War Ends In 18 Months, Possibly with HD DVD Upset Victory Over Blu-ray

Wilson Rothman — Tue, 25 Sep 2007 09:40:38 EDT

Sales of next-gen high-def disc players won't kick into high gear for another 18 months, says a fresh report from Forrester Research, not until they reach the $200 price point. The study didn't say whose players, though. What was once an easy call—Blu-ray by Christmas 2007—has gotten murkier, and in the most recent rounds, HD DVD has been bitchslapping Blu-ray up and down the ring.

Following price drops in HD DVD players (perhaps resulting in a loss to manufacturers) and Paramount's decision to stick solely to that format, analyst J.P. Gownder writes:

"Weakened by these developments, Blu-ray needs to offer a viable hardware model at the $250 price point by Christmas 2007. The Blu-ray camp must also stave off further studio defections, and employ more aggressive promotional tactics to counter HD DVD's recent momentum."

People need a $200 player or they won't buy, in spite of the current rampant sales of high-def TVs. It's still Blu-ray's game to lose, but here's Gownder's bottom line:

"Failure to alter strategy would open up Blu-ray to a possible upset defeat at the hands of HD DVD."

[Reuters]

HD DVD Paid $150 million to Studios for "Promotional Consideration"

Wilson Rothman — Mon, 20 Aug 2007 17:39:13 EDT

Paramount and Dreamworks went HD DVD exclusive today. Then, a Hollywood news blog reported that the HD DVD camp paid Paramount $50 million and DreamWorks Animation $100 million for "promotional consideration." We asked Paramount and the HD DVD camp about this, and received a quick albeit vague reply: "Whenever we conduct co-marketing, production deals or other agreements, we never discuss business terms."

I take that as a confirmation of sorts—certainly it isn't a denial—but is it bad, or even out of the ordinary? Let's get some context. First, here's a fuller version of what transpired today:
When reporting the Paramount/DreamWorks Animation announcement, Nikki Finke at Deadline Hollywood Daily wrote this:

Note how there's no mention of the money Paramount (I'm told $50 million) and DreamWorks Animation (I'm told $100 million) is receiving for "promotional consideration" from the HD DVD side to continue with what is widely recognized as the losing high-def format.

We're sure Nikki's a good person and a fine reporter, but we needed to check on such a serious claim. We asked the HD DVD group, who relayed the request to Paramount, and heard back in the form of this reply:

The reason we made this decision is simple. After a year of fully experiencing and exploring both formats, we decided to exclusively support HD DVD because of the quality, value and potential the format offers. Beyond that, whenever we conduct co-marketing, production deals or other agreements, we never discuss business terms.

Like I said, there is no flat-out denial here, but there has not been a flat-out denial from anyone about these so-called "promotional" expenses. Poking around, I hear a lot of similar grumbles about Sony and Team Blu-ray, and how they might have swayed Target and Blockbuster with help of some little green friends, just like Universal's exclusive deal with HD DVD may be the result of some excellent "promoting." The only thing that's different here is that some actual numbers have wafted out of the smoke-filled backroom, but even those cannot be trusted 100%.

The essence of Finke's story, that this move will be profitable for Paramount and DreamWorks in the short term, can be trusted, however, as can be the general assumption that the Blu-ray camp is making it worthwhile to support its format, too. That's just business, right? [Deadline Hollywood Daily]

Gizmodo: hd dvd vs blu-ray

War Ends In 18 Months, Possibly with HD DVD Upset Victory Over Blu-ray

HD DVD Paid $150 million to Studios for "Promotional Consideration"