High-def video struggle heating up
Battle of formats may anger buyers
By Gary Gentile
Associated Press
People who own an HD DVD player can forget about watching "Spider-Man 3" in high definition when it goes on sale during the holiday season. The movie from Sony Pictures will be available only in the Blu-ray DVD format.
Likewise, people with Blu-ray players won't be able to enjoy the action-thriller "The Bourne Ultimatum," which Universal Pictures will release only in HD DVD.
These exclusive arrangements, plus aggressive price cuts for high-def DVD players, are designed to persuade consumers to finally embrace one format or the other.
But analysts wonder whether the moves will anger consumers, just as the studios and consumer-electronics companies are hoping to boost high-def DVD sales as growth in standard DVDs stalls.
"The frustration for consumers is not knowing what format is going to win," said Chris Roden, an analyst at Parks Associates.
Consumers need to know their expensive equipment won't become obsolete if the competing format wins, said Steven J. Caldero, chief operating officer of Ken Crane's, a specialty electronics chain.
"People are still frustrated there is a format war to begin with," he said.
Until recently, many consumers were able to defer the choice because players have been so expensive. But prices have been slashed by about half. Sony Corp.'s Blu-ray player now sells for $499 and Toshiba Corp.'s cheapest HD DVD player sells for $299, with both likely to include up to five free movies as an incentive. (Dual-format players remain expensive.)
Both sides are also releasing blockbuster titles such as the new "Pirates of the Caribbean" movie aimed squarely at the demographic most likely to upgrade to high-def.
The stakes couldn't be higher for Hollywood, which has seen sales of traditional DVDs, once a reliable profit engine, slow to a trickle. Direct digital delivery online, while promising, is still years away from profitability.
Yet consumers remain profoundly confused by the two formats, both of which deliver crisp, clear pictures and sound but are completely incompatible with each other and do not play on older DVD players. Many haven't even heard of either format.
HD DVD, developed by Toshiba and backed by powerful companies like Microsoft, has the lead in standalone players sold because they are cheaper and hit the market first.
In the United States, standalone HD DVD players have 61 percent market share, while Blu-ray players have 36 percent share and the few dual-format players have a 3 percent share.
But Blu-ray, backed by Sony and most Hollywood studios, got a big boost when Sony introduced its PlayStation 3 game console, which comes standard with a Blu-ray drive. Counting those machines, there are more Blu-ray players out there.
Fighting back, the HD DVD camp is planning advertising touting the interactive elements of the format, which allow users to connect to the Internet to download special features.
Analysts said even lower prices for players could be the key to findina a format winner. Some believe that until prices hit the $200 range, consumers simply won't upgrade from their current machines, many of which cost less than $100.
Chinese-made HD DVD players selling for $199 are expected to hit store shelves by December, while Sony is widely expected to cut the cost of its Blu-ray machine to as low as $299 by year's end.

Post edited at 3:44 am on Sep. 19, 2007 by Rebecca li

-------
The very existence of flame-throwers proves that some time,
somewhere, someone said to themselves, You know,
I want to set those people over there on fire, but
I'm just not close enough to get the job done.