Paramount, Universal and Warner Pledge Support to HD DVD

The endorsements, from Paramount, Universal and Warner, came about 3 a.m. Mon. to coincide with an evening news conference in Tokyo, where HD DVD co-developer Toshiba announced the “separate commitments” that included Warner siblings New Line and HBO. About 24 titles each are expected in the initial shipments from the 3 majors, comprising new 2005 movie releases as well as catalog. It had been speculated the announcements would follow the Thanksgiving holiday in the U.S. (CED Nov 22 p3), and Disney also would pledge for HD DVD.

Uniformly, the 3 studios said their selection was based on HD DVD’s ease and cost of replication, “robust” copy protection, and other enhancements over red-laser DVD such as picture and sound, advanced navigation tools and interactivity. Of particular interest to the studios was the Advanced Access Content System (AACS) of copy protection developed by a consortium of studios, CE and PC companies, and likely to be adopted for HD DVD.

The format’s capacity also appeared to suit the studios’ requirements. In the most recent HD DVD specs version, storage is 20 GB on a single layer, single-sided disc and 30 GB for dual layer. Warner in particular said that was “enough capacity that programming options are almost limitless.” That statement would seem to deflate Blu-ray’s claim of superior capacity: 25 GB for single layer, 50 GB for dual layer, and double those on dual- sided discs. Other studios agreed HD DVD’s capacity was sufficient. “It’s plenty -- 30 gigs are tremendous,” said one studio executive who requested anonymity. “It might be different if you're talking videogames, but we think in terms of filmed entertainment. If we wanted we could fit HD on an 8.5-gig DVD.” He dismissed Blu-ray’s claim to 50 GB capacity. “All we know today is 25 [GB] from BD,” he said. “And my son tells me 30 is more than 25.”

Warner’s announcement also cited “key advantages in the areas of durability and reliability” for HD-DVD. The disc’s physical structure is like DVD’s, with dual 0.6 mm sides bonded back to back, and the data bearing substrate nearly 0.6 mm below the playing surface. Blu-ray uses a 1.2 mm thick disc, whose data substrate is 0.1 mm below the surface, requiring a hard-coating or other protection against scratches or blemishes.

The studios cited an urgency to reach market with a prerecorded HD product to satisfy demand among the increasing number of HDTV homes in the U.S. Replication for HD DVD will be available sooner than for Blu-ray, and is based on “proven manufacturability,” said Warner Home Video (WHV) Pres. Jim Cardwell, echoing other executives whose studios endorsed HD DVD. “HD DVD is proven in mass production,” Cardwell told us. “Blu-ray is not yet proven in mass production.”

Replication for Blu-ray wasn’t likely before the 2nd quarter -- “not realistic for a 4th quarter launch,” said Tom Lesinski, pres.-Paramount Worldwide Home Entertainment, a WHV executive during the DVD launch of 1997. “It’s also a new technology, and somebody’s got to pay to tool up the factories. Ultimately that’s us, the studio customers. I can’t see any way it’s a safe choice,” he told us. Craig Kornblau, pres.-Universal Studios Home Entertainment, said: “We want to get going. There’s explosive growth in HDTV. It’s in 20% of DVD households and they're clamoring for hi-def video. So, we want to get to market as quickly as we can, and HD-DVD can be here in a year.” Kornblau too called HD DVD manufacturing “proven” and said “that takes a lot of risk out of this for the consumer, in terms of being able to get lots of content and at affordable prices.” U.S. replicators ready to produce HD DVD include Cinram, Deluxe and Technicolor, as well as Memory-Tech in Japan, executives said.

HD DVD’s studio proponents wouldn’t discuss HD DVD pricing, contending it was too early to finalize that and other details, such as which of 3 available compression methods would be used. Choice of codecs probably would be made title by title, depending on other costs, executives said. Meanwhile, royalty agreements for HD DVD software have yet to be completed, they said. “We didn’t spend a lot of time there,” Kornblau said, citing HD DVD’s other advantages.

Initial titles, and the split between new releases and catalog, were likewise undetermined by the studios. Warner will likely issue new releases on HD DVD and conventional DVD simultaneously, Cardwell said. As for catalog, numbers and titles would likely be determined by the projected HD DVD player and HDTV display bases, he said. Paramount will field at least 20 catalog titles plus new 2005 movies releases on HD DVD, Lesinski said. In deciding between Blu-ray and HD DVD, his studio “took a hard look at [Sony’s] PlayStation 3” but determined that videogame consoles wouldn’t be the “primary driver” of HD content. Asked about the possibility of Blu-ray recorders preceding the launch of prerecorded Blu-ray, Lesinski said, “I don’t think HD recording will drive the market as there are only 3 HD satellite feeds and a limited amount of broadcast programming in HD.” In comparison, “there will be enough HD DVD content in enough chains for national coverage next Christmas,” he said, anticipating that hardware and software will be available in the major CE chains and a mass merchandiser, and through key specialists.

Although the 3 studios said their selection of HD DVD was non-exclusive, all expressed firm commitment to the format. “Suffice it to say we believe HD DVD has a higher probability of success,” Lesinski said. Kornblau said Universal had no current plans for Blu-ray releases and “our full focus is on HD DVD.” Warner “strongly believes there should be only one format… and that’s a position we're hoping all industry parties will embrace,” Cardwell said. Another factor in Warner’s decision to back HD DVD was its belief that Toshiba “was at a more advanced stage of getting the hardware to the market,” he told us. By industry estimates, Warner has about 20% of the DVD market, Universal 17% and Paramount an 8% share. Disney is 2nd only to Warner with 19%, and although yet to endorse a format it has backed HD DVD in votes of the DVD Forum’s steering committee, and contributed footage for HD DVD demonstration. Sony Pictures, committed to Blu-ray, ranks 4th in DVD market share at 13%. Among studios so- far uncommitted to a format, Fox has 12% share, MGM 6% and Lions Gate 4%.

Former WHV Pres. Warren Lieberfarb told Consumer Electronics Daily he believed the endorsements should be viewed as a vindication of an HD DVD format he said was developed and approved through the open standards-setting process of the DVD Forum. The studios rejected in Blu-ray standards-setting through “a closed body process,” said Lieberfarb, who as a consultant to top Toshiba executives in Japan helped broker the endorsements.