March 17, 2006
Warner Delays, Shrinks HD-DVD Releases
LOS ANGELES -- It's official: When the first HD-DVD players, from Toshiba, begin arriving in stores this month, there won't be any software for at least another three weeks.
Warner Home Video said Thursday that it has pushed back the release dates of its initial slate of high-definition DVD titles to April 18 from March 28. The studio also has scaled back its launch to just three titles: "Million Dollar Baby," "The Phantom of the Opera" and "The Last Samurai."Stephen Nickerson, the studio's senior VP market management, attributed the delay to technical issues.
"Everything we do is new," he said. "We're using new copy protection, new compression, new codecs, and we want to make sure the product that goes out is flawless."
The remaining 17 titles in the first wave of Warner's HD-DVD launch -- the total also has been scaled back from the 24 announced at the Consumer Electronics Show in January to 20 -- will be released in subsequent weeks, he said. These include "Batman Begins," "Charlie and the Chocolate Factory" and "The Matrix."
The finalized launch schedule comes as Warner research suggests high-definition packaged media could catch on with consumers even faster than DVD regardless of the ongoing format war.
Warner projects that by year's end, consumers will have bought nearly 600,000 set-top players -- 450,000 of them HD-DVD machines and the balance Sony Blu-ray Disc players. That compares with 305,000 DVD players by December 1997, that format's first year.
Factor in Xbox 360 game consoles capable of playing HD-DVD software, PlayStation 3 consoles that can play BD software and computers with HD-media capability, and the year-end tally could be as high as 8.5 million units.
Warner also predicts consumer spending on HD media by year's end will clock in at $290 million-$740 million.
Nickerson said Warner's February survey of 1,500 early adopters showed that 60% of them had a "strong interest" in buying HD hardware and software. Of the respondents, 80% already owned a high-definition TV set, while the remaining 20% said they would buy one within the next year.
He said Warner believes that the format war between the competing next-generation, high-definition optical disc technologies HD-DVD and Blu-ray Disc would not stymie growth as many observers have been saying.
"Two formats doesn't cause people not to spend money," Nickerson said. "Confusion and a lack of being able to explain benefits, that causes people not to spend money."
He sees both formats surviving and even thriving, pointing to the video game and flat-screen TV industries as examples in which there is room for more than one successful format.
Accordingly, Nickerson said, Warner's message to retailers is "80% about the benefits of high-definition media and 20%, oh, by the way, there are two formats and you might have to make a choice."
He noted that a projected 25 million HDTVs will be in U.S. households by year's end, and those consumers will want to have a high-definition successor to DVD in the market.
"We are not going to fight a format war," Nickerson said. "The more time you spend fighting a format war, the less time you spend selling the customer."
He said Warner plans to support both formats, with HD-DVD rolling out first because the players are coming to market first. Warner's first three titles are coming April 18, and beginning in May all new releases will be released day-and-date on standard DVD and HD-DVD.
Key catalog titles will be introduced on HD-DVD beginning in July, while TV-DVD releases will begin arriving in the third quarter.
Warner's Blu-ray Disc software will launch in July.
Meanwhile, Sony Electronics on Thursday debuted its first Blu-ray Disc hardware products in the U.S., led by a set-top player slated to arrive in stores in July at a list price of about $1,000. That is twice what Toshiba is charging for the cheapest of its two HD-DVD players, which are scheduled to hit the market this month.
Blu-ray Disc and HD-DVD are rivals in the quest for a high-definition successor to DVD. Blu-ray enjoys the support of five of the six major Hollywood studios and most consumer electronics manufacturers, while HD-DVD is being supported by three studios -- only one of them exclusively -- and two consumer electronics manufacturers.
In addition to the set-top BDP-S1 Blu-ray Disc player, Sony's BD slate includes a new VAIO RC desktop computer, retailing at about $2,300, and a notebook with a BD drive. Both should be available by early summer.
Next month, Sony will start shipping 25GB BD-R (write once) and BD-RE (rewritable) discs for about $20 and $25 each, respectively. In later months, Sony will launch 50GB BD-R and BD-RE dual-layer discs for about $48 and $60.
"We're in a unique position to be unveiling a full line of HD products that capitalize on Blu-ray Disc's technological advantages," said Hideki "Dick" Komiyama, president and chief operating officer of Sony Electronics Inc.