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The truth behind HD-DVD's demise

Over the last two months we have witnessed certain events within the high definition market shifting in favour of Sony’s Blu-ray format, painting a rather bleak picture for Toshiba's competing HD-DVD technology. Many have since questioned whether or not the final nail is in the coffin, so to speak.

With this in mind, PSU takes the opportunity to examine the hard facts in the on-going format war from the past few months, and provide a handy summary of key events, which should hopefully allow you to make up your own mind on the outcome of this crucial battle.

The hardest blow to the format came during the Consumer Electronics Show in Las Vegas, when Warner Bros. Entertainment, along with subsidiary studio New Line Cinemas, announced that they would become Blu-ray exclusive, giving Blu-ray a majority in movie studio support.

"Warner Bros move to exclusively release in the Blu-ray disc format is a strategic decision focused on the long term and the most direct way to give consumers what they want," said Barry Meyer, Chairman & CEO, Warner Bros.

“The window of opportunity for high-definition DVD could be missed if format confusion continues to linger. We believe that exclusively distributing in Blu-ray will further the potential for mass market success and ultimately benefit retailers, producers, and most importantly, consumers,” said Meyer.

With this move, HD-DVD was only left with Universal Studios, Paramount Pictures, Dreamworks, and Weinstein Company where as Blu-ray now with over 20 studios exclusively supporting them. Consumers who are looking to purchase either player may want to look at what movies will be only available to each.

People can find such films as Transformers, King Kong, The Bourne series, Shrek, and upcoming films like American Gangster, Hellboy II: The Golden Army, and Kung Fu Panda on HD-DVD.  For those interested in Blu-ray, you’ll be treated to such films as Cars, Ratatouille, Casino Royale (James Bond), Saw, Pirates of the Caribbean Trilogy, and Spiderman Trilogy. Additionally, some upcoming films exclusively for Blu-ray include; We Own the Night, Lord of the Rings Trilogy, National Treasure 1&2, and for anime fans, Final Fantasy VII Advent Children.

Outside of film studios HD-DVD has also been losing support with retail stores. In June 2007, Matthew Smith, Senior Vice President of Merchandising at Blockbuster announced to the Associated Press that Blockbuster stores (1,450) will rent high-definition DVDs only in the Blu-ray format. In addition, UK retailer Woolsworth has also announced that they will move to selling Blu-ray only.

In an interview with CNN, Stephen Pope, Chief Global Market Strategist at Cantor Fitzgerald Europe stated that Walmart would be selling Blu-ray players exclusively in store. “Walmart said physically in our stores, we’re only going to sell Blu-ray players.

“You can get the high definition player [HD DVD] if you shop online with Walmart, but if it’s in the store, just Blu-ray,” Pope said.

Now even though the HD-DVD player is cheaper, some say it’s only a desperate move to stay in the game. Gartner, an information technology research and advisory company, made a statement calling the HD-DVD price cuts "useless resistance.”

In Jan. 2008, Hiroyuki Shimizu, Principal Research Analyst for Gartner in Japan stated that “Gartner believes that Toshiba's price-cutting may prolong HD DVD's life a little, but the limited line-up of film titles will inflict fatal damage on the format.”

"Gartner expects that, by the end of 2008, Blu-ray will be the winning format in the consumer market, and the war will be over," Shimizu said.

With Blu-ray vastly eclipsing HD-DVD in studio exclusivity, install base and consumer confidence, it's hard to remain optimistic for camp Toshiba as the high definition format war continues for the new year. Be sure to stick with PSU as we cover Blu-ray's on-going war with HD-DVD as 2008 gets underway.