January 5, 2008 2:00 am
Warner Brothers is throwing its support exclusively behind Sony's Blu-ray format in a move that could prove decisive in a war between next-generation DVD technologies that has stirred up Hollywood.
Warner, one of Hollywood's largest studios and its leading player in home video, had been publishing its new high-definition DVDs in the Blu-ray format and in the rival HD DVD one pioneered by Toshiba.
However, Warner executives said yesterday the studio would exclusively release its films in Blu-ray beginning in June.
Warner cited a growing consumer preference for Blu-ray, especially in Europe and Asia, and concerns that a prolonged format war was hurting DVD sales, the studio's biggest revenue source.
"It was clear to us that the confusion in the market place about the two formats was leading consumers just to stand back from both of them," said Barry Meyer, chairman of Warner, which is a division of Time Warner.
Kevin Tsujihara, president of Warner's home entertainment group, said the decision would also benefit major retailers, including Wal-Mart, which have bristled at having to carry discs and players for both formats.
Warner's decision, on the eve of the annual Consumer Electronics Show, represents a major victory for Sony, which bet heavily on Blu-ray even as it was haunted by the loss its Betamax videotape format suffered to VHS a generation ago.
In addition to Warner, Blu-ray also enjoys exclusive support from Disney, Fox, Sony and MGM. "We expect HD DVD to die a quick death," Rich Greenfield, an analyst at Pali Research, predicted.
HD DVD, which is less expensive to produce than Blu-ray but offers less storage capacity, has exclusive backing from Universal Pictures. Its coalition, which includes Microsoft, appeared to strengthen its position late last year when Paramount, which had supported both formats, announced a two-year agreement solely to support HD DVD.
That deal included a $150m payment for Paramount, according to people familiar with the matter, enraging rival studio executives.
Mr Tsujihara said Warner's decision had been based on "what's best for the consumer and what's best for the industry", and was not influenced by financial considerations.
The film industry has been desperate for an heir to the traditional DVD, whose sales have begun to fall after years of double-digit growth.
The next-generation discs could influence a bigger battle between technology groups such as Sony, Microsoft and Apple to determine how films, video and other content are transmitted to the digital living rooms of the future.
Sony and Toshiba lowered prices dramatically this holiday season in an effort to gain traction. Blu-ray opened a narrow lead in the US in terms of titles sold. However, Warner executives pointed to its clear advantage in the UK, France, Germany and Japan.
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