Although the intentions aren't yet explicit, most of the coalition members have openly opposed net neutrality legislation and are in favor of allowing ISPs to have the "freedom" to monitor their customers. But Microsoft is a little bit more squirmy on the subject. Thomas C. Rubin, Microsoft’s chief counsel for intellectual property strategy, told Hansell:

We think that this is an opportunity to work with leaders across industries to put our heads together to discuss the opportunities that exist to facilitate the promotion of the availability of legitimate content on the Internet. We are not in favor of filtering at the network level.

Hopefully that is enough of a bulwark against rampant abuse of power. As the forces align, it's important for pirates and non-pirates alike to keep watch. Meantime, check out the full article. [NYT]

It's impossible to say how these'll work in the market where instant and convenient downloads are a click away, since you'll have to either buy one in a physical store, or purchase them online and wait for them to come in the mail.

But you can guess that downloading market is why the music biz is trying to grab back control of at least some of their music sales. There's no official data on pricing, but word is it'll compare to existing CD albums, and a list of titles will hit in time for the holiday season. [SlotMusic]

It was the thorn in Blu-ray's side. Transformers, otherwise known as the '80s cartoon manifestation of geekdom, was HD DVD only. Well luckily for Blu-ray owners, HD DVD died a violent death and they got their Megatron fix after all. While this two-disc set won't offer anything extra over what was released last year on HD DVD, all of the special features have been ported to the new format along with the same, pristinely encoded video.

Here are the rest of this week's Blu-ray releases, including this week's runner up, Every Which Way But Loose:

•Black Mask (Lionsgate)
•Cirque du Soleil: Corteo (Sony)
•Eraser (Warner)
•Every Which Way But Loose (Warner)
•The Gauntlet (Warner)
•The Invincible Iron Man (Lionsgate)
•Marine Aquarium (BCI)
•Married Life (Sony)
•Next Avengers: Heroes of Tomorrow (Lionsgate)
•Outbreak (Warner)
•Robotech: The Shadow Chronicles (FUNimation)
•Transformers (2007) (Paramount)
•Under Siege 2: Dark Territory (Warner)

Yeah, I just may have to be a stereotype of my demographic and pick Transformers up. [hidefdigest]

Where the hell is the Blu-ray edition? How can you ask us to buy it a fifth time—after VHS, two earlier DVDs and the beautiful-looking HD DVD—without a version on Blu-ray? Do we really have to hang onto our Xbox HD DVD module just so we can enjoy the Coen Brothers' masterpiece, with classic sequences like The Dude's post-roofie hallucination, dripping with oddball 70s sleaze, in high-def? Who are you, George Lucas? This will not stand. [Amazon via CrunchGear]

NEWS RELEASE

UNIVERSAL UNVEILS INAUGURAL SLATE OF

FILM AND TV OFFERINGS COMING TO

BLU-RAY™ DISC DAY AND DATE WITH DVD

"Heroes: Season Two" Will Mark the Studio's First Global Event Release

Lineup to Include Summer 2008's Most Anticipated Films From Universal Pictures:

THE INCREDIBLE HULK, Wanted, Hellboy II: The Golden Army,

Mamma Mia! and The Mummy: Tomb of the Dragon Emperor,

As Well as Some of the Studio's Other Biggest Titles

Universal City, California, April 17, 2008—Universal Studios Home Entertainment revealed its initial lineup of film and television properties arriving later this year on Blu-ray™ Disc, day and date with DVD, it was announced today by Craig Kornblau, President, Universal Studios Home Entertainment and Universal Pictures Digital Platforms. Marking the rollout of the studio's first global release on Blu-ray™ will be the "Heroes: Season Two," which will debut beginning August 26, 2008.

The highly anticipated premier of the sophomore season of NBC's "Heroes" will be buoyed by the simultaneous debut of "Heroes Season One" on Blu-ray™ . Later in the year and in time for the holidays, five of the year's most promising feature films will arrive in high definition: THE INCREDIBLE HULK, the action-packed new chapter of one of the most popular Super Hero sagas of all time that stars Edward Norton, William Hurt and Liv Tyler; Wanted, the action-thriller from stunning visualist director Timur Bekmambetov that stars Morgan Freeman, James McAvoy and Angelina Jolie; Hellboy II: The Golden Army, the epic vision of imagination from acclaimed director Guillermo del Toro; Mamma Mia!, the musical romantic comedy in which Meryl Streep leads an all-star cast in the adaptation of the beloved musical; and The Mummy: Tomb of the Dragon Emperor, the next installment in The Mummy franchise in which Jet Li, Maria Bello, Michelle Yeoh and newcomer Luke Ford join the returning Brendan Fraser and John Hannah for a supernatural adventure that shifts the series to the Far East.

"We're thrilled that our preliminary slate of Blu-ray™ offerings comprises such a brilliant collection of high-def centric fare," said Mr. Kornblau. "As awareness for Blu-ray™ continues to grow, consumers will learn to rely on the superior quality picture, sound, interactivity and connectivity that only high-definition home entertainment delivers."

The first wave of Universal Blu-ray™ releases, which hits U.S. stores July 22nd, gives fans of The Mummy franchise a chance to relive the iconic blockbuster films' thrilling beginnings in crystal-clear high-definition. The Mummy and The Mummy Returns, starring Brendan Fraser, and the hugely successful action-packed spin-off The Scorpion King, starring Dwayne "The Rock" Johnson, all will be released on Blu-ray™ for the first time that day.

The first of Universal's new theatrical Blu-ray™ releases hitting store shelves this summer day and date with its DVD counterpart is the apocalyptic thrill-ride DOOMSDAY, starring Rhona Mitra, Malcolm McDowell and Bob Hoskins. Other titles on deck for 2008 include American Gangster, Knocked Up, The 40-Year-Old Virgin, Miami Vice, End of Days, U-571 and Land of the Dead, among others.

Furthering Universal's aggressive rollout of Blu-ray™ product globally, Universal Pictures International Entertainment, the company's international home entertainment arm, is concurrently announcing its initial slate of Blu-ray™ releases for the international marketplace today.

Universal Studios Home Entertainment is a unit of Universal Pictures, a division of Universal Studios (www.universalstudios.com). Universal Studios is a part of NBC Universal, one of the world's leading media and entertainment companies in the development, production, and marketing of entertainment, news, and information to a global audience. Formed in May 2004 through the combining of NBC and Vivendi Universal Entertainment, NBC Universal owns and operates a valuable portfolio of news and entertainment networks, a premier motion picture company, significant television production operations, a leading television stations group, and world-renowned theme parks. NBC Universal is 80%-owned by General Electric, with 20% owned by Vivendi.

Unlike old school devices that use a clunky great machine, the Universal ECG can save electrocardiogram data directly to the physician's computer for analysis and sharing, which should save cash on printing out millions of the readouts each day. Though the device probably won't be as accurate as said clunky machine, its portability will surely make it a must for all those hypercondriacs among us. Feeling a little coronary ischemia coming on? (House rules.) [Medgadget]

The labels, particularly Universal, are known to be hot on a subscription deal, since it'd provide more reliable revenue from iPods—BW notes the average iPod owner buyers "fewer than 30 than songs" and rips or steals the rest. Apple, on the other hand, is already balling with iTunes just the way it is—now the no. 2 music retailer in the country—and it's really just money icing on the wildly profitable hardware cake. And if it's not busted, why tinker with it?

Since the labels really want a subscription model, it makes sense that label sources would play it up to the press, giving them more leverage at the negotiating table by showing the heavy buzz/demand the rumor is generating. Apple-side sources would spin the opposite way, since—if they really were considering a subscription model—it would give them weight to push down the price, both what they'd give labels and what they'd charge us. And as both the FT and NYT have noted, price is likely to be the major sticking point.

Conclusion? Be hopeful, not wistful. [Businewss]

Universal's the biggest proponent of selling subs, so they'll probably be there. Reportedly Apple wants to throw the labels $20 a device, which is only a little more than what the labels make off an iPod now in music sales, so they've got some gaping chasms to negotiate across. [Bits]

We have Atonement available on HD DVD March 18th—we have not announced anything additional.

Have a good weekend.

We're not going to tell you that HD DVD will somehow come back from the grave to eat Blu-ray's brains or anything Romero-esque like that. Even China's CH-DVD—an easily mass-produced sibling to HD DVD—once a looming HD DVD mercenary force on the horizon, now seems to serve the opposite purpose. By keeping Chinese firms busy with something other than Blu-ray, Hollywood's movie content may be kept safe from piracy, and big electronics brands may be able to hold onto their profit margins—at least for a short while.

No, the earth is Blu, and we are at least grateful for having a winner. Now begins a different kind of shakeup, where once friendly compadres like Sony, Pioneer and Panasonic start to lock horns with one another. This will bring multiple benefits, but here's what all parties involved need to accomplish:

1. Get the Spec In Order
Now that Blu-ray is fully in the spotlight, it's got to get its act together spec-wise. You may recall that we lambasted many Blu-ray supporters for only building 1.0 spec players, including the $1000+ home-theater flagships from Sony and Pioneer. Except for Panasonic's DMP-BD30 and the PlayStation 3 with up-to-date firmware, no current Blu-ray player can even handle the 1.1 spec with picture-in-picture, already appearing in certain Blu-ray discs (and quite the handful of HD DVD titles—but we'll get to that).

The place to be is spec 2.0, referred to as "full profile." Suddenly, it's Sony who is looking the best here, with not only the amazingly upgradable PS3 but two new players announced this week, the BDP-S350 and S550. For $400 and $500 respectively, they are set to deliver all of the features promised in the Blu-ray palette, including both picture-in-picture and BD-Live internet connectivity (with USB storage for downloaded content). Nobody else, with the possible exception of Daewoo, has even muttered about a 2.0 spec player.

Samsung's BD-UP5000 dual-format player is purportedly compatible with 1.1, but besides the fact that it's pricey even at $550 and requires a firmware update for full compatibility, it'll soon be discontinued. Given our initial experience with it, we say that it's best to wait and see what its successor, the BD-UP5500, can do. Heck, dual-format playback may not be all that necessary for long. But that brings us to another reason why you should wait...

2. Finalize the Video Library
We only need dual-format players as long as the library is split down HD DVD and Blu-ray lines. We are waiting for Universal, Paramount and DreamWorks to jump to Blu, and even once they do, it's not a certainty that they can simply re-release everything currently out on HD DVD. Universal claims 150 titles—surely the Bournes will go Blu as soon as Uni does, but how long do I have to wait for a Blu-ray of The Big Lebowski? Hell, it's almost worth scooping up an ultracheap HD DVD player now just to enjoy that one movie alone, 47 or 48 times in a row. At any rate, some speculation suggests that the remaining HD DVD studios may not even come around until summer or fall, depending on weird smoke-filled-backroom negotiations with Toshiba.

Even when all the studios are on the Blu-ray tip, though, a new problem begins to surface: second-edition releases of movies already on Blu-ray. Think about it: a handful of big Warner titles like 300 and Harry Potter and the Order of the Phoenix came out with more deluxe HD DVD versions which include picture-in-picture and certain online capabilities. Who's to say Warner won't re-release their 300 and Harry Potter Blu-ray discs with the same compelling extras, now that it's feasible on the Blu-ray platform? Warner is easy to single out because we have that comparison, but who's to say that half of the blockbuster movies out on Blu-ray now won't get a re-release with more interactive content when the spec 2.0 players saturate the market?

3. Bring On the Old-Fashioned Electronics Store Competition
Sony's more affordable new Blu-ray player will hit the market this summer for $400. Nothing built by Sony or anyone else should be considered before then, the one exception being the PS3. But even the Sony standalone at $400 is expensive, especially for a player whose capabilities are more or less the same as Toshiba's HD-A30 HD DVD player, now (in a price nose dive) selling for around $130. Only when Panasonic, Samsung and LG announce their own Blu-ray 2.0 players, will true competition finally exist. (Pioneer will launch a 2.0 player too, but it probably won't get involved in a price war.) It surely wouldn't be long after that that we see a full-spec Blu-ray player for $200 or maybe even less. Our bet is Christmas, since Sony doesn't seem like it will have anything on the market until "summer" and no one else is talking about their next Blu play.

There you have it, the three big reasons why you need to hold off on buying a standalone Blu-ray player, and amassing a library of Blu-ray to rival your intimidating DVD collection. Don't worry though. Your patience will have its rewards. And Christmas will be here again before you know it.

[Blu-ray on Giz; image source for "halt" parody graphic]

"While Universal values the close partnership we have shared with Toshiba, it is time to turn our focus to releasing new and catalog titles on Blu-ray," said Craig Kornblau, president of Universal Studios Home Entertainment.

"The path for widespread adoption of the next-generation platform has finally become clear. Universal will continue its aggressive efforts to broaden awareness for hi-def´s unparalleled offerings in interactivity and connectivity, at an increasingly affordable price. The emergence of a single, high-definition format is cause for consumers, as well as the entire entertainment industry, to celebrate."

"If an artist has just delivered an album from [the] studio, we could potentially deliver it to a limited number of users for a higher price. It's something we're quite keen to develop; for example, through our own B2C channels—artists' Web sites."

For one, charging more simply to get first dibs at an album is ludicrous on principle. But more to the point (that maybe they'll heed) this model really presents two choices: Hear it early for an artificially inflated price, or do so for free, probably less than an hour after it goes up. Temporality is not value added, and not all music fans are as eager to pay exorbitant prices for immediate access as some of Radiohead's cabal, so this seems like epic fail waiting to happen. Unless, god forbid, people pay up. In that case, we're all doomed. [Idolator, Moconews]

Inside that plastic jaw are a pair of adjustable arms with contact teeth on the end, so it can adapt to different battery configurations and sizes. While it certainly seems convenient, and might save you carrying around loads of chargers when you travel, how does it cope with varying battery voltages and currents, eh? Answer me that, Thanko. The universal charger is available in Japan for around $18. [Newlaunches]

Amazon MP3 has the only digital music catalogue that offers DRM-free tunes from all four major labels, with around 3.3 million tracks in the library, they are packing some weight. If that fact doesn't have Apple quaking in their boots, the competitive pricing should. We couldn't care less how Amazon and Apple get down and dirty, but as they are bound to be set for a fight, teeth gnashing and all, it can only mean good things for customers. DRM-free music will have a bigger global presence, and that should solidify its worth in the consumer market. Also, the ensuing price war is not going to be too bad either. After all, iTunes surely cannot keep their offerings priced above the competition, whilst simultaneously offering DRM gimped and comparatively expensive ($1.29), DRM-free tracks. It's about to get interesting—watch this space. [Amazon]

Monday, in fact, is the day the service goes live, and we cannot hold our wee we're so excited. Initially, only Windows Vista and XP will be supported, but the Macboys and girls see some action on March 18th.

The system will work by tracking all downloads, royalties will then be issued accordingly. It isn't too clear how that revenue will be generated, but expect some anal advertising to bombard a PC near you if you do give it a whirl. Still, we can't help our cynical judgement chiming in—how did Noah get two of every species on a wooden boat? He didn't—do you know what I mean? Nevertheless, we wait and hope for a legal, free, P2P music service, but we think eternal world peace is a little more likely by Monday. [Boy Genius Reports]

When we talked to Jodi Sally, Toshiba's VP of Digital AV Marketing, she said, "We still feel there's some value in HD DVD, but we're watching the market closely, waiting to see how sales go." Saying there's "still some value" in something is clutching at a reason not to throw it out, like your old bowling ball you haven't rolled in three years, or your dusty Laserdisc collection.

Consequently, we have a pretty good grip on where HD DVD and Universal stand. We think that rumors Universal's contract had expired and they're getting ready to jump are false for a couple of reasons, and not just because Graffeo told us: "Nobody talked to us. Everything that you see out there has never been substantiated."

We've heard on background from several insiders that Universal's contract with HD DVD runs through 2009, and that the contract is null only when the format is declared non-viable. Graffeo repeatedly placing the onus on Toshiba to declare HD DVD dead seems to confirm this. In addition to the above quote, we specifically asked him how HD DVD would react to Paramount jumping ship, and he responded "That's something you would have to ask Toshiba." In other words, everyone is basically waiting for the other shoe (or studio) to drop.

But several weeks ago, before Warner defected, things could have turned out quite different. One reliable source confirmed to us a few days before the Warner/Blu-ray deal went down, a Fox executive called Robbie Bach (Microsoft's head entertainment exec) confirming they were going exclusive to HD DVD, not Blu-ray. And if Fox went, the deal was that Warner would go, according to the same source. At the last minute, Fox decided to stick with Blu, effectively taking Warner with it. Toshiba's total surprise at the Warner shift corroborates that it was an 11th-hour move. Graffeo also confirmed that a bunch of HD DVD execs were on the plane to Vegas when the news dropped, so they had no idea.

So what happened? Don Lindich at the PIttsburgh Post-Gazette says Fox was handed $120 million by Sony to stay put, and Warner received around $500 million for painting itself Blu. BusinessWeek put the Warner number "closer to $400 million," which trumped the $100 million Toshiba was prepared to offer it. In our phone call with him, Warner's Kevin Tsujihara denied that a bidding war was a factor. While we believe money was on the table, we do believe that what Tsujihara is, strictly speaking, true.

Every studio wants the war to end—it's dragging down HD disc and regular DVD sales as people don't wanna buy Betamax 2 or get double-dipped with an HD version in a couple years. Warner Home Video is the biggest player in the video market, with a 19.7 percent market share, so it also had the most to lose with a drawn-out war slowly sapping away profits from both its foundation (DVD) and future platform (HD). Its market clout (plus Fox's follow-me plan) made it the Sandra Day O'Connor of the format war, allowing it tip the scales in favor of whichever side it landed on.

Let's talk about the timing. Another source told us that Warner had actually planned to make its announcement at CES. Making it just before CES effectively cut Toshiba and HD DVD off at the knees, and according to that source, led our man Billy G to chop out a 20-minute (?) portion of his keynote dedicated to HD DVD, in which Microsoft would declare a full-steam-ahead push.

The end result of the early announcement was the effective elimination of HD DVD from the show. Literally, the HD DVD camp canceled its own press event. The biggest beneficiary from the revised timeline was obviously the Blu-ray camp. The nagging detail here is that Warner's incentive to let the cat out of the bag early is seemingly only indirect—what did it directly gain from sucker punching Toshiba versus a slightly later announcement? Or would it have been more humiliating for Toshiba and the camp if Warner had smiled and hugged everybody through the show and then performed its judo chop?

The question of payouts is trickier. Why? Insiders tell us that the purported amounts—in the hundreds of millions, varying by camp and studio—are pittances in what is multi-billion-dollar game. It makes little sense to those in the know (on both sides) that the studios would be swayed to either side of the river by a drop in the bucket, or even a bucketful of money. (There is an exception or two, studios known for penny-pinching and an eagerness to jump at just a sliver of a profit.) More likely the payouts constituted good will or in some cases, just free money, as the commitment itself wasn't as hard as the coin.

We think the real power play, if there was one, came from within Sony, but it's hard to get to the bottom of it, given the number of Blu-ray proponents—i.e. mum cronies—in the CE business.

Where we officially are: The ball is in Toshiba's court, and Universal, Paramount and DreamWorks Animation are sticking with Toshiba until it calls it quits, which it may do if the market" for its players turns sour—according to Toshiba, the most recent price cuts may well lead to a sales bump before any kind of bitter end.

Where we actually are: Blu-ray execs are 100 percent confident they have won—publicly and privately in our conversations with them; dual-format swinger Samsung thinks HD DVD's back was broken on the Hollywood front and will be relegated to personally recorded content; an IDC analyst told us Toshiba may fall back on dual-format players, like Samsung and LG. It could have gone either way just a few weeks ago, but now it really is over for HD DVD.

Studios, execs and insiders: Wanna cut through the cloak-and-dagger BS and set the things straight for us and all consumers? Tell us the score, straight up, on the record.

–Additional reporting by Mark Wilson

Blu-Ray made up 90% of all next-generation DVD player sales. Now, we aren't mathematicians, but that is a hell of a lot. In fact, it is so much, looking at this image now actually leaves a ferrous-like taste in our mouths, due to its shocking, 90% increased, ironic eye candy status. [Japan Today; image via Picasa Online]

"I'm hoping Toshiba, Universal and Paramount will take the high road and, for the good of the entire industry, bow out [of HD DVD]. Universal and Paramount, in particular, need to jump on the Blu-ray Disc bandwagon so we can go into the new year with a unified front and a unified mission: To educate consumers about the advantages of high-definition media and convince them the time to transition from standard DVD to Blu-ray is the day they bring that HDTV into their home."

Update: Following the Variety report, Universal's Ken Graffeo, executive VP of HD strategic marketing and co-president of the HD DVD Promotional Group, declared "Contrary to unsubstantiated rumors from unnamed sources, Universal's current plan is to continue to support the HD DVD format."

However, Variety article doesn't say that they are going to abandon HD DVD and stands by the story, mentioning that "neither studio is ready to throw in the towel immediately, however. On Thursday, Universal broke its silence about the matter to say that it plans to keep supporting the format for the time being, a pledge Paramount made earlier in the week."

According to Variety "Universal is committed to a series of HD DVD promotions in coming months." At this time, only Universal and Paramount support the format but no longer exclusively. Sony, Disney, Fox, Lionsgate, Warner, New Line and HBO are all behind Blu-ray. Variety also argues that, with all those studios behind the format, retailers won't dedicate "premium shelf space to a dying format."

No matter how you look at it, the panorama is bad for HD DVD. It may be time to head to the bunker. [Variety and High-Def Digest - Thanks Randall and Jody]

No wonder labels don't want to deal with iTunes, this kind of deal is pure money: Imeem's paying the labels so that its users can do free promo work for them! Why pay to advertise your artists when someone else can pay you to do it? Hell, users even do all of the uploading work. If you recall, this kind of arrangement's familiar to Universal—they got kickbacks on every Zune sold—and more immediately, they've got a service going with Nokia that intuition says they're not hooked into for charity or a good time on your part.

While this deal's not really making too much headway in their battle against iTunes, it shows they're looking pretty much anywhere and everywhere that'll make 'em a buck while they look for an endrun around Steve. They probably won't get his contract with the devil canceled anytime soon, but it looks like they've found that internet thing they were looking for. Maybe they'll find that "Facebook" thing next. [WSJ]

"There's no one in the record industry that's a technologist," Morris explains. "That's a misconception writers make all the time, that the record industry missed this. They didn't. They just didn't know what to do. It's like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?"

Personally, I would hire a vet. But to Morris, even that wasn't an option. "We didn't know who to hire," he says, becoming more agitated. "I wouldn't be able to recognize a good technology person — anyone with a good bullshit story would have gotten past me."

The gist of all the suits against YouTube is that, because it doesn't pro-actively take down or automatically block copyrighted content, it effectively doesn't fall under the DMCA's safe harbor provisions. If Universal, Trent's former record label, hosts a site where a fan pulls a Danger Mouse with Year Zero and Prince's 1999, which Universal doesn't own, they think they'll be opening themselves to the same blasts they're pelting YouTube with. Then their lawsuit would be in jeopardy, and you can't have that.

Trent's thoughts:

While I am profoundly perturbed with this stance as content owners continue to stifle all innovation in the face of the digital revolution, it is consistent with what they have done in the past. So... we are challenged at the last second to find a way of bringing this idea to life without getting splashed by the urine as these media companies piss all over each other's feet. We have a cool and innovative site ready to launch but we're currently scratching our heads as to how to proceed.

Until now, Vudu has just seemed like a better alternative to CinemaNow or Movielink, IP-based video-on-demand that was ready-made for the living room. It still costs money to rent or own movies after you buy the the box, and content selection was limited to (very high quality) standard-def video. But now it's challenging the current state of HD.

Whenever we talk about the format war, there is always a segment of commenters who scream out "Neither!" in favor of the still nebulous digital download scenario. At the beginning of Blu-ray and HD DVD, Hollywood execs talked of a strict code: HD was for packaged disc-locked media only, while downloads had to be standard def. But Xbox Live changed that when it began distributing HD video for rent, and now, it seems, the floodgates are open. Even staunch HD DVD defender Universal seems eager to see what happens when you give customers to take their HD movies straight up, hold the shiny silver disc.

But there are good reasons why this doesn't yet signal the death knell of the disc formats:
• There's high-def and there's high-def. The video quality of Vudu's downloads is 1080i, impressive especially for film content, but a far cry from the 1080p favored by true videophiles. Also, packaged disc content can have higher-resolution audio at this point, too, though that will change as pipes widen.

• $25 for a software-only copy of a movie sounds a little steep, considering you can get the HD DVD of The Bourne Supremacy at Amazon for $20. iTunes had to sell albums for $10 at a time when CDs costs $15 or more. I think $20 is the most Vudu could really charge for HD download-to-own titles.

• Saving an HD movie to your Vudu may put the screws to the HD DVD/Blu-ray debate, but it also starts up another format war, what our own Matt Buchanan labeled the Infinite Format War. For the time being, an HD movies saved on your Vudu is going to stay there, and you won't be able to play it on your Xbox 360. Never say never, but that's the deal for now.

Press release:

VUDU AND UNIVERSAL STUDIOS HOME ENTERTAINMENT TO DELIVER BOURNE TRILOGY DIRECTLY TO THE LIVING ROOM IN HIGH DEFINITION JUST IN TIME FOR HOLIDAYS

Included With the Purchase of the VUDU Set-Top Box, VUDU Customers Get High Definition Versions of The Bourne Identity and The Bourne Supremacy and an Option to Purchase The Bourne Ultimatum Starting on December 11, 2007

VUDU Users Don't Need to Run to Video Store or Wait in Line on Release Day for the Ultimate Action Thriller

SANTA CLARA, CA - November 20, 2007 - VUDU Inc., the company that brings instant access to video content to the living room, announced an unprecedented collaboration with Universal Studios Home Entertainment to deliver the entire Bourne Trilogy in high definition (HD.)

In a groundbreaking HD arrangement, VUDU and Universal will offer the three installments of the franchise available through the VUDU service in HD with Surround Sound. Starting November 23rd, and for a limited time, VUDU will begin offering an amazing bonus to its existing and future VUDU customers that includes, with the purchase of their VUDU set-top box, permanent copies of The Bourne Identity and The Bourne Supremacy in HD - a $50 value. In addition, beginning December 11th, VUDU customers will be able to purchase The Bourne Ultimatum in HD for $24.99

By providing VUDU customers access to the Bourne Trilogy, VUDU expands its service to include HD content for the first time. These HD movies complement more than 5,000 titles available for rent or purchase directly through the television, without requiring a PC, cable service, or satellite TV subscription. The availability of The Bourne Trilogy expands on a previously announced agreement with Universal to deliver content in HD format.

"Digital delivery of HD movies through VUDU makes it easy for consumers to get the high quality content they most want to watch, when they want to watch it," said Tony Miranz, VUDU's Co-founder and EVP for Sales & Business Development. "Our agreement with Universal gives lovers of the Bourne series instant gratification in glorious HD right from the comfort of their own home. We share Universal's passion for providing viewers with the ultimate in video content, and look forward to collaborating on many more top-quality Universal releases."

"Universal is committed to providing new and innovative entertainment experiences for consumers," said Craig Kornblau, President, Universal Studios Home Entertainment and Universal Pictures Digital Platforms. "VUDU's breakthrough technology speaks to the evolving digital distribution market and is a perfect way for Bourne fans to get the best motion pictures in superior home video quality in the timeliest manner possible."

VUDU enables high-speed broadband customers to get instant access through their TV to more than 5,000 movies from all the major and more than 20 independent studios and distributors. VUDU delivers movies to consumers as they are released by the studios to DVD and maintains an up-to-date library of current releases. VUDU lets consumers watch the movie they want to watch when they want to watch it—no planning necessary, no computer required, no software downloads, and no cable TV service or satellite subscription needed.

Availability

VUDU can be purchased at select retailers and online including Tweeter, Magnolia, MyerEmco, Amazon.com ,VUDU.com, and other select AV retailers.

According to BusinessWeek, it works like this:

[Total Music will] get hardware makers or cell carriers to absorb the cost of a roughly $5-per-month subscription fee so consumers get a device with all-you-can-eat music that's essentially free. Music companies would collect the subscription fee, while hardware makers theoretically would move many more players.

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.

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.

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]

The people who have bought so far aren't early adopters, they are early, early adopters.

The thing is, iTunes is kind of a crappy "control" in this little experiment if the only variable being tested is the presence of DRM, because its sales dwarf every other store in the test. Moreover, Universal's buying AdWords to drive traffic to the DRM-free downloads, throwing in yet another variable. It doesn't line up very well with the scientific method I was taught in high school.

Reading between the lines, it seems clear that what's really being tested isn't DRM-free downloads, it's the non-iTunes market—is it possible to really move digital music without the iTunes/iPod machine?—and Universal's ability to flex its atrophying muscles.

EMI's move to DRM-free tracks months ago was dismissed by some as a risky and desperate play, a sign of its weakness as the smallest label of the Big Four—its shareholders recently approved its sale to a private equity firm. Universal, on the other hand, is the biggest label in the world.

That doesn't mean it's not a sign of weakness. iTunes isn't the only store that's not a part of the test: None of the participating outlets have hardware linked to it. If iTunes was the only control here, why isn't Zune a part of the game? Where's eMusic for that matter? Universal looks like its angling to promiscuitize the digital music market—make the same music easily available from many sources that will play on any device—in order to make labels still matter, and stave off its own impending irrelevance.

The broader, more positive take on the move—which isn't necessarily divorced from the other one—is that the industry is beginning to realize they don't have a choice: DRM-free is the only way to really spur the digital music market, and ultimately for them to even hope to generate the kind of revenue they used to. This rosier outlook would include, in our opinion, Universal selling DRM-free music on iTunes at some point in the future.

Will the two remaining Big Four labels follow suit and explore DRM-free downloads? Undoubtedly, this as much of a test for Warner and Sony BMG as it is for Universal. If Universal pulls the plug in January (and Sony and Warner will know before we do), probably not, unless they're looking for an edge against the competition. If this test becomes policy, it seems safe to say that left with little choice, the others will fall in line in short order.

From there, the real question is the iTunes question: What are the labels going to do about it?

Universal's full press release:

CHART-TOPPING HITS MARK OPEN-MP3 TEST BY UNIVERSAL MUSIC GROUP (UMG)
MARKET LEADER REMOVES DRM PROTECTION IN THOUSANDS OF TITLES DURING TEST
PARTICIPANTS INCLUDE GOOGLE, BEST BUY, RHAPSODY, AMAZON.COM, WAL-MART & PURETRACKS, AMONG OTHERS

New York, New York...Universal Music Group (UMG), the world's leading music company, today announced that it is continuing the testing of digital sales of tracks and albums without digital rights management (DRM) by making thousands of its albums and tracks available from its digital repertoire in MP3 form without DRM enabling, for a limited time.

"Universal Music Group is committed to exploring new ways to expand the availability of our artists' music online, while offering consumers the most choice in how and where they purchase and enjoy our music," stated Doug Morris, Chairman and Chief Executive Officer of UMG. "This test, which is a continuation of a series of tests that UMG began conducting earlier in the year, will provide valuable insights into the implications of selling our music in an open format."

As UMG's most comprehensive and extensive testing to date, the experiment will run from August to January and analyze such factors as consumer demand, price sensitivity and piracy in regards to the availability of open MP3s.

MP3s can be played on a full range of devices including dedicated MP3 players, mobile phones and the iPod. Regardless of the outcome of these tests, UMG will continue to support innovative digital models such as subscription and ad-supported services which rely on DRM as an enabling technology.

Albums and tracks that will be available during this test run the gamut from artists such as Amy Winehouse, Fall Out Boy, 50 Cent, Black Eyed Peas, Daddy Yankee, Mika, The Pussycat Dolls, Gwen Stefani, Maroon 5, Dr. Dre, Don Omar, Sting, Sugarland, Diana Krall, Paulina Rubio, Shania Twain, Nelly and Prince, to Bing Crosby, Elvis Costello, Reba McEntire, Count Basie, Dizzy Gillespie, Stevie Wonder, Johnny Cash and Patsy Cline, among many others.

Participants including Google, Wal-Mart, Best Buy Digital Music Store, Rhapsody, Transworld, Passalong Networks, Amazon.com and Puretracks, will offer downloads to consumers in the DRM-free audio format of their choice in a variety of bit rates. For the most part, the DRM free downloads will be offered at standard wholesale prices.

As part of this test, Universal will also be driving traffic to DRM-free downloads using Google's AdWords(tm) advertising program. Google ads will connect consumers directly to digital retailer gBox, Inc. (www.gbox.com) download store making the search and buying process as simple as possible. Because many consumers are searching for music and music related news and information online, Google is a powerful way to drive consumers to this test.

In addition, DRM-free downloads will also be available through artist and label-branded websites, including will.i.am.com, sum41.com, evefans.com, www.common-music.com, ryan-adams.com, blaqkaudio.com, dianakrall.com, sectionquartet.com, as well as defjam.com, islandrecords.com and classicsandjazz.co.uk, among many others.