What does Universal gain by staying HD-DVD only?

[krisztoforo]

I just can't think of any *financial* plus side for Universal to stay HD-DVD only as opposed to start releasing in Blu-Ray. Only thing comes to my mind is initial investment, but as far as I know disc manufacturing is done externally, the video/audio format is (essentially) the same, so what's the reason? With Blu-Ray clearly ahead (or at least side-by-side) they can only gain by switching. Best case for them is that both formats will co-exist and that will not get them any financial advantage (as opposed to switching).
Am I missing something here? Or are we talking about personal opinions applied at the top levels of the company instead of logical reasoning?

[Damon Payne]

Financially, there's very little to gain either way right now. The # of disc sales compared to DVD is mostly insignificant.

[krisztoforo]

Originally Posted by Damon Payne

Financially, there's very little to gain either way right now. The # of disc sales compared to DVD is mostly insignificant.

True, but having a format war is one big reason why consumers are hesitant to buy this stuff. So they (all of them) are losing money if we compare it to a situation when there is no format war (the number of high-def displays sold is skyrocketing so there is market). So Universal alone could end the format war and let the money start flowing (to all the studios).

[JTK]

At most, Universal gains a little ego stroke for themselves short term, but even that's pushing it.

Once we go outside that small little circle, we're quickly into a realm that increasingly defies even the most basic precepts of logic, common sense, and good business practices.

That being said: I just can't see Universal snubbing BD utterly through another Holiday season. I fully expect to see Universal BD's of some sort no later than in time for Christmas of 07, regardless of whatever happens on the HD-DVD side.

[Deciazulado]

Well right now Universal having 25% of the movie titles on high definition format makes them have a big piece of the HighDef pie an equal player to the other studios but as these other studios keep releasing more and more titles on Blu-ray, their slice will continue shrinking and at one point they have to either start releasing on the Blu market or just become a small High Definition Studio (and of course a DVD studio) mmm maybe thats why they have their Oreo combo cake

[JTK]

Originally Posted by Deciazulado

Well right now Universal having 25% of the movie titles on high definition format makes them have a big piece of the HighDef pie an equal player to the other studios but as these other studios keep releasing more and more titles on Blu-ray, their slice will continue shrinking and at one point they have to either start releasing on the Blu market or just become a small High Definition Studio (and of course a DVD studio) mmm maybe thats why they have their Oreo combo cake

Heh, good points.

How big a piece of the pie do Fox, Disney, MGM/UA, and everything under the Sony Pictures umbrella represent combined?

[Deciazulado]

Well I said movie titles on high def pie, and you forgot Lions Gate which adds a little more blu flavor . I always post those numbers on the apocalist. Blu-ray has 2/3rds of the movie titles pie at the moment, and without Warner and Paramount it's about 44%

But you wanted sales so I'm gonna do a very brown calculation using the 2:1 sales ratio commonly mentioned at the moment. (this is not cumulative sales, is a snapshot of the moment) and assuming each title sells like another (which you know it's not always the case )

At the moment the BDxclusiv cos. have about 40% combined, Warners 26%, Paramount 9%, Uni 11%, Weinstein 1%, all independents combined 12% of the High Def pie

As Blu-ray sales increase, Warner and Paramount remain fairly constant, while Universal shrinks

But this is very brownian, not from Videoscan or anything
ymmv

[JTK]

^^ Good notes.

[Musashi]

Originally Posted by krisztoforo

What does Universal gain by staying HD-DVD only?

Debt.

[1234abcd]

I think the market is a little small right now for Universal to worry too much about lost BD sales and they can just make it up later anyway: the sales will be waiting for them.

This is just speculation but maybe it's partly because Universal wants to ensure HD DVD survives in order to create a replication choice in a universal player world. It may be advantageous to have that choice in order to optimize cost and space concerns. What about all the existing DVD lines?

[Shadowself]

Originally Posted by bruceames

I think the market is a little small right now for Universal to worry too much about lost BD sales and they can just make it up later anyway: the sales will be waiting for them.

This is just speculation but maybe it's partly because Universal wants to ensure HD DVD survives in order to create a replication choice in a universal player world. It may be advantageous to have that choice in order to optimize cost and space concerns. What about all the existing DVD lines?

You won't get a "universal player world" until late 2008 or maybe even mid 2009 -- if HD DVD can survive that long. I have yet to see a single statistic that even implies the LG players are flying off the shelves. Thus no one is going to build anything that competes directly with it and get at best half of what LG is getting now.

What does Universal get by being HD DVD only?

They get a HUGE amount of support from Microsoft. I'm not saying that Microsoft is actually paying Universal to stay HD DVD. I've heard many rumors to that effect, but I've seen absolutely no evidence to support it -- and it's not Microsoft's style.

However, Microsoft is minimizing their license fees and is providing unprecented support (people, equipment, etc.) in helping them implement iHD (I know they now call it HDi because they don't want people to think Apple invented it) and VC-1. This is helping Universal keep the cost of authoring HD DVD way below the cost of any Blu-ray studio.

[1234abcd]

I don't disagree that MS has more to lose than Universal. An add-on doorstop would be embarrassing and not help their image nor their console war battle with the PS3. I was just speculating what Universal themselves may feel advantageous about sticking with Plan A, apart from any incentives that MS may feed them.

[simpspin]

Originally Posted by Shadowself

They get a HUGE amount of support from Microsoft. I'm not saying that Microsoft is actually paying Universal to stay HD DVD. I've heard many rumors to that effect, but I've seen absolutely no evidence to support it -- and it's not Microsoft's style.

I think this IS true. The only benefit that HD-DVD has to Microsoft is it keeps Sony getting ahead in an established role, so Micrsoft is bribing Universal enough money to stay away from Blu Ray.

[Psiweaver]

Universal doesn't have to author two discs. That saves quite a bit of money right there as its not cheap to author discs and with both formats using a different type of menu system this adds up. The market is very small right now for these discs and most likely everyone involved at the moment is losing money. this is just for the time being but still losing money. I think that by being exlusive you lose a little less money. This is why until blu-ray starts to pull away from hd dvd i think universal will stay exclusive.

[jorg]

well if the hd dvd side plays there cards right they will have nothing to lose beside customer loyaltie

[emilsjr]

Originally Posted by Shadowself

They get a HUGE amount of support from Microsoft. I'm not saying that Microsoft is actually paying Universal to stay HD DVD. I've heard many rumors to that effect, but I've seen absolutely no evidence to support it -- and it's not Microsoft's style.

MS is on record saying they pay Universal for the Zune, so it is very possible.