Los Angeles Times article: DVD Format War apears to be OVER!

[GreenScar]

Yet another article to be make us giddy...

LATIMES

DVD format war appears to be over

Warner picks Blu-ray over HD, but some say the Net may beat both.
By Dawn C. Chmielewski, Los Angeles Times Staff Writer
January 5, 2008
The fuzzy future of high-definition DVD came into sharper focus Friday after Warner Bros. said it would release movies for the home video market exclusively on the Blu-ray disc format.

The decision, announced on the eve of the influential Consumer Electronics Show, delivers a de facto knockout punch to the rival HD DVD format backed by Toshiba Corp. and others now supported by only two of Hollywood's six major movie studios.

It also averts a further costly format war that has been stymieing the growth of the next generation of DVD with promises of enhanced video images and digital audio to match the popularity of flat, big-screen television sets. For the first time, sales of movies on regular DVDs declined last year, jeopardizing a longtime and important source of profits for Hollywood. The studios hope the new, higher-quality format will spur consumers to restock their DVD shelves.

In addition to Warner Bros., studios supporting the Blu-ray format include News Corp.'s 20th Century Fox, Walt Disney Co., Sony Pictures and Metro-Goldwyn-Mayer. Taken together, they represent about 70% of the home video market. HD DVD is supported by General Electric's NBC Universal, Viacom Inc.'s Paramount Pictures and the independent studio DreamWorks Animation.

"Expect HD DVD to die a quick death," said Richard Greenfield, an analyst with Pali Research in New York, in a research note Friday.

Late Friday, the HD DVD group canceled a news conference scheduled for Sunday at the Consumer Electronics Show in Las Vegas. "We are currently discussing the potential impact of this announcement with the other HD DVD partner companies and evaluating next steps. We believe the consumer continues to benefit from HD DVD's commitment to quality and affordability," the group said in a statement.

The larger question, however, is how long even the winning high-definition DVD format may survive. Some analysts say the battle between Blu-ray and HD DVD may become irrelevant as high-speed Internet and on-demand video become the pipelines of movies into the home.

"I think the fat lady just sang," said Rob Enderle, principal analyst with Enderle Group in San Jose. "This gives Blu-ray a decisive lead. The question now is whether it is too little too late."

Enderle said consumers might have moved on to digital downloads to get movies rather than wait to buy them on next-generation DVDs. The next big chance to sell high-definition movie players won't be until next Christmas, he said. "By then, it may all be moot."

Warner Bros. had remained neutral as the rival technology camps spent millions to win over consumers. Each group engaged in aggressive price cutting and promotions this holiday season in an attempt to persuade consumers to take the high-definition DVD plunge.

But sales of these next-generation discs fell short of expectations, given the huge summer box office from popcorn movies, said Kevin Tsujihara, president of Warner Bros. Home Entertainment Group. Nor, he added, did the high-definition DVD players keep pace with the sale of high-definition TVs.

"There's a window of opportunity here," Tsujihara said. "There are a number of high-definition television sets being purchased. The best time to sell one of these high-definition DVD players is when the consumer walks out the door with that television set. That window was beginning to close on us."

Warner Bros. even sought its own solution to the format war at the 2007 Consumer Electronics Show, proposing a high-definition disc that combined the Blu-ray and HD DVD formats. But Warner was the only studio to embrace the dual format, so it never reached stores.

Sony Corp.'s Blu-ray discs have had a 2-1 sales edge since the beginning of 2007, thanks to its exclusive studio deals and the sale of Sony PlayStation 3 game consoles that play films in that high-definition format.

That prompted the HD DVD camp to flash its cash to remain viable. It paid $150 million to Paramount Pictures and DreamWorks Animation in August to secure exclusively the rights to such major movies as "Transformers" and "Shrek the Third" on HD DVD. Paramount had previously released movies in both high-definition formats.

"HD DVD had a lot of momentum in 2007 when they had their own defection of Paramount. That was a very big move," said J.P. Gownder, an analyst with Forrester Research in Cambridge, Mass. "Now, the balance of power shifts back to Blu-ray."

The Paramount deal reportedly sparked a furious courtship of Warner, which was the last of the major studios to support both high-definition DVD formats. Warner will begin releasing movies exclusively on Blu-ray in June.

Barry Meyer, chairman and chief executive of Warner Bros., flatly denied that the studio was offered a big check to choose the Blu-ray format.
"This was not a bidding contest between the two formats. This is a huge business for us," Meyer said. "We're the market leader globally. We're not going to make a strategic decision based on any kind of short-term financial gain."

Nonetheless, studios such as Warner are facing pressure to grow the nascent high-definition video business at a time when consumer spending on DVDs is declining.

And it's clear that the format war -- though benefiting consumers by driving down the price of high-definition DVD players -- has been confusing them too and keeping them from replacing their DVD players and their movie collection.

"Unfortunately, the loser here with the format war has been the consumer," Gownder said. "We found that 28% of people said the fact that there was a format war meant they weren't going to buy a high-definition DVD player. They weren't going to try to figure it out."

[Rustyblu]

I doubt that downloads for high-def will replace blu-ray or even standard DVD for years to come. High-speed internet service isn't available for everyone and even with my service it still takes too long for downloads. I'd much prefer to go to the store and rent or buy the movies I want to see.

[WickyWoo]

Notice how Enderle is pushing his MS master's real agenda on this, the download angle. He's a paid shill for both Tosh and MS mind you

[GreenScar]

Originally Posted by WickyWoo

Notice how Enderle is pushing his MS master's real agenda on this, the download angle. He's a paid shill for both Tosh and MS mind you

Good to know. The downloading angle in the article seemed out of place.

[quetzalcoatl]

Originally Posted by WickyWoo

Notice how Enderle is pushing his MS master's real agenda on this, the download angle. He's a paid shill for both Tosh and MS mind you

I really like how they talk about downloads being ready within the near future. If you want to have some fun look how long it would take to DL a 50GB disc. I will mention where I think most people are for speed and I think I am being generous with this number. Since all the advertised cheap rates are for a 768Kbps so you can double the time.
1.5Mbps 3days 20 mins. at max rate.
http://www.martindalecenter.com/AATimeCalc.html

I can see the family talking now. "Hey dad can we watch Cars on Sat?" "Sorry son but it is already Friday and I would have had to start the DL on Wed." "Maybe we can plan for it next week."

[Blu-Jedi]

I too think they are overestimating the influence of downloads. First, unless you have cable ,satellite, or dsl, the download would take forever. Second, once you do download it, is it yours to keep? Like me, some people consider their movies a collection . Third, I seriously doubt you'll get the quality of a blu-ray in a download that you would in the dvd itself. They are taking the material part out of it for some people, you want those blu-rays on the shelf for all to see.

[Septimus Prime]

I also don't buy that downloaded movies will be viable in the near future.

[quetzalcoatl]

Originally Posted by Blu-Jedi

I too think they are overestimating the influence of downloads. First, unless you have cable ,satellite, or dsl, the download would take forever. Second, once you do download it, is it yours to keep? Like me, some people consider their movies a collection . Third, I seriously doubt you'll get the quality of a blu-ray in a download that you would in the dvd itself. They are taking the material part out of it for some people, you want those blu-rays on the shelf for all to see.

No it does not matter what service you have right now for the most part short of a decicated T3 or FIOS with a 30Mbps connection. I have a 10Mbps cable connection and my DL time would still be almost 11 hours. And the FIOS connection would be over 3 hours at a cost of $159 a month. So not very mainstream.

[cartier]

Originally Posted by WickyWoo

Notice how Enderle is pushing his MS master's real agenda on this, the download angle. He's a paid shill for both Tosh and MS mind you

You have got to love how they always talk about video download, or an on-demand approach. Notice that it is not an HD video download with advanced audio and interactivity. Also the on-demand approach will raise problems of taking it with you on vacation and what happens if you switch TV service providers I do not think Comcast, Verizon, DirectTV, Dish Network, AT&T and all the other providers will play nice. I have a 1080p TV and I want 1080p content with all the extras. I will settle for 720p & 1080i for TV, but my movies must be 1080p. Of course there is the bandwidth and storage issues too.

[kabraal]

Yeah I just do see how high speed downloads will come close to what BD can offer for a long time. Don’t know about you guys but my internet capabilities are way to slow to support 40mbps streaming or 50GB downloads for that matter. I’d much rather go to a store and buy a disc for $20 and I suspect most other people will as well.

Digital downloads of true HD content as we have it on BD will remain a extremely niche market for a long long time…

[Tanman19az]

another issue with the gay downloading angle is that most people dont know how to download movies off the internet. Seriously with some people, they just know how to surf the web. Anything else is just stuff nerds know how to do. Computers scare some people haha. Oh and try explaining to them how to display the image onto their HDTV from their computer. Poor customer service people!

[Fozziwig]

It takes seconds to download a music track. Minutes to download an album.

Have CD sales vanished? No, of course not. CD's still sell by the million because the vast majority of people still like to buy and own physical media.

Music is quick and easy to download. It hasn't killed the CD.

Granted the following link is to some old research, but it illustrates the relationship between (illegal) online behaviour and real world purchasing behaviour nicely.

http://www.newscientist.com/article/...ord-sales.html

The idea that HD downloads will be adopted by the mass market in less than a year is so idiotic that I really have to question the LA Times' analytical skills. I would assume that the journalist was a HD DVD fangirl, which is why she went to Enderle for the quote in an attempt to downplay the awesome news for Blu-ray.

So, this will be the new mantra for the losers?

The larger question, however, is how long even the winning high-definition DVD format may survive.

Those sad little red ants get everywhere don't they?

[Septimus Prime]

User friendliness aside, it's just not yet a viable alternative to optical disc media. As people are saying, we don't have the infrastructure to support huge, full-HD downloads (much less HD streams) in any reasonable amounts of time, and the movies that will be available to us will be plagued with incredibly restrictive DRM.

Plus, I'm sure most people will agree that it just FEELS better to own a physical, tangible copy of your media. This is one of the reasons real books are still around in an age where we have eBooks and digital paper.

[quetzalcoatl]

If they can get over the DL hurtle which I donot think they can do. Then we come to the next hurtle and that is the storage question.
How many have even 1TB of storage?
I am one that has 1.5TB of storage so that means I could hold a whole 30 movies at 50GB. So if you want a collection you will need a massive RAID. And right now the sweet spot on drives is at about the 750GB level for about $230. So if you want to keep movies just in storage you are looking at about $15 a movie.
Then we can come to the DRM problem. How long will the licencse be good for? How much will it cost for just the DL? Will it be a PPV system?

If they can get over all of this then there is a chance for digital DLs. But the first 2 problems will not be solved for many years. Especially the first one since that requires major infastructure throughout the country.

[jdc115]

Originally Posted by Septimus Prime

I also don't buy that downloaded movies will be viable in the near future.

Not in the near term, too much sacrifice of quality at the moment and who really wants to pay the cost of the movie to just have a file that they can play at home? I wouldn't mind it to rent a movie for a few dollars but if I am going to pay $10 or more, I would rather have a physical copy. That way I can watch it where I want, lend it to friends, trade or sell them, etc. I don't think many people care to spend money on downloads unless they are quite cheap.

I have a HD media extender that I love, I can play my files from my PC in a different room through my Home Theatre in hi def. I wouldn't mind a service that I could use to rent a video but it doesn't make me not buy Blu-ray disks or make me think the future is downloads.

[Tanman19az]

Originally Posted by quetzalcoatl

If they can get over the DL hurtle which I donot think they can do. Then we come to the next hurtle and that is the storage question.
How many have even 1TB of storage?
I am one that has 1.5TB of storage so that means I could hold a whole 30 movies at 50GB. So if you want a collection you will need a massive RAID. And right now the sweet spot on drives is at about the 750GB level for about $230. So if you want to keep movies just in storage you are looking at about $15 a movie.
Then we can come to the DRM problem. How long will the licencse be good for? How much will it cost for just the DL? Will it be a PPV system?

If they can get over all of this then there is a chance for digital DLs. But the first 2 problems will not be solved for many years. Especially the first one since that requires major infastructure throughout the country.

NICE!!...........I didn't even consider the storage angle

[Cyan]

Download supplanting anything is a complete pipe dream right now. On Demand services don't come anywhere HD, and the time that it would take to physically download something is monumental. MS makes me laugh. It's unfortunate that their effort to prolong this war as long as possible has failed on them. I wish everything would fail on them, because Windows sucks ass anymore too...Vista is a joke.

[jdc115]

Originally Posted by quetzalcoatl

If they can get over the DL hurtle which I donot think they can do. Then we come to the next hurtle and that is the storage question.
How many have even 1TB of storage?
I am one that has 1.5TB of storage so that means I could hold a whole 30 movies at 50GB. So if you want a collection you will need a massive RAID. And right now the sweet spot on drives is at about the 750GB level for about $230. So if you want to keep movies just in storage you are looking at about $15 a movie.
Then we can come to the DRM problem. How long will the licencse be good for? How much will it cost for just the DL? Will it be a PPV system?

If they can get over all of this then there is a chance for digital DLs. But the first 2 problems will not be solved for many years. Especially the first one since that requires major infastructure throughout the country.

Could you image spending $15 per movie and then having the hard drive crash and losing everything? I just don't see it happening anytime soon. Most people I know do a very poor job of backing up their home PC let alone run a RAID disk array at home like you do.

The near to mid term future is still physical media

[NutsAboutPS3]

Yeah, right, downloads are the future, that is why Wal-Mart has just closed its service down and nobody even noticed for a while!

[chrisshea]

yea 3-4 days of downloading at full speed but if u actualy use ur internet that mught go up to like 6-9 days and even more

from what i read ms doesnt want people to get used to Hd audio and 1080p quality picture soo that they can stream lower rez and audio for there digital download system

and also not all isp would allow this
hell my limit is 100gig a month
and i already use it up