Negative BD article in The Guardian

[Jack Torrance]

http://technology.guardian.co.uk/wee...rc=rss&feed=20

No punches pulled in high definition war

Sony's dream of an early victory in the next-gen DVD format fight has been dashed by poor PS3 sales

Kate Bulkley
Thursday May 3, 2007
The Guardian

If it was a Hollywood movie it would be a remake of Alien v Predator. On one side is the giant Sony corporation, which is backing the Blu-ray high definition DVD format by building it into its PlayStation 3 games consoles. Facing it across the global battlefield is Toshiba, backed by Microsoft and Intel, promoting the rival (and incompatible) HD DVD format.
The stakes are very high indeed for companies on both sides. Yet Sony, the pre-fight favourite - with the best-selling games console franchise in the world and the backing of seven Hollywood studios (basically all of the big ones except Universal Pictures) making their movies available on Blu-ray - is nowhere near delivering the early knockout blow it wanted.

Instead, early defections from the Blu-ray-only camp and lagging sales of PS3 consoles have blurred the picture of which format will win. Samsung broke ranks with Blu-ray last month by announcing it will make players that play both HD formats, following a similar move by LG. In addition, most analysts acknowledge that the PC manufacturers will play a key role in the format war - and having Microsoft and Intel behind HD DVD is significant. Neither of these two Toshiba allies has shown signs of switching camps so far.
Gamble on a bundle

Meanwhile, PS3 sales in the UK, the European market where PS3 has had its most successful launch, were 165,000 in week one but fell to 28,000 in the second week, a trend that has been echoed in other markets as well.

Sony took a big gamble bundling the Blu-ray player with the PS3, a move that contributed both to delays in its release and higher prices for the consoles. Last week Ken Kutaragi, the "father of the PlayStation", paid the price and resigned as chairman and chief executive of the Sony Computer Entertainment unit.

With the sales of PS3 lagging, the new machines may not be the cornerstone of a recovery at Sony, with videogame-related losses for Sony's year ending in March expected to amount to $2bn (£1bn) - double original expectations.

Sony has a lot riding on the success of the PS3, especially after it was wrong-footed in the music player market by Apple's iPod. It certainly doesn't want to have another Betamax or MiniDisc story, either. For Sony the PS3 and Blu-ray are part of an important corporate move to regain its pre-eminence in the consumer electronics business.

The picture is less clear for Toshiba, but certainly the company is keen to secure its share of the nascent market for high-definition players, and that means not wanting terms to be dictated by Sony. Toshiba also has an important backer on its side in Microsoft's Xbox.

The decision not to build the HD DVD player into the Xbox console means it does not work as a Trojan horse as the PS3 does for Blu-ray. But those who choose to buy an HD DVD attachment for the Xbox are definitely motivated by a desire to buy and play discs in the new HD format.

On the retail side, the battle is also taking some interesting twists. In a recent blog on Digital Trends, Rob Enderle said that US retail giant Wal-Mart (which owns Asda in the UK) plans to bring in "a massive number of low cost (possibly sub-$200) HD DVD players for Christmas". Although unconfirmed by Wal-Mart, such a move could be decisive. Wal-Mart uses DVD sales as a loss-leader to attract shoppers and accounts for between 40% and 45% of all US DVD sales.

In Europe, the HD DVD Promotion Group has also been busy signing up smaller European studios to the Toshiba format, hoping to "build a local ecosystem" for HD DVD software. The group is able to leverage the fact that the cost of replicating HD DVD discs is cheaper - the equipment is an upgrade from DVD replicators and there are no regional code controls.

Appetite for local-language movies is also quite high in several European countries, a fact that the HD DVD camp hopes to exploit by having more of these titles available on their format sooner. In France, for example, 40% of the DVD market is for titles from independent studios, according to Screen Digest. "We expect to have 200 unique titles available by year's end in Europe and a third of them will be local," says Xavier Bringue, HD DVD European group manager.

Crumbling support

At the moment there are 180 Blu-ray titles available in Europe, coming almost exclusively from big Hollywood studios. But despite the weight of titles, the number of HD DVD discs that are bought against the number of players sold is much higher than for Blu-ray discs. In the UK, this so-called "attach rate" for HD DVD discs is 28 per year on average, while for Blu-ray it's five, says the HD DVD Promotion Group.

While sales of Blu-ray hardware in the US (including PS3s and standalone players) is 5-to-1 against HD DVD hardware sales, Blu-ray's software sales figures are also a lot less impressive, at 2.3 discs per player, according to a recent report. "If PS3 people all started buying HD discs then by sheer weight Blu-ray would walk this battle," says Helen Davis Jayalath, senior video analyst at Screen Digest. "But that's not likely, because they are gamers." And, she adds, the Wal-Mart story "was an overoptimistic leak on the part of one of a number of Chinese companies that Wal-Mart is talking to. [Enderle] seems to believe that if a Wal-Mart cheap player deal goes ahead, HD DVD will 'win'. I'm not sure Sony will give up that easily."

But the Blu-ray hard line has begun to crumble among Hollywood studios, where Warner Bros and Paramount are hedging their bets by making discs in both formats. And it may be significant that Warners will offer its much-anticipated The Complete Matrix Trilogy only on HD DVD later this month. Given the importance of the first Matrix movie to the adoption of DVD players, this may be significant for HD DVD.

Much of the format battle revolves around which blockbuster movies are released on which formats and when. But an even bigger question is the pricing of players. At the moment Blu-ray players are more expensive - and not just the PS3 consoles. Standalone Blu-ray players are as much as $300 more expensive in the US than HD DVD players; similar pricing gaps exist in other markets.

But perhaps the biggest problem is that even the cheapest standalone players cost more than $300 each, too high to spur mass consumer adoption. Given the high stakes for both hardware makers and content companies, neither side is likely to stand down easily. In fact, this format war might not have a clear winner and loser. Despite the video industry's painful memories of Betamax vs VHS, multiple formats do co-exist in the games industry.

"The most likely scenario is that neither lose, but instead both formats survive," says Davis Jayalath of Screen Digest. "That doesn't mean it will be a 50/50 split. It just means that even though it is more than likely that Blu-ray will be the stronger format, HD DVD is still strong enough to be a viable business."

· If you'd like to comment on any aspect of Technology Guardian, send your emails to tech@guardian.co.uk



Comments???

[GasCat]

She needs to check her sources. It's obvious AVS forums played a major role in her reporting. Rob who????

Nice summary of all the hack jobs against Blu-Ray.

[RUR]

There's that completely baseless 28:1 attach rate for HD DVD again! Also, it's interesting that there's zero mention of the severe beating HD DVD is taking in movie sales.

All in all, it doesn't feel like a very even-handed article, and I'm being kind.

[Jack Torrance]

Originally Posted by KenB

There's that completely baseless 28:1 attach rate for HD DVD again! Also, it's interesting that there's zero mention of the severe beating HD DVD is taking in movie sales.

All in all, it doesn't feel like a very even-handed article, and I'm being kind.

Yeah, I would expect The Guardian to check it's sources and be more even handed when reporting on a technology - oh, well.

[jubaiweaponx]

I have to agree that attatchment ration is pretty biased ,wonder how old or well researched the info is ....i`m guessin not very

[Chad Varnadore]

Kinda sounds like the article may have been inspired by a talk with someone with the HD DVD promotion group. From the piece I read the PS3 was released now because of BD, implying it would have been released later otherwise - afterall the current market doesn't need a PS3. The DVD based 360 can easily satisfy it and has more support to do so. That may change in a couple years.

They got the hedging bets thing wrong too. I'm not sure about Paramount, but Warner went red first. They only decided to support blu too after they saw that everybody else was. It's easy to see how she drew her conclusions. But it's also obvious that she doesn't follow these things closely or with likely any personal interest.

[jubaiweaponx]

I agree chad more time,thought and research should have been put in the article along with maybe a point /counterpoint and experts in different markets

[Greenmatiz2]

I have never in my life read a single article from that rag that I have agreed with.

[MrBogey]

Awesome. The Guardian is a bellweather of reality. Anything ever printed in it is either wrong or completely devoid of sense. This falls into the latter. It's really like Xinhua or Pravda without the smirk.

[jubaiweaponx]

no doubt it`s pages make good bumwipe

[nobody]

Originally Posted by Jack Torrance

http://technology.guardian.co.uk/wee...rc=rss&feed=20

No punches pulled in high definition war

Sony's dream of an early victory in the next-gen DVD format fight has been dashed by poor PS3 sales

Kate Bulkley
Thursday May 3, 2007
The Guardian

If it was a Hollywood movie it would be a remake of Alien v Predator. On one side is the giant Sony corporation, which is backing the Blu-ray high definition DVD format by building it into its PlayStation 3 games consoles. Facing it across the global battlefield is Toshiba, backed by Microsoft and Intel, promoting the rival (and incompatible) HD DVD format.
The stakes are very high indeed for companies on both sides. Yet Sony, the pre-fight favourite - with the best-selling games console franchise in the world and the backing of seven Hollywood studios (basically all of the big ones except Universal Pictures) making their movies available on Blu-ray - is nowhere near delivering the early knockout blow it wanted.

Instead, early defections from the Blu-ray-only camp and lagging sales of PS3 consoles have blurred the picture of which format will win. Samsung broke ranks with Blu-ray last month by announcing it will make players that play both HD formats, following a similar move by LG. In addition, most analysts acknowledge that the PC manufacturers will play a key role in the format war - and having Microsoft and Intel behind HD DVD is significant. Neither of these two Toshiba allies has shown signs of switching camps so far.
Gamble on a bundle

Meanwhile, PS3 sales in the UK, the European market where PS3 has had its most successful launch, were 165,000 in week one but fell to 28,000 in the second week, a trend that has been echoed in other markets as well.

Sony took a big gamble bundling the Blu-ray player with the PS3, a move that contributed both to delays in its release and higher prices for the consoles. Last week Ken Kutaragi, the "father of the PlayStation", paid the price and resigned as chairman and chief executive of the Sony Computer Entertainment unit.

With the sales of PS3 lagging, the new machines may not be the cornerstone of a recovery at Sony, with videogame-related losses for Sony's year ending in March expected to amount to $2bn (£1bn) - double original expectations.

Sony has a lot riding on the success of the PS3, especially after it was wrong-footed in the music player market by Apple's iPod. It certainly doesn't want to have another Betamax or MiniDisc story, either. For Sony the PS3 and Blu-ray are part of an important corporate move to regain its pre-eminence in the consumer electronics business.

The picture is less clear for Toshiba, but certainly the company is keen to secure its share of the nascent market for high-definition players, and that means not wanting terms to be dictated by Sony. Toshiba also has an important backer on its side in Microsoft's Xbox.

The decision not to build the HD DVD player into the Xbox console means it does not work as a Trojan horse as the PS3 does for Blu-ray. But those who choose to buy an HD DVD attachment for the Xbox are definitely motivated by a desire to buy and play discs in the new HD format.

On the retail side, the battle is also taking some interesting twists. In a recent blog on Digital Trends, Rob Enderle said that US retail giant Wal-Mart (which owns Asda in the UK) plans to bring in "a massive number of low cost (possibly sub-$200) HD DVD players for Christmas". Although unconfirmed by Wal-Mart, such a move could be decisive. Wal-Mart uses DVD sales as a loss-leader to attract shoppers and accounts for between 40% and 45% of all US DVD sales.

In Europe, the HD DVD Promotion Group has also been busy signing up smaller European studios to the Toshiba format, hoping to "build a local ecosystem" for HD DVD software. The group is able to leverage the fact that the cost of replicating HD DVD discs is cheaper - the equipment is an upgrade from DVD replicators and there are no regional code controls.

Appetite for local-language movies is also quite high in several European countries, a fact that the HD DVD camp hopes to exploit by having more of these titles available on their format sooner. In France, for example, 40% of the DVD market is for titles from independent studios, according to Screen Digest. "We expect to have 200 unique titles available by year's end in Europe and a third of them will be local," says Xavier Bringue, HD DVD European group manager.

Crumbling support

At the moment there are 180 Blu-ray titles available in Europe, coming almost exclusively from big Hollywood studios. But despite the weight of titles, the number of HD DVD discs that are bought against the number of players sold is much higher than for Blu-ray discs. In the UK, this so-called "attach rate" for HD DVD discs is 28 per year on average, while for Blu-ray it's five, says the HD DVD Promotion Group.

While sales of Blu-ray hardware in the US (including PS3s and standalone players) is 5-to-1 against HD DVD hardware sales, Blu-ray's software sales figures are also a lot less impressive, at 2.3 discs per player, according to a recent report. "If PS3 people all started buying HD discs then by sheer weight Blu-ray would walk this battle," says Helen Davis Jayalath, senior video analyst at Screen Digest. "But that's not likely, because they are gamers." And, she adds, the Wal-Mart story "was an overoptimistic leak on the part of one of a number of Chinese companies that Wal-Mart is talking to. [Enderle] seems to believe that if a Wal-Mart cheap player deal goes ahead, HD DVD will 'win'. I'm not sure Sony will give up that easily."

But the Blu-ray hard line has begun to crumble among Hollywood studios, where Warner Bros and Paramount are hedging their bets by making discs in both formats. And it may be significant that Warners will offer its much-anticipated The Complete Matrix Trilogy only on HD DVD later this month. Given the importance of the first Matrix movie to the adoption of DVD players, this may be significant for HD DVD.

Much of the format battle revolves around which blockbuster movies are released on which formats and when. But an even bigger question is the pricing of players. At the moment Blu-ray players are more expensive - and not just the PS3 consoles. Standalone Blu-ray players are as much as $300 more expensive in the US than HD DVD players; similar pricing gaps exist in other markets.

But perhaps the biggest problem is that even the cheapest standalone players cost more than $300 each, too high to spur mass consumer adoption. Given the high stakes for both hardware makers and content companies, neither side is likely to stand down easily. In fact, this format war might not have a clear winner and loser. Despite the video industry's painful memories of Betamax vs VHS, multiple formats do co-exist in the games industry.

"The most likely scenario is that neither lose, but instead both formats survive," says Davis Jayalath of Screen Digest. "That doesn't mean it will be a 50/50 split. It just means that even though it is more than likely that Blu-ray will be the stronger format, HD DVD is still strong enough to be a viable business."

· If you'd like to comment on any aspect of Technology Guardian, send your emails to tech@guardian.co.uk



Comments???

How does she know it was SONY's intent to force Blu-ray on people...maybe SONY is just trying to bring gaming to the next level for peoples enjoyment. That could be why they went as far as to develop a processor capable of supercomputing abilities to munch thru massive amounts of data just for the PS3.

[nobody]

I don't really care what company wins. I just want the better format to win.Because I won't gain anything if SONY wins and gets the royalty except for the better format. Then again, I won't gain anything if Toshiba wins and gets the royalty either. So, why should anyone care what company wins.

[Dave]

If breaking record for them means poor sale i have nothing else to comment on this article....

PS3 have broken many records in sales and it is still hard to find in some places...

[invictus]

Big money loves HD-DVD backers. Lets back a product that has to be replaced sooner ..... can anyone say double-dip?

Whole reason we are going to another format is disc size, why make the largest jump?

[Maximus]

Originally Posted by Jack Torrance

Yeah, I would expect The Guardian to check it's sources and be more even handed when reporting on a technology - oh, well.

I don't the Guardian is a very terrible newspaper run by a bunch of hacks, I mean if your paper supports Ming the Merciless and his band of Lib Dems you are in for trouble.

[JTK]

This FUD is a broken record by now. Nothing new.

[BTBuck1]

Originally Posted by JTK

This FUD is a broken record by now. Nothing new.

The sad thing is, we know it...but the average joe (or MS/HDDVD Zealot) will preach it as gospel.

[dialog_gvf]

Wow, what an unbelievably bad piece of reporting.

(1) What the heck are you arguing for?

Sony's dream of an early victory in the next-gen DVD format fight has been dashed by poor PS3 sales

Sony took a big gamble bundling the Blu-ray player with the PS3, a move that contributed both to delays in its release and higher prices for the consoles. Last week Ken Kutaragi, the "father of the PlayStation", paid the price and resigned as chairman and chief executive of the Sony Computer Entertainment unit.

Argue that they shouldn't have put the BD drive in, or that slow sales are hurting Blu-ray. You can't argue BOTH!

(2) Old dead news

On the retail side, the battle is also taking some interesting twists. In a recent blog on Digital Trends, Rob Enderle said that US retail giant Wal-Mart (which owns Asda in the UK) plans to bring in "a massive number of low cost (possibly sub-$200) HD DVD players for Christmas". Although unconfirmed by Wal-Mart, such a move could be decisive. Wal-Mart uses DVD sales as a loss-leader to attract shoppers and accounts for between 40% and 45% of all US DVD sales.

What did I say about Rob's article? It was a plant for being repeated ad nausea. That it was based on an AVS post based on a Chinese story that turned out to be completely false seems to have failed to register with the "journalists".

(3) Can we get the tired old attach rate argument into the story?

At the moment there are 180 Blu-ray titles available in Europe, coming almost exclusively from big Hollywood studios. But despite the weight of titles, the number of HD DVD discs that are bought against the number of players sold is much higher than for Blu-ray discs. In the UK, this so-called "attach rate" for HD DVD discs is 28 per year on average, while for Blu-ray it's five, says the HD DVD Promotion Group.

BINGO!

(4) Studio support

But the Blu-ray hard line has begun to crumble among Hollywood studios, where Warner Bros and Paramount are hedging their bets by making discs in both formats. And it may be significant that Warners will offer its much-anticipated The Complete Matrix Trilogy only on HD DVD later this month. Given the importance of the first Matrix movie to the adoption of DVD players, this may be significant for HD DVD.

How does an initial HD DVD-only "neutral" studio have a crumbling Blu-ray hard line?

Geez, if Warner is starting to support HD DVD, can Disney be far behind?!

[JTK]

Originally Posted by BTBuck1

The sad thing is, we know it...but the average joe (or MS/HDDVD Zealot) will preach it as gospel.

Yup.

[Blu-Ray Buckeye]

Yeah, I would expect The Guardian to check it's sources and be more even handed when reporting

Why would you expect unbiased, factual reporting from that socialist pile of feces? They don't care about facts on any topic. BD v HD-DVD is no different.