Breaking News: Warner plumps for Blu-ray in format wars
04.Jan.2008
By Joshua Chaffin in New York
Warner Brothers is throwing its support exclusively behind Sony 's Blu-ray format in a move that could prove decisive in the war between next-generation DVD technologies.
Warner, one of Hollywood's largest studios and its leading player in home video, had been publishing its new high-definition DVDs in both the Blu-ray format developed by Sony and the rival HD DVD format pioneered by Toshiba .
However, Warner executives said on Friday that the studio would exclusively release its films in Blu-ray beginning in June. Warner cited a growing consumer preference for Blu-ray, particularly in Europe and Asia, and the concern that a prolonged format war was hurting all DVD sales, the studios' biggest source of revenue.
“It was clear to us that the confusion in the marketplace about the two formats was leading consumers just to stand back from both of them,” said Barry Meyer, chairman of Warner, which is a division of Time Warner.
Kevin Tsujihara, president of Warner's home entertainment group, said the decision would also benefit major retailers, including Wal-Mart, which have bristled at having to carry discs and players for both formats.
Warner's decision, on the eve of the annual Consumer Electronics Show, represents a major victory for Sony. It bet heavily on Blu-ray even as it was haunted by the loss its Betamax videotape format suffered to VHS a generation ago.
In addition to Warner, Blu-ray also enjoys exclusive support from Disney , Fox, Sony and MGM. “We expect HD DVD to die a quick death,” Rich Greenfield, an analyst at Pali Research, predicted.
HD DVD, which is less expensive to produce than Blu-ray but offers less storage capacity, has exclusive backing from Universal Pictures. Its coalition, which includes Microsoft, appeared to strengthen its position late last year when Paramount, which had supported both formats, announced a two-year agreement to solely support HD DVD.
That deal included a $150m payment for Paramount, according to people familiar with the matter, enraging rival studio executives.
Mr Tsujihara said that Warner's decision had been based on “what's best for the consumer and what's best for the industry”, and was not influenced by financial considerations.
The film industry has been desperate for an heir to the traditional DVD, sales of which have begun to fall after years of double-digit growth. The next-generation discs could also influence a bigger battle between technology giants such as Sony, Microsoft and Apple to determine how films, video and other content are transmitted to the digital living rooms of the future.
Both Sony and Toshiba lowered prices dramatically this holiday season in effort to gain traction. Blu-ray opened a narrow lead in the US in terms of titles sold. However, Warner executives pointed to its clear advantage in the UK, France, Germany and Japan.
Source: FT
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