Warner Goes Blu - will drop HD-DVD by May 2008

[Woochifer]

Just announced within the hour, Warner will officially support only Blu-ray after May 2008. This is a potentially fatal blow to the fortunes of HD-DVD, as Warner holds by far the largest market share of the HD optical disc market, and has been the #1 distributor of HD-DVD titles since the format's inception. With Warner's announcement, Blu-ray now has an exclusive hold over four of the six major studios, which together control over 2/3 of the market. Looks like this also means that Warner's TotalHD hybrid disc format, which was announced to much fanfare at last year's CES, will never come to market.

http://www.usatoday.com/tech/product...-blu-ray_N.htm

Here's Warner's press release:

In response to consumer demand, Warner Bros. Entertainment will release its high-definition DVD titles exclusively in the Blu-ray disc format beginning later this year, it was announced today by Barry Meyer, Chairman & CEO, Warner Bros. and Kevin Tsujihara, President, Warner Bros. Home Entertainment Group.

"Warner Bros.' move to exclusively release in the Blu-ray disc format is a strategic decision focused on the long term and the most direct way to give consumers what they want,"" said Meyer. "The window of opportunity for high-definition DVD could be missed if format confusion continues to linger. We believe that exclusively distributing in Blu-ray will further the potential for mass market success and ultimately benefit retailers, producers, and most importantly, consumers."

Warner Home Video will continue to release its titles in standard DVD format and Blu-ray. After a short window following their standard DVD and Blu-ray releases, all new titles will continue to be released in HD DVD until the end of May 2008.

"Warner Bros. has produced in both high-definition formats in an effort to provide consumer choice, foster mainstream adoption and drive down hardware prices," said Jeff Bewkes, President and Chief Executive Officer, Time Warner Inc., the parent company of Warner Bros. Entertainment. "Today’s decision by Warner Bros. to distribute in a single format comes at the right time and is the best decision both for consumers and Time Warner.''

"A two-format landscape has led to consumer confusion and indifference toward high definition, which has kept the technology from reaching mass adoption and becoming the important revenue stream that it can be for the industry," said Tsujihara. "Consumers have clearly chosen Blu-ray, and we believe that recognizing this preference is the right step in making this great home entertainment experience accessible to the widest possible audience. Warner Bros. has worked very closely with the Toshiba Corporation in promoting high definition media and we have enormous respect for their efforts. We look forward to working with them on other projects in the future."

[Sir Terrence the Terrible]

Just announced within the hour, Warner will officially support only Blu-ray after May 2008. This is a potentially fatal blow to the fortunes of HD-DVD, as Warner holds by far the largest market share of the HD optical disc market, and has been the #1 distributor of HD-DVD titles since the format's inception. With Warner's announcement, Blu-ray now has an exclusive hold over four of the six major studios, which together control over 2/3 of the market. Looks like this also means that Warner's TotalHD hybrid disc format, which was announced to much fanfare at last year's CES, will never come to market.

http://www.usatoday.com/tech/product...-blu-ray_N.htm

Here's Warner's press release:

This is what I get for being in a meeting. You beat me by 8 minutes. I really wish I could have reported this when I first found out. So you get reddies for beating me ya bum!!!

[Woochifer]

Wow! This announcement has caused a seismic disturbance on the High Def Digest message board -- 16 pages of responses to this news in less than two hours! I can only imagine what's going on at the AVS Forum.

This is not like the Paramount/Dreamworks announcement, which basically brought HD-DVD closer to parity with Blu-ray. This is the defection of HD-DVD's top selling studio, one of the format's early champions, and the only remaining major neutral studio. Warner has been in a tight partnership with Toshiba since the two companies successfully developed and marketed the DVD format. This split is significant.

I think it might only be a matter of time before Universal goes neutral, and Paramount/Dreamworks follow suit after the clock runs out on their HD-DVD deal.

[Woochifer]

This is what I get for being in a meeting. You beat me by 8 minutes. I really wish I could have reported this when I first found out. So you get reddies for beating me ya bum!!!

Bring 'em on, T-boy! You're just daring me to fire off another greenie at you, aren't you?

[L.J.]

YES!!!!!!! It's about time. So sick of this stupid war.

Great, and I can already imagine what Pix is gonna say

[Sir Terrence the Terrible]

Wow! This announcement has caused a seismic disturbance on the High Def Digest message board -- 16 pages of responses to this news in less than two hours! I can only imagine what's going on at the AVS Forum.

This is not like the Paramount/Dreamworks announcement, which basically brought HD-DVD closer to parity with Blu-ray. This is the defection of HD-DVD's top selling studio, one of the format's early champions, and the only remaining major neutral studio. Warner has been in a tight partnership with Toshiba since the two companies successfully developed and marketed the DVD format. This split is significant.

I think it might only be a matter of time before Universal goes neutral, and Paramount/Dreamworks follow suit after the clock runs out on their HD-DVD deal.

Wooch,
Paramount has an out clause, so I do not think they will be finishing out their contract with the HD DVD PG. I am going to call my friends and sources there and see If I can get more info on this.

I wonder how Amir is taking this news. He is probably at the Golden Gate by now.

I just got out of a meeting with the home video department. It looks like Disney is going to ramp up its releases in leu of the good news. However I just sold my soul to the devil as I will be working alot harder than I want to. They have decided that all releases will have a hometheater mix treatment.

[GMichael]

YES!!!!!!! It's about time. So sick of this stupid war.

Great, and I can already imagine what Pix is gonna say

He's going to say that he told us all so and that we should have listened to him.
It's a great strategy of his. Spout off randomly in every direction and eventually he'll be right about something. Even if half the time he's contradicting himself.

Good news for BR fans. Bring on the HD.

Thanks Wooch,
You too Sir T. (Here, you can have your sword back)

[Rich-n-Texas]

So what happens next? Blu-ray player prices skyrocket?

He's going to say that he told us all so and that we should have listened to him.
It's a great strategy of his. Spout off randomly in every direction and eventually he'll be right about something. Even if half the time he's contradicting himself.

Ha ha ha ha ha!!!

Maybe I was wrong about what I said earlier GM...

[kexodusc]

Man, didn't Microsoft dole out a ton of cash to try and buy studio support just 2 or 3 months ago? That's gotta suck...millions spent, now rendered ineffective.

[Sir Terrence the Terrible]

I just got off the phone with my buddy from Paramount. They are spitting up blood, slashing wrist, and the ones still standing are waving hankeys over the ones that passed out.

Alot of the rank and file are absolutely furious at the company heads for going HD DVD exclusive. The engineers really liked the format alot, but it looks like the head honchos liked the money more. What they are telling me now is that Paramount will honor their contract with HD DVD, but that is subject to change at any time because they have a out-clause that allows them to go neutral if events change in bluray favor, or they do not meet the million player goal they promised them.

[Woochifer]

Man, didn't Microsoft dole out a ton of cash to try and buy studio support just 2 or 3 months ago? That's gotta suck...millions spent, now rendered ineffective.

It was Toshiba that apparently handed $150 million to Dreamworks and $75 million to Paramount. Rumors were flying like crazy regarding Microsoft's role, but they've never been directly linked to any cash payouts. Supposedly, MS' role was to provide free tech support and developer tools basically to steer those studios towards using the VC-1 codec.

At that time, Toshiba had to make a dramatic move of some kind just to keep its format afloat through the holiday buying season. A lot of the analysts had already projected that HD-DVD's obituary would come out at CES. Bringing Paramount and Dreamworks to the HD-DVD side simply reduced Blu-ray's lead, but did not eliminate it altogether. And even during those weeks when HD-DVD's biggest exclusive releases came out, the format still could not outsell the Blu-ray discs.

If anything, this Warner move puts HD-DVD back in the same, if not worse, position they were in prior to the Paramount/Dreamworks announcement. And from a perception and morale standpoint (important consideration in a consumer-driven market), Warner is the one studio that HD-DVD supporters had counted on the most. How do they now perceive the HD-DVD format with Warner counting down the weeks before they exit the market? I guess that Toshiba's payout to Paramount/Dreamworks ensured that HD-DVD would not die altogether at the conclusion of the holiday shopping season, but things stand, I don't see how the format can survive too far past the summer. The only move left that can ensure that the format war drag out through next year would be to switch either Disney or Fox to HD-DVD, but that seems highly unlikely.

The rumors spinning right now are speculating on the amount that Sony and its Blu-ray partners had to pay Warner to get them to dump HD-DVD. One figure that I've seen is $450 million and supposedly the HD-DVD side had offered $375 million. But, again those figures are totally unsubstantiated rumors, but they're in circulation. Quite a bit of coin, but whatever they did, the Warner move basically puts HD-DVD on borrowed time.

I don't see how HD-DVD can hold onto its studio partners after the existing agreements expire, with the strongest member of their team now defecting to the Blu-ray side. The pressure was already building on Universal last year to go neutral. With Warner no longer neutral, I would think that the pressure is now on Universal to switch sides altogether.

[Sir Terrence the Terrible]

It was Toshiba that apparently handed $150 million to Dreamworks and $75 million to Paramount. Rumors were flying like crazy regarding Microsoft's role, but they've never been directly linked to any cash payouts. Supposedly, MS' role was to provide free tech support and developer tools basically to steer those studios towards using the VC-1 codec.

At that time, Toshiba had to make a dramatic move of some kind just to keep its format afloat through the holiday buying season. A lot of the analysts had already projected that HD-DVD's obituary would come out at CES. Bringing Paramount and Dreamworks to the HD-DVD side simply reduced Blu-ray's lead, but did not eliminate it altogether. And even during those weeks when HD-DVD's biggest exclusive releases came out, the format still could not outsell the Blu-ray discs.

If anything, this Warner move puts HD-DVD back in the same, if not worse, position they were in prior to the Paramount/Dreamworks announcement. And from a perception and morale standpoint (important consideration in a consumer-driven market), Warner is the one studio that HD-DVD supporters had counted on the most. How do they now perceive the HD-DVD format with Warner counting down the weeks before they exit the market? I guess that Toshiba's payout to Paramount/Dreamworks ensured that HD-DVD would not die altogether at the conclusion of the holiday shopping season, but things stand, I don't see how the format can survive too far past the summer. The only move left that can ensure that the format war drag out through next year would be to switch either Disney or Fox to HD-DVD, but that seems highly unlikely.

The rumors spinning right now are speculating on the amount that Sony and its Blu-ray partners had to pay Warner to get them to dump HD-DVD. One figure that I've seen is $450 million and supposedly the HD-DVD side had offered $375 million. But, again those figures are totally unsubstantiated rumors, but they're in circulation. Quite a bit of coin, but whatever they did, the Warner move basically puts HD-DVD on borrowed time.

I don't see how HD-DVD can hold onto its studio partners after the existing agreements expire, with the strongest member of their team now defecting to the Blu-ray side. The pressure was already building on Universal last year to go neutral. With Warner no longer neutral, I would think that the pressure is now on Universal to switch sides altogether.

Wooch,
The figure was not that high at all. I know for a fact that it was not $450 million dollars. If anyone believes that it was the money, does not understand this business at all. This was not a Paramount/Dreamworks type situation. Warner saw their neutral stance as a format killer in the long run. Hence the statement that the format was creating consumer confusion and apath. While Warner was making the most money from bluray/HD DVD, they knew this was not sustainable.

I have been hearing for weeks this was going to happen. And what drove this point home was the fact that a Toshiba Representative made three trips from Japan to Los Angeles to meet with Warner. They apparently offered Warner alot more than $375 million, but Warner believed that the end of this war would yield far more than this amount for them over the long run, and going exclusive with the format that already had the momentum was advantageous to them. I did hear that some thin air offers(huge sums of money) were on the table from both camps these last weeks. But ultimately it was the resolution of the war that really got Warner to bite. The money did help however, but in the end it was not $450 million.

Right now the rumor line is on fire. I have now heard from six of my former colleagues and friends from film school that work at various studios that more movement towards blu is coming very quickly. I already posted right here that Universal has been touring BR replication facilities in the last year, and certainly in the last couple of weeks. I heard that Universal was planning to go neutral pretty soon, and is making plans as we post to do just that. They knew of the Warner deal a couple of weeks ago, I heard about it at the same time. From what I am hearing through the grape vine, Paramount/Dreamworks and Universal will make this move before the end of the year so they can benefit from Christmas sales of their titles for next year. I personally believe(but cannot confirm) that Universal will be the first.

I do not believe this war was good for the industry, even if it was good for consumers. Just imagine where we would be if everyone united behind Bluray. We would have had far more titles released, far more players on the market, though I do not think that players would have been as cheap as they are.

[drseid]

I guess I have to eat that humble pie from my incorrect prediction last year. ;-) I literally just heard the news a few minutes ago as I have been on a business trip (and I guess isolated from world news).

I would say this does it for HD DVD, and I too would expect other studios to follow, as Warner was a *critical* studio for the format.

I have heard various rumors (from sources of low-reliability, I might add) of a payout on the BR side of as high as 500 million, but similar to the HD DVD rumors at the time of the Paramount deal, I am sure there may be *some* truth in the rumors but not the whole story by any means. My guess is it was a very substantial payout (whatever the number assuming one was made), but HD DVD would have done the same, so I can hardly blame the Blu-ray folks for wanting to and succeedingly dealing a body crushing blow to HD DVD for whatever action or sum was used.

Guess I'll just have to feel a bit Blu, and switch my buying preferences now that Blu-ray has pretty much won the format "war."

Consider this about as much humble pie I can stomach for one day. ;-)

---Dave

[Woochifer]

Looks like the dominoes will start falling in short order at CES. HD-DVD's news conference at CES originally scheduled for Sunday has been "postponed." Considering that this was supposed to be the event that lays out the hardware and release roadmap for the next several months, this could be a sign that HD-DVD's demise will come sooner than later.

Blu-ray's news conference at CES last year was where they declared victory. I thought it was premature at that time, but if they made the same announcement this year, it would definitely not be premature with Warner's announcement.

[BRANDONH]

So what happens next? Blu-ray player prices skyrocket?

Good question.
I am Format neutral for I have a duo player on the way.
For me it will make no difference which format wins I will be able to play them both.

But at the same time Its like saying it's silly to have more than one automobile manufacturer whether it be a Ford or a Chevy etc.
Take away the competition and you have a monopoly.

Which makes me think the announcement seems a bit premature since there are now 3 dual format players.
IMO with the eventual availability of less expensive duo players it could have ended the format war.

If this is indeed the end of HD DVD then Blu-Ray will not have any competition, so there will be no reason to offer the consumer a lower price for the player or the disc.

At first I too thought the two formats was silly... from a consumer point of view
But what about the Manufacturers point of view?

From what I understand the HD DVD does not require any special retooling to manufacturer so the manufacturers of SD DVD can still make both discs from the same plant.
and that to Blu-Ray discs require a totally different manufacturing process requiring retooling to make those discs and that the Blu-Ray is a lot more expensive to make.

Sounds like the SD DVD manufacturers who are also now manufacturing HD DVD will be forced to stop making SD DVD or stop making HD DVD and/or add a completely new production line to the plant to make Blu-Ray.
I believe this could cause the price to stay high for Blu-Ray and a possible increase in the SD DVD as well.

[kexodusc]

Take away the competition and you have a monopoly.

Which makes me think the announcement seems a bit premature since there are now 3 dual format players.
IMO with the eventual availability of less expensive duo players it could have ended the format war.

If this is indeed the end of HD DVD then Blu-Ray will not have any competition, so there will be no reason to offer the consumer a lower price for the player or the disc.

At first I too thought the two formats was silly... from a consumer point of view
But what about the Manufacturers point of view?

Competition isn't going to suffer as bad as you think. Instead of very few companies offering one of HD-DVD or BluRay (or a limited selection of both), you'll start to see a lot of companies competing fiercely for BluRay. We saw this exact same thing with DVD once it finally emerged as the clear winner.

I'm sure Toshiba already has a BluRay player in development, just in case.

As for production costs, they probably are a bit higher in the BluRay camp, but negligible over several years of product life and billions of discs sold. Prices on players and discs will drop when Walmart, BestBuy, Amazon, and all your local movie/electronics stores start fighting for all your BluRay business. They had to fully commit to carrying a product for that to happen, and if HD-DVD is indeed dying, there's less risk committing now.
This is a good thing for the end-consumer, except the early adopters who picked HD-DVD or hedged their bets by purchasing both formats.

Prices should fall as the economies of scale grow. This has been the model in the industry for decades.

[musicman1999]

Why could they have not done this before the boxing day sales, when i became format neutral by buying a HD-DVD player.

bill

[Groundbeef]

Well, I guess I'll just wait until MS announces a BR player for the 360, and I'll pick it up.

I know it won't count as an actual BR player, but it'll play BR disks all the same.

They have previously announced that it would not be out of the question if HD-DVD dies, and it seems that's coming pretty soon. I just hope I get my 5 free movies before the format dies.

[L.J.]

Dean said it took 4 months to his 5 free. Some have reported getting theirs in as early as 5 weeks though. It's been about 2 months for me and I'm still waiting.

[pixelthis]

He's going to say that he told us all so and that we should have listened to him.
It's a great strategy of his. Spout off randomly in every direction and eventually he'll be right about something. Even if half the time he's contradicting himself.

Good news for BR fans. Bring on the HD.

Thanks Wooch,
You too Sir T. (Here, you can have your sword back)

Sore loser.
There is no "strategy", just knowledge.
The bad thing about being new to a board like this is that the members think you're therefore new to the world.
I have seen this thing countless times, its pretty easy to predict.
Only the clueless like groundbeef and a few other HD fanboys are gonna be surprized
by this. Even tosh knew that their days are numbered, and are trying to get out with as
many fingers and toes as possible, have been for quite some time.
I just wonder how I have "contradicted" myself. I have been pretty consistent in saying that this war is just about over, I was rather conservative about the time frame, I actually thought it would be more like summer of 2 double ought 8 when HDdvd would join the eight track tape players of the world in attics across the country.
Even tho this technically doesnt mean an eNd to HDDVD, ONLY THE MOST fannatical of supporters dont now see the writing on the silver disc.
Midway was the actual end of WWII in the pacific theater, not the nuking of two cities.
After the US sunk four japanese aircraft carriers with an outmatched task force, it was all but over.
This is Toshibas MIDWAY. The only question is, will they be gracious about it?
Just ignore the fact that their moribun format is dead in the water, like matshuhita did with
DVDAUDIO, refusing to aknowledge defeat?
ANYWAY, kudos to warner for the swift swordthrust into the sternum, this action will end a costly debacle, and save consumers millions, not to mention speed up the time that we can all get our stuff on Blu-ray. Whats really nice is that the public choose, and they choose the more technically advanced and robust format with the best chance for a future, the good guys won, and that is a rare enough thing in this business.
ANYWAY, Groundbeef, I know where you can get some quikcrete to pour into that future "boatanchor" of yours

[diggity]

woohoo,

for once one of my purchasing gambles may have paid off !!!!!!!

[Groundbeef]

ANYWAY, Groundbeef, I know where you can get some quikcrete to pour into that future "boatanchor" of yours

Do you think I'm invested in HD-DVD or something? I own the 360 addon ($149) and have 5 movies. I hardly consider my "investment" a boat anchor. If anything you ought to direct your comments to Sir T. He owns over 100+ HD-DVD titles.

I'll just wait until the 360 offers a BR add-on and get it.

But you can stick your snarky comment up your uneducated, unintelligible, and horribly uninteresting ass.

[L.J.]

I don't have too much invested in HDDVD. My A2 was only $99 and I recently got in on some of those B1G1 sales which brings me to only 7 titles. I'm at about $200 invested total. Maybe I'll move it into my bedroom or up front eventually. I should have held back on jumping in with HDDVD. Dang cheap player making me pull the trigger I don't want the player taking up space just for 7 movies. I could put a xbox or wii there

[ldgibson76]

http://www.campaignhd.com/080104_Warner_Paid.html

Obviously, there's numerous sides to a story.........!
Is anyone familiar with this information and if so, does it hold water?!
I recognize that the info is from a HD DVD friendly source, but I do think it deserves consideration.
It's evident that some seem underestimate the influence the money had on the Warner/Fox decision.


Regards.

[Sir Terrence the Terrible]

http://www.campaignhd.com/080104_Warner_Paid.html

Obviously, there's numerous sides to a story.........!
Is anyone familiar with this information and if so, does it hold water?!

It doesn't hold a sip of water. Warner was not paid anywhere near $500 million. This is nothing more than Toshiba's sour grapes because they made an offer this size and it was turned down.

I also have confirmed this whole notion about Fox going HD DVD is a farce. Warner told Toshiba that if another studio does not come with them, there is no point in going exclusive to HD DVD. Toshiba approached Fox, and they were rebuffed by Fox. Keep in mind, Fox asked for region coding and extra protection from piracy, and the DVD forum turned them down. So why would a company that asked for two important changes that was turned down suddenly want to switch sides to a less protected non region coded format? It doesn't make sense. The Fox insider at Bluray.com has already stated its a lie.

This is nothing more than Toshiba trying to demonize Warner for making the switch that has cost them millions of dollars in losses and future royalties from patents. Sour, sour, sour grapes from Toshiba.