LEX It looks like we have a winner in the fight to determine the dominant format for high-definition DVDs. The see-sawing battle tipped strongly to Sony’s Blu-ray last week when film studio Warner Bros announced it would stop releasing films in the rival HD format backed by Microsoft and Toshiba. Roughly 70 per cent of new movies will now be released exclusively on Blu-ray. Toshiba appeared to be in disarray at the critical Consumer Electronics Show in Las Vegas. Its shares dropped 2.3 per cent yesterday to their lowest level since March. Sony, which will now face less pricing pressure, was up 0.7 per cent in a falling Japanese market.
Warner’s decision is good news for Blu-ray backers and even better for the industry as a whole. As in previous format disputes, consumers have been waiting for the dust to settle. Nearly 2.4bn standard DVDs were sold worldwide in 2007, compared with just 14.2m Blu-ray and HD discs combined, according to Screen Digest. If Blu-ray takes hold, sales could pick up. With more volume, prices of players and recorders could fall, further spurring demand and creating a virtuous circle. Sales of Sony’s PlayStation3 game console, which includes a Blu-ray player, could also get a boost.
But the change should not be overstated. Unlike video cassettes and DVDs, which spurred movie fans to create and then replace entire libraries, high-definition players are unlikely to have the same impact. HD movies look better, but the jump is not so great as to make older versions appear relatively unwatchable.
Others are already looking beyond DVDs to broadband delivery of movies, an area where the format is still up for grabs. Last week, Netflix, the DVD-by-mail company, joined Microsoft and a crowd of other companies that are trying to deliver on-line content to set-top boxes. The whole high-definition format skirmish may turn out to be yesterday’s war.
