Paramount Goes HD DVD-Exclusive; The Format War is Far from Over
August 21st, 2007By Paul Erickson, Director of DVD and HD Market Research
With the recent announcement of HD DVD exclusivity by Paramount and DreamWorks Animation, the outlook on the next-generation DVD format war has been substantially changed. Formerly, it was widely acknowledged that the Blu-ray Disc camp held an advantage over HD DVD in the area of content, with greater studio support and exclusivity. With the announcement of HD DVD exclusivity by these two studios, the content argument in the competitive differentiation between the two formats has largely been rendered moot. For most intents and purposes, there is an equally rich portfolio of content available to mainstream consumers of either format. Both camps have large and small studios in the fold, and both camps offer a number of blockbuster titles and franchises exclusively.
The most likely outcome of this development is that this format war will continue longer than some may have previously expected. Many in the industry previously believed that Blu-ray’s studio support advantages and higher installed base—thanks to Playstation 3—would prove stronger than HD DVD’s cost advantages over the next year or two, and that the battle might be over by the end of 2008. With the content advantage rendered largely equal between the two formats, and HD DVD players approaching the $200 price point for this holiday season, it is not likely that HD DVD will be disappearing as a HD video format anytime soon. What is more likely is a protracted battle of attrition, likely lasting past 2009 until a victor can be declared. Variables in the battle that can affect the outcome over the long term will continue to be the price differential between the two formats, Playstation 3 sustained sales levels, and further exclusivity deals with studios.
This development is not likely to make the picture any clearer for consumers. While many consumers are likely to remain on the fence due to the uncertainty of the format battle, the increase in competition expected to be spurred by this announcement is still likely to benefit the segment overall. With increased aggressiveness in pricing and bundling expected over the next year, both formats’ players will substantially increase in attractiveness to mainstream consumers.
As the 2007 holiday buying season nears, it will be interesting to see what factors will prove strongest in influencing the consumer purchase decision for next-generation disc players, now that studio support is less of a competitive differentiator.
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2 Responses to “Paramount Goes HD DVD-Exclusive; The Format War is Far from Over”
By Nachoi on Sep 8, 2007 | Reply
“What is more likely is a protracted battle of attrition, likely lasting past 2009 until a victor can be declared”.
What if there is no need to declare a format victor… because customers simply dont need those formats?
Being High Definition Digital what the movies and audio are recorded into, means that the content could be stored or moved with any device capable to do so, therefore fastly come into perspective the net-ready pletora of gadgets being launched almost weekly.
To me, flash memory (SCD cards,etc) is a comparatively superior carrying tech, precisely because it has no moving parts inside, which is a clear level above in many respects (mechanical. jitter-free, electrical consumption, weight,etc)
////No wonder, past traumatic quibbles with vinyl, CD VHS/Beta, DAT/Tape, DVDA/DSD, etc have had a lasting memory effect on any related industry and customers…
Luckily now, the base HD digital format is not at question here, just the carrier, an area which is being expanded and advanced at too many fronts to be easily manipulated.