What if Warner, Paramount & Universal go neutral?

[tron3]

What if Warner, Paramount and Universal go neutral? Yes, I am painfully aware of the exclusive Parmount / Dreamworks contract. I am also aware of Universal announcing of having no plans to support blu-ray.

Now, for the obvious scenario. Assume Warner is just riding the coat tails of the Paramount contract. After all, neither they nor Universal are going any place. Why not double dip with HD DVD in the meantime? In this case being caught in the middle only gives more cash flow.

Come December 2008 Paramount declare they are going back to neutral. After all, they would like to double dip as well. Will Toshiba keep throwing cash at them? Not if Paramount sees the money being made by Warner for being neutral. At least we hope. It should be obvious that an 18 month contract and 150 million dollars didn't buy them that much more market share. Next year has finally arrived and stock holders are demanding another big pay off in this growing market. What to do?

So now, Warner and Paramount are buddy-buddy neutral supporters. Toshiba is pissed. Well, Universal doesn't want to be the only one left out. So they go neutral as well. After all, all three studios have a rather large fan base of HD DVD supporters to please. Staying neutral is "good business".

Firstly, I fear the "Warner Effect" of converting HD DVD content to BD into becoming the "Universal Paramount Warner Effect". Small price to pay for this "soft win" as we will have all the studios supporting blu, albeit with lesser quality content.

Scenario 1: What happens now? Do they quietly start dropping HD DVD support by 2010 to concentrate on making ONE good product rather than 2 sucky ones? If they are smart, they will.

Scenario 2: Will they continue to be neutral indefinately? If so, will this put pressure on Sony, Fox and Disney to follow suit? Would they even consider it? People have short memories and insane liberal values these days. People could demand everyone go neutral. Not saying camp blu is stupid enough to do it. But it becomes a headache.

The real deal: The general public sees ALL the major players supporting blu-ray. "Blu-ray has won!" That is good enough for them, even though stuidios will continue to support "the losing format". HD DVD players stop selling. Some people desperately buy spares and backups at blowout prices. Blu-ray is flying out of the stores. We soon say "buh-bye" to (HD) DVD.

Does this become a Blu-Red stalemate forever? Does Warner decide to drop HD DVD support? Something has to give. I can see Universal being a little stubborn as they say they have no intention of converting over. But if the market shifts so radically, how can they ignore it? Answer - they can not. They should all learn something from the fall out of the Toshiba contract. That should make any of them gun shy about doing business with Toshiba.

If they study the market, they will see a number of defectors going neutral from Red to Blu. They perceive that as lost sales. All the blu sales in the world still didn't give me Transformers on blu-ray. They will see it works both ways, and people will defect neutral or go blu. Studios win this war. This is why I say camp red should adopt blu, and not the other way around.
Now, I am willing to hear sound rational opinions. Maybe together we can piece together a solution or predict the outcome to some degree of accuracy. For now, that is how I see it. What are your thoughts?