Houston Chronicle: "Where There Be A Winner?" - High-Def Digest Forums
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Old 12-03-2007, 09:30 AM
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Default Houston Chronicle: "Where There Be A Winner?"

Hey folks. Here's an article I found in my local paper today. I've highlighted the Smackdown fodder. If you get a chance, click on the link and read some of the comments that the average consumers are leaving.


High-def war: Will there be a winner?
Analysts urge patience as costly DVD formats split the market

Copyright 2007 Houston Chronicle

Santa might have an easier time deciding who's naughty or nice this Christmas than choosing one of the next-generation DVD players for people on the good list.

But he also might be better off choosing neither Blu-ray Disc nor HD DVD at least if he believes Consumer Reports and some industry analysts.

The high-definition home-video formats both offer improved picture and sound quality over standard DVDs. The problem is the two formats are incompatible, forcing consumers to make a choice between players, which typically cost about $400.

To complicate matters, the major Hollywood movie studios have taken sides, so consumers need a Blu-ray player to see Spider-Man 3 but an HD DVD player to see Shrek the Third if they want to view the higher-quality versions of those films.

The situation has been compared to the Betamax-vs.-VHS battle of the late 1970s and early 1980s. Although there are some differences, the potential remains for consumers who pick the losing side to be left with obsolete equipment and movies. That's why Consumer Reports magazine in a recent issue is encouraging patience.

But the more accurate analogy is to compare the Blu-ray-vs.-HD DVD fight to more recent efforts by electronics companies to promote rival SACD and DVD Audio technology to replace CDs, Jupiter Research analyst Michael Gartenberg said in a September report.

Picking sides
For the most part, those formats have become obsolete because the growth of broadband Internet access has made it easier for music fans to download music. If consumers opt to start downloading movies, there won't be a need for Blu-ray or HD DVD, he said.

"This might be another format war that no one wins," Gartenberg said.

There is some evidence people feel differently about movies. A fall survey of U.S. households with Internet access found that 80 percent preferred DVDs to downloads, mainly because they're easier to share with friends, and users don't have to wait for the download, according to the Consumer Electronics Association, which did the survey.
"Consumers still have a strong tie to being able to hold something in their hands," CEA spokeswoman Jenny Pareti said.

But most shoppers are still likely to stay out of the fight until the prices come down, she said. Just 130,000 Blu-ray and HD DVD players were sold in 2006, not counting Blu-ray players included in the PlayStation 3 or HD DVD players with the Xbox 360, according to CEA.

Sales are up to 900,000 this year and expected to grow to 2.7 million in 2008, Pareti said. Neither format will appeal to the masses until prices drop to about $200 considered the magic number for electronics makers, she said. The CEA estimates the wholesale price on both Blu-ray and HD DVD will fall to $350 in 2008, so prices are coming down.

Last summer, Blu-ray was all but declaring victory when Paramount Pictures and DreamWorks Animation defected from that side, reportedly after HD DVD-maker Toshiba Corp. paid them $150 million to buy their support, according to The New York Times. Blu-ray claims Walt Disney Studios, Sony Pictures, 20th Century Fox and Lionsgate. Warner Bros. releases its movies in both formats.

For now, the two sides are claiming victory based on their studio alliances and encouraging shoppers to buy a player based on which movies they want to see.

"It doesn't matter how great your player is," said Andy Parsons, a Pioneer executive and chairman of the Blu-ray Disc Association. "If you don't have anything that's worth watching, it doesn't matter. Content is the biggest driver."

Waiting to see

So far the movie rental companies have stayed mostly neutral. Blockbuster recently said it would stock only Blu-ray in its stores, but both Blockbuster and Netflix offer both formats online.

"It looks like we're at a time when both formats can co-exist," said Jodi Sally, vice president of marketing for Toshiba's audio-visual group. "It's really dead even."
Not so, said Parsons.

"It's not nearly as neck-and-neck as people think," he said, claiming a 2-to-1 lead for Blu-ray based on movie sales and players included in the PlayStation 3, which the CEA does not count.
Houston resident Kevin Jackson can't decide which format he likes better.

He was given a Blu-ray player as a gift and has an HD DVD player with his Xbox 360 video game console. The pictures and sound are great on both, and other benefits, such as extra memory on Blu-ray and ethernet ports on HD DVD players, don't matter to him.

"It just depends on the movie," Jackson said.

The movies cost more than regular DVDs sometimes $10 or $20 more. Warner Bros.' Harry Potter and the Order of the Phoenix, due out Dec. 11, is listed at $30 for the DVD and more than $35 for HD DVD or Blu-ray. Season six, part two of The Sopranos is listed at $100 on DVD and $130 for HD DVD or Blu-ray.

But neither Blu-ray nor HD DVD backers expect many consumers to have both players. Both sides are hoping for strong holiday sales to springboard them into next year, though they admit it may be a while before either can claim victory.

"I think this Christmas is very important, but I think it's going to play out over the next year," Parsons said.

Sally said Toshiba's edge will come in pricing, with promotions bringing the price closer to the $200 mark. Toshiba currently offers a $400 model with a $100 rebate, she said.
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Old 12-03-2007, 09:37 AM
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CEA estimates the wholesale price on both Blu-ray and HD DVD will fall to $350 in 2008
Yea they pinned that one down
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