Paramount and Dreamworks Go HD-DVD Exclusive

[Woochifer]

Just when it looked like the HD optical disc format war was all but over, Paramount and Dreamworks announced that they will drop their support for Blu-ray and go exclusively to HD-DVD. I've been saying all along that HD-DVD was pretty much a dead format walking unless something dramatically shifts the market structure. This clearly qualifies as a major change to the market structure.

Basically, Warner is now the only officially neutral studio left releasing titles in both Blu-ray and HD-DVD. But, given Warner's HD-DVD bias and clear motivation towards steering the market towards its hybrid TotalHD disc format, this puts the studio support on both sides nearly even, with Blu-ray still holding an advantage because of Sony/Fox/Disney's collective market share.

Obviously, there's a lot going on behind the scenes here, but it looks like now the format war will drag on indefinitely, which is not necessarily a good news for HD optical media in general. While the format war has pushed hardware prices down at a rapid rate, it has also kept consumers on the sidelines. And now it very well could wind up costing consumers more in the long run since the necessity for dual format players and/or dual format hybrid discs is more likely.

http://www.sfgate.com/cgi-bin/articl...=entertainment

[PeruvianSkies]

And this is why someone like Pixelthis can't claim that one will win over the other...there are just too many factors as this point that are happening.

[Woochifer]

And this is why someone like Pixelthis can't claim that one will win over the other...there are just too many factors as this point that are happening.

At this point after Paramount's announcement, I don't think anyone can logically claim that one format will win. It's just delusional to claim with any certainty that Blu-ray will still win outright with this kind of announcement, since it fundamentally changes how the market is laid out. In the long run, I still think that Blu-ray has the upper hand, but this kind of announcement can lead to other announcements (i.e., other studios going neutral, or other hardware makers supporting HD-DVD) that can cut into Blu-ray's advantages enough to ensure HD-DVD's survival.

Before Paramount's move though, I thought that Blu-ray was well on its way to claiming a decisive format win by early next year. Too many trends were working in its favor, and it would have taken something dramatic to change HD-DVD's fortunes. Consider this dramatic.

[kexodusc]

Wow, what a difference a day makes. Damn - I was hoping things were going to lean one way or another in time for Christmas...doubtful to happen now.

Oh well...Round 2 - Fight!

[Groundbeef]

Hmmm. Well thats good news for me. At least I know my 360 will be playing new movies for longer....

Still I hope this thing gets resolved soon enough.

On a side note, Wooch have you seen that all NEW 360's will be coming with the HDMI out. Not just the Elite line. Perhaps it should have been that way from the beginning, but now it appears that all players will have it on deck.

[Woochifer]

Well, I suspected that some kind of "behind the scenes" goings were behind Paramount's decision, and here's the short of it ...

Microsoft paid off Paramount and Dreamworks to drop Blu-ray.

Apparently, it's "promotional" considerations and prime placement on their Xbox Live service, along with free VC-1 and HDi authoring tools. Needless to say, Microsoft's intentions all along have been to sabotage the HD optical disc market long enough for HD downloading to take off, and they've obviously now played that hand.

http://www.deadlinehollywooddaily.co...vd-format-war/

Bill Hunt of the Digital Bits is not happy about this development since it ensures that the format war will linger on. I totally agree with him that this is not good for consumers, and it looks like a cash grab by Paramount and Dreamworks Animation. I also agree that now it would not be surprising to see Microsoft also put a full court press on Warner to get them to drop Blu-ray as well, which would leave the HD optical disc market back at square one -- at an impasse and DOA, exactly how Microsoft wants it. Here are the links...

http://www.thedigitalbits.com/mytwocentsa141.html#dp
http://www.thedigitalbits.com/#mytwocents

[Woochifer]

Hmmm. Well thats good news for me. At least I know my 360 will be playing new movies for longer....

Still I hope this thing gets resolved soon enough.

On a side note, Wooch have you seen that all NEW 360's will be coming with the HDMI out. Not just the Elite line. Perhaps it should have been that way from the beginning, but now it appears that all players will have it on deck.

Yup, it's a case of "about freakin' time!"

Seems that if Microsoft wants to make things more interesting, they should just integrate the HD-DVD drive into the 360 ASAP. Again, it's something they should have done a long time ago, but at this point it seems to cost them less by bribing neutral studios into dropping Blu-ray (reportedly $150 million for Paramount and Dreamworks).

[L.J.]

Any chance that HD add on thing for the XBOX will get an upgrade to handle HD audio? It only has a standard digital output right?

[Groundbeef]

Any chance that HD add on thing for the XBOX will get an upgrade to handle HD audio? It only has a standard digital output right?

It does have an optical out for audio on the current system. I must confess I am not sure if that answers your question. But now that it will have an onboard HDMI, I would assume that would cover your HD audio needs.

[Groundbeef]

Yup, it's a case of "about freakin' time!"

Seems that if Microsoft wants to make things more interesting, they should just integrate the HD-DVD drive into the 360 ASAP. Again, it's something they should have done a long time ago, but at this point it seems to cost them less by bribing neutral studios into dropping Blu-ray (reportedly $150 million for Paramount and Dreamworks).

Although I would agree that it would prop up HD-DVD more if they were to incorporate it, it would cut into the pricing advantage that the 360 is enjoying over the PS3. And although PS3/Sony has been trying to get people to belive that every PS3 has converted every user into a major Blu-Ray buyer, its not the case. I'll look up sources, but it may be as higher than 30% dont even realize the PS3 plays movies. With MS, if a consumer is buying the HD Drive, its to PLAY MOVIES. So, MS may be able to show that X players are being sold, translating directly into movie sales.

As far as "bribery" thats a bit of a loaded term. If they are out spending Sony, then shame on Sony. Seems to me that they have been caught flat footed AGAIN, and MS has just once again pulled a bit of thunder away from Sony. This has been been SOP for the past few months as Sony has lost exclusive after exclusive in the gaming realm.

They have gotten (Sony) to comfortable and appear to be riding on the good fortunes they have had in the past. Its just not working for them now. Money talks, and BS walks as the saying goes.

[Mr Peabody]

I guess if Gates can't win one way, he will buy the win. Paramount was selling more Blu-ray titles than HD-DVD so I knew it must have taken some big bucks to compensate for that. I also suspected something to hit when Onkyo came out with a $899.00 HD-DVD player.

I did see that movies directed by Spielberg were exempt from the exclusive deal.

I bought my BR player and I don't regret it because it is an incredible upconverter for SD but I am a little leary of buying a bunch of movies until this is settled. This makes the war's outcome start to look more like the SACD/DVD-A scenario. I know the differences but a stalemate will definitely hender the entire HD disc format. There's already a large amount of people who think upsampled DVD is as good, I feel they are wrong, and there's the majority who really don't care about another video format.

[L.J.]

It does have an optical out for audio on the current system. I must confess I am not sure if that answers your question. But now that it will have an onboard HDMI, I would assume that would cover your HD audio needs.

Sorry I should have been more specific. I was refering to movies. Just wondering if the Xbox with the add on will be able to handle HD audio anytime soon. The HDMI out on the 360 is for gaming only right?

[musicman1999]

Terrible news for the consumer,Paramount's switch means only Warner is dual format but how long will that last.The pressure will be on them to pick a side soon.

bill

[Groundbeef]

Sorry I should have been more specific. I was refering to movies. Just wondering if the Xbox with the add on will be able to handle HD audio anytime soon. The HDMI out on the 360 is for gaming only right?

No. Like the old saying "All roads lead to Rome" So goes the 360. Everything, is done with the console. Games, movies, CD's, all of it processed by the console. Basically the HD-DVD is a slave drive that simply reads the movie. All processing is done on board the 360 unit proper. I think that half the reason its so economical, as it really is just a slave drive.

So all audio processed on the 360 be it gaming, video, or music will come out of the HDMI, Optical Out, or audio out connection.

Does that clear it up?

[L.J.]

No. Like the old saying "All roads lead to Rome" So goes the 360. Everything, is done with the console. Games, movies, CD's, all of it processed by the console. Basically the HD-DVD is a slave drive that simply reads the movie. All processing is done on board the 360 unit proper. I think that half the reason its so economical, as it really is just a slave drive.

So all audio processed on the 360 be it gaming, video, or music will come out of the HDMI, Optical Out, or audio out connection.

Does that clear it up?

OK, makes sense now.

[Woochifer]

Although I would agree that it would prop up HD-DVD more if they were to incorporate it, it would cut into the pricing advantage that the 360 is enjoying over the PS3. And although PS3/Sony has been trying to get people to belive that every PS3 has converted every user into a major Blu-Ray buyer, its not the case. I'll look up sources, but it may be as higher than 30% dont even realize the PS3 plays movies. With MS, if a consumer is buying the HD Drive, its to PLAY MOVIES. So, MS may be able to show that X players are being sold, translating directly into movie sales.

It would cut into the 360's price advantage only if Microsoft chooses to pass the unit cost increases along to consumers, which is why I presumed that it's cheaper to pay the studios to drop Blu-ray than to add HD-DVD support to the 360 (and also a lot cheaper than the costs that MS had to write off to fix the 360's motherboard problems).

Frankly I don't see anyone saying that "every PS3 has converted every user into a Blu-ray buyer" so I don't know where you've been reading that. But, no one looking at the market objectively denies that the PS3 has given Blu-ray a decided advantage in the installed user base.

As far as "bribery" thats a bit of a loaded term. If they are out spending Sony, then shame on Sony. Seems to me that they have been caught flat footed AGAIN, and MS has just once again pulled a bit of thunder away from Sony. This has been been SOP for the past few months as Sony has lost exclusive after exclusive in the gaming realm.

As a purely self-serving business maneuver, this was brilliant on Microsoft's part. It completely blindsided the industry, which had been anticipating Universal eventually going neutral and effectively ending this format war. With Paramount (and its distribution of Dreamworks) going HD-DVD exclusive, Microsoft has basically bought time to ramp up its HD downloading model by stifling growth in the HD optical disc market. It's great for Microsoft (and maybe Toshiba), but it benefits nobody else since HD-DVD owners were already getting releases from Paramount anyway.

Bribery is a loaded term, but I think it's appropriate in this case because HD-DVD's major studio support is now entirely paid off by outside interests. Universal has been getting paid by Toshiba, Warner has a direct financial stake as a DVD and TotalHD patent holder, and now Paramount and Dreamworks are getting upwards of $150 million from Microsoft. Unless someone has information to the contrary, I haven't read anything about Sony or any of the other Blu-ray partners doing any kind of payment or in-kind considerations in exchange for studio support.

The market structure since Warner and Paramount originally went neutral in late-2005 had been setup with Blu-ray holding most of the advantages, and the sales lead that Blu-ray built up should not have been a surprise to anyone. Up to this point, Blu-ray has been outmaneuvering HD-DVD for the past 9 months, so I don't know where you get this idea that "Sony" (Blu-ray is more than just Sony) got "caught flat footed AGAIN" (how can Blu-ray get caught flat footed "again" if they have consistently outsold, outreleased, and outpartnered HD-DVD since then?). This is really the first bit of good news for HD-DVD since that time, but no denying that it's a huge coup that could very well end any chance of Blu-ray winning the format war outright.

Now, with this change in the studio support, the HD optical disc market is dangerously close to playing out the original scenario envisioned in early-2005 with the studio support evenly split, and many analysts predicting a HD quagmire with market confusion, limited consumer uptake, and both formats eventually failing as other technologies come to market. The market still can eventually go to the dual format model that Warner envisions, but going dual format includes higher costs for hardware and discs, which again impedes adoption of HD optical discs.

[Robert-The-Rambler]

As an owner of 4 HD-DVD players I'm smiling at this news giving some hope that my investment is not a waste. I was getting a bit nervous.

[PeruvianSkies]

As an owner of 4 HD-DVD players I'm smiling at this news giving some hope that my investment is not a waste. I was getting a bit nervous.

And why exactly (besides exaggeration) do you have 4 HD-DVD players???

[Robert-The-Rambler]

And why exactly (besides exaggeration) do you have 4 HD-DVD players???

I like to have HD movies wherever I might have my fanny placed and HD-DVD in bed is a wonderful thing with a nice little sound system and a 720p TV.

[PeruvianSkies]

I like to have HD movies wherever I might have my fanny placed and HD-DVD in bed is a wonderful thing with a nice little sound system and a 720p TV.

So what are the 4 rooms that you have it set up in and do you have them all connected to TV's or just the one?

[pixelthis]

As an owner of 4 HD-DVD players I'm smiling at this news giving some hope that my investment is not a waste. I was getting a bit nervous.

STAY nervous.
The logic (or lack of) of buying FOUR players from a format not yet established aside,
the fundamentals of the market stay the same.
This just means that toshiba will regain a little more investment before their "format"
tanks.
About all it means short term is a lower price for BLU players, long term it means almost nothing

[PeruvianSkies]

STAY nervous.
The logic (or lack of) of buying FOUR players from a format not yet established aside,
the fundamentals of the market stay the same.
This just means that toshiba will regain a little more investment before their "format"
tanks.
About all it means short term is a lower price for BLU players, long term it means almost nothing

Ya just don't quit do ya???

[pixelthis]

Of course the end of it all will be downloading as the primary form of "rental",
with whatever format that "survives" (if you want to call it that) the bastion of movie collectors. People are already being trained to download media with ipods, etc,
and they are already downloading movies with gameboxes and cable and the net.
I have always said that this is a THREE player war, with the third "player"
downloading, and that downloading will win.
But for a format that movie collectors will want to archive, they will go for quality
like they did for laser, and hence blu ray will "win".
But only as a format for collectors,
Downloading will win as the "format" of choice for rental, its already my format
of choice

[PeruvianSkies]

Of course the end of it all will be downloading as the primary form of "rental",
with whatever format that "survives" (if you want to call it that) the bastion of movie collectors. People are already being trained to download media with ipods, etc,
and they are already downloading movies with gameboxes and cable and the net.
I have always said that this is a THREE player war, with the third "player"
downloading, and that downloading will win.
But for a format that movie collectors will want to archive, they will go for quality
like they did for laser, and hence blu ray will "win".
But only as a format for collectors,
Downloading will win as the "format" of choice for rental, its already my format
of choice

You are indeed a true 21st Century Nostradamus!

[pixelthis]

Ya just don't quit do ya???

NOPE, and you just dont listen do ya?
Both of these "formats" are the "old" way of thinking, that in order to buy media
you have to get "physical", but the new way of thinking is why buy when what you want
is available on a server somewhere on the planet, available at a moments notice.
We just dont have the petrochemicals to make billions of shiny discs every year just so people can watch movies, downloading is already price competitive with rentals,
with the price of gas going higher downloading looks more attractive all of the time
If the two warring factions had any sense they would team up against their common
enemy, but after three and a half decades of following the electronics industry I have yet
to see anything aproaching "common sense"