Warner Pushes Back HD-DVD Titles to April

[Marwin]

Warner Pushes Back HD-DVD Titles to April
By Susanne Ault and Jennifer Netherby 3/16/2006

Warner Home Video Thursday finally revealed the first details of its plan to market HD DVD titles, including pricing, special features, projected sales and an initial street date of April 18—three weeks after the March 28 launch the studio had originally planned.

The studio said the three-week delay, blamed on technology complications, is minimal and should not harm the overall HD DVD launch. Warner is the first major studio to release titles in the high-definition format and the only studio to set a release date for movies on the format.

“There will be different delivery timing, but we don’t consider this a delay of the launch,” said Steve Nickerson, VP of marketing management for Warner Home Video. “We didn’t consider there to be a launch day, but a launch period—March 28 through the end of May is still the launch period for us.”

Million Dollar Baby, The Last Samurai and The Phantom of the Opera will street on HD DVD on April 18 for a $28.99 list price. Warner will release 17 additional HD DVD titles through May, including Batman Begins and Lethal Weapon, which had been expected March 28. The releases are the same titles originally announced at January’s Consumer Electronics Show.

Nickerson said the delay is due to changing to a new technology.

“This is a new format where we are using new copy protection, new compression, new codecs,” Nickerson said. “These are all new to us, new to the industry and new to the consumer.”

Speculation that Warner would delay its launch started last week after Walmart.com canceled HD DVD movie preorders without explanation. Nickerson said the cancellation was likely due to Walmart.com listing prices on the discs before they had been confirmed rather than the delayed software launch.

Warner will announce more releases in the coming weeks. The studio has set new release HD DVD prices at a list price of $34.99, versus the $28.99 for catalog.

Hybrid discs featuring HD DVD on one side and standard DVD on the other will be $39.99. These will be reserved for Warner’s newest films, which few consumers would already own on standard definition.

Batman Begins, The Dukes of Hazzard, Constantine and other select titles will carry HD DVD-specific bonus features that have not appeared on standard DVD versions.

Debut releases Million Dollar Baby, Last Samurai and Phantom will not carry extras unique from earlier releases.

All of Warner’s high-def titles, also including its upcoming Blu-ray releases, will boast interactive user interfaces, and viewers will be able to simultaneously access bonus features and the feature film.

Warner will blitz consumers with the bulk of its high-def marketing in the fourth quarter, when it expects sales to really kick off. Between launch and the end of September, the studio expects consumers to spend between $35 million and $40 million on all high-def software. In the October through December period, however, it expects high-def software spending to pick up to between $250 million and $750 million.

Retailers “are focused on how do I develop my business plan to merchandise this new category so I can capitalize on the big pay day, which is fourth quarter,” he said. “In the early stages, [Warner’s] focus is in getting the right product to the right stores. We want to help the retailer develop the right displays.”

News of the delay came as Toshiba began demonstrations of its HD DVD players at 40 stores around the country leading up to its hardware launch later this month. The demonstrations show consumers a comparison of tourist video from Greece in HD DVD picture on one side of the screen and standard analog TV on the other. The company also showed off HD DVD trailers of Warner’s Corpse Bride and Universal Studios Home Entertainment’s King Kong.

A Toshiba representative doing the demo in a Fry’s Electronics in City of Industry, Calif., said that even without robust software support at launch, consumers might still make the switch because new HD DVD players can upconvert standard DVDs to provide a better picture.

“There is the ability to take standard DVDs and make them look even better than they have before,” the spokesman said.

Even Toshiba has been unable to give an exact launch date beyond later this month. One customer at the demo asking when he could buy a player was told to fill out an information card to be added to the company’s mailing list.

Despite the software delay, HD DVD got more hardware backers this week. At technology conference CeBIT in Germany, LG Electronics and Fujitsu-Siemans, which had previously only planned to release Blu-ray hardware, each announced they were now format neutral and also will make HD DVD hardware. LG said it plans to release a dual format player later this year that will play both HD DVD and Blu-ray discs.

HD DVD software, though, will likely come mainly from major studios at first because of high manufacturing costs.

Image Entertainment, which distributes film buff line The Criterion Collection, will stay out of high-definition DVD altogether until manufacturing prices drop, CEO Martin Greenwald said at the B Riley Investor Conference Wednesday.

Greenwald said that it would cost the supplier about $40,000 to master a high-def title, versus $2,000 for a standard DVD title. The pressing of a high-def unit is $2 per unit versus $1 per unit for a standard DVD.

"If Toshiba or the Sony consortium expects to have anyone other than the majors supplying titles, they will have to come up with a subsidy program to allow Image and other indies to play in the field," Greenwald told VB following the conference. "But the reality is that the price point for manufacturing and replication will come down” as the technology matures.