WB and New Line Going Blu-Ray 'Final Nails in HD-DVD Coffin' -- Exec

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"For the good of film industry, Universal and Paramount must stop releasing in HD-DVD only so the $24 billion home video industry can avoid a crisis," states Blue Ray Technologies founder Erick Hansen. He cites 4.5 percent drop in DVD sales as example of Hi-def format war not only hurting transition to next gen format but present one as well.

Warner Bros. and now sister company New Line's announcements this weekend that they will go Blu-ray only are "the final nails in HD-DVDs coffin," said DVD pioneer and Blue Ray Technologies founder and CEO Erick Hansen. "With 75 percent of home video releases now coming from Blu-ray only studios, consumers will quickly realize it's foolish to buy an HD-DVD player that only plays one in four movies they want. Continuing the format war even for another month is hurting filmmakers, retailers and especially consumers."

"HD-DVD's slow death does not have to be a painful one for the film industry," industry veteran Hansen said. "With the other five major studios releasing in Blu-Ray only, Universal and Paramount need to act now and release titles in Blu-ray to heal the crisis that is threatening to stifle the $24 billion home video industry. They have to do whatever they have to with their HD-DVD agreements, so the whole industry can move forward and avoid a sales crisis."

"DVD sales have slipped for the first time since they were introduced, an alarming 4.5 percent in 2006," Hansen said. "Consumers are aching for a clear choice to upgrade to high definition equipment and film libraries to match their mass acceptance of HDTVs. And they are not buying DVDs like they used to as those might be as dead as VHS tapes in five years."

Hansen notes retail giants like Blockbuster and Target are now stocking only Blu-ray titles.

He added "The war was only kept alive by Paramount's $150 million deal with deal the Toshiba group to go HD-DVD, which even its top directors Steven Spielberg and 'Transformers' Michael Bay strongly opposed. That expires at the end of 2008, but perhaps Paramount can act sooner to modify the arrangement. Universal Studios might be able to go Blu-ray much sooner."

Hansen is one of the first to connect the HD war to slipping DVD sales, but he is not the only one. President of Warner Bros. Home Entertainment Group Kevin Tsujihara, in his statement on their decision to forgo releasing in HD-DVD noted that even sales of standard DVDs were affected because consumers appeared unsure over which format to go with. "That was kind of the worst of all worlds for us," he said.

"The window of opportunity for high-definition DVD could be missed if format confusion continues to linger," Warner Bros. chairman and CEO Barry Meyer said in his statement.

In the U.S., WB sold 60 percent Blu-ray, which has a higher 1080p resolution and more disc capacity, and 40 percent HD-DVD, which has 1081i, considered slightly inferior. A look at the Sunday paper electronics store ads for HDTVs clearly shows 1080p to be a key selling point.

"2008 will mark the end of the format war. Consumers won't buy the dying HD-DVD format at any price. Those who say it will survive, much less thrive, do not understand technology. HD-DVD isn't even true hi-def. It isn't even 1080p. We must get back to business and make movies, not war."

Pali Capital analyst Rich Greenfield said in a Web posting Friday that he expects the HD DVD format to "die a quick death, versus a prolonged format war."

"While we still expect overall consumer spending on DVDs to decline at least 3 percent in 2008, the risk of an even worse 2008 DVD environment has most likely been avoided by Warner's early 2008 decision," Greenfield wrote.

Viacom's Paramount Pictures (15.5 percent), which also owns DreamWorks SKG, dropped its support for Blu-ray and said it would start distributing films exclusively in the HD DVD format after receiving a reported $150 million in cash and incentives from the Toshiba-led HD-DVD group. Universal Pictures (11.4 percent), a unit of General Electric, also releases films only in HD DVD.

Besides WB/New Line with a 19.7 percent share of the theatrical grosses in 2007, other major studios that have decided to go with Blu-ray and their 2007 marketshare: The Walt Disney Co.(15.3 percent), Sony Corp.'s Sony Pictures (12.9 percent), News Corp.'s Twentieth Century Fox (11.9 percent) and Metro-Goldwyn-Mayer (3.8 percent).

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