Methods the BLU-RAY camp could use to win the format war

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The HD-DVD camp now has Universal Studios and Paramount Pictures as exclusive studios which was a good business play for the HD-DVD camp. Several months ago I mentioned the possibility of the HD-DVD camp attempting to get Paramount and/or Warner to go exclusive. It is easier to convince a neutral studio to go exclusive then to convince an exclusive studio to switch sides without going neutral first. Disney, 20th Century Fox, and Sony Pictures are dedicated to the BLU-RAY format. Possible the next business move by the HD-DVD camp will be to try and get Warner to drop BLU-RAY and go HD-DVD exclusive. Then if that is successful the HD-DVD camp would try and make a business deal to get Disney and/or 20th Century Fox to go neutral. Microsoft does not have a movie studio yet, who knows one day they could try and buy Sony Pictures, 20th Century Fox, or Disney.
The problem the HD-DVD camp has is the lack of standalone HD-DVD player support. For the HD-DVD format to coexist or win the so called war they need to either convince consumer hardware manufactories to go neutral and make HD-DVD standalone players also or combo players. When consumers walk into a retail store and see only Toshiba HD-DVD players with Sony, Pioneer, Panasonic, Philips, and Samsung BLU-RAY players the smart person is going to buy a BLU-RAY player. There is no way everyone is going to purchase a Toshiba brand HD-DVD player. Sony in the Betamax days learned that not everyone was going to purchase a Sony brand betamax. Of course this Christmas season we will have more brands of players to choose from both the BLU-RAY and HD-DVD camps.
So the logical goal of the HD-DVD camp is to get more studio support and also more consumer hardware support to coexist in this format war. I doubt the HD-DVD camp will be able to get enough studio support and consumer hardware support to win the war; they most likely will just get enough support to coexist and create a big enough market for under $500 combo players in 2008.
The HD-DVD camp had a major victory in the battle over BLU-RAY this week which in theory should slow down the demand for BLU-RAY only players. With two big exclusive studios on the HD-DVD side many consumers are now going to wait for combo players to arrive on the market. Worse case scenario the continuing format war will greatly slow down adoption and create a niche small market for HDTV optical discs. Since 1080P HDMI upconvert DVD players can be purchased for under $50 many consumers might stick with 480I DVD this Christmas.

Methods the BLU-RAY camp could use to win the format war

1. Since Paramount Pictures/Dreamworks and Universal Studios are both exclusive to the HD-DVD format it will create a demand for combo players. What the BLU-RAY camp needs to do to win this format war and to prevent both formats from coexisting with combo players is to offer BLU-RAY players for $199.99 with no free movies this Christmas 2007. When BLU-RAY players reach $199.99 they will sale several millions of players even if the HD-DVD camp lowers player prices to $50. The average consumer will spend at least $1,000 on a HDTV display and once BLU-RAY players are selling for under $200 it will not matter if the HD-DVD camp goes to a $50 price point for players. If a low cost $199.99 BLU-RAY player or HD-DVD player was made available most consumers would take the risk and purchase either a HD-DVD player or BLU-RAY player. The HD-DVD camp plans on having under $200 HD-DVD players this Christmas and they are calculating that the cheapest BLU-RAY player will be $399. If Sony made a bold move and priced a BLU-RAY player at $199.99 this year it would catch the HD-DVD camp off guard and even if they lowered the HD-DVD players to $50 most people would still choose BLU-RAY and most likely this war could end before under $500 combo players appear on the market. Once working under $500 combo players appear on the market this war is over and both formats will coexist. Of course the BLU-RAY camp still has the $1,000 Pionner Elite and $2,000 Denon BLU-RAY players to sale to the high-end market. The cheap under $200 BLU-RAY would be used to win the format war.

2. The BLU-RAY Association should try and convince Warner to go BLU-RAY exclusive before the HD-DVD camp makes this move. If BLU-RAY were to loose Warner then combo players will be a must have feature even more. The more studio support that is lost in the BLU-RAY camp the more consumers will demand combo players.

3. Sony Pictures should release a select few hit BLU-RAY titles 30 days before the DVD release date. These could be a Superbit HDTV titles with no extras. For example if Spiderman 3 was released 30 days early on BLU-Ray before the DVD release this would create a huge demand for BLU-RAY players. BLU-RAY players work on standard non HDTV TV’s and some people would buy a BLU-RAY player to own select BLU-RAY movies 30 days early.

4. Once several million under $200 BLU-RAY players are sold then the final blow to both the HD-DVD and DVD format would be to have Disney, 20th Century Fox, and Sony Pictures release movies in the BLU-RAY format only and cancel all DVD releases within a 2 year period. Since the AACS with BD+ is 100% secure against pirates eliminating the DVD format would stop piracy and create a huge demand for BLU-RAY movies. If Disney, 20th Century Fox, and Sony stop releasing movies on DVD then consumers will purchase several millions of under $200 BLU-RAY players in order to watch movies on their standard 480I TV’s and HDTV TV’s. The studios make the final decision on what format is going to be used to watch movies on. When the DVD format became popular the studios decided to stop releasing movies on VHS and several millions of people who only owned a VHS machine bought a DVD player for the very first time since they had no other choice if they wanted to collect movies.