catalog heavyweights as a last-gasp effort to draw interest, but even the unlikely high-def coming of Jurassic Park, Saving Private Ryan and Raiders of the Lost Ark would just delay the inevitable. HD DVD is on life support now.
It’s still possible that both formats could co-exist like Macs and PCs, with cheaper hybrid drives rendering the battle moot. But the fact that Paramount once released films in the Blu-ray format means it’s just a matter of time before it goes back. Universal would have no choice but to follow. Sure, Paramount has a contract that mandates its HD DVD support, but Toshiba said it had some kind of contract with Warner, too, and look how that turned out.
If you bought an HD DVD player, especially during the recent price drops, figure that you got a good deal on a decent upconverting player that will make standard DVDs look sharp on your HDTV. If high-def discs remain the niche product that they have been so far, even with Blu-ray as the only one left, an upconverting player might be all you need.