Warner Goes Blu-Ray

I haven’t covered the developments in the format war between HD-DVD and Blu-Ray for a long time.
Since I last covered it, Paramount and Dreamworks went to HD-DVD exclusive for 18 months after being paid a great deal of money. Then HD-DVD players went to $100 for a short period before jumping back to their normal prices. Despite the huge increase in HD-DVD player sales, sales of actual movies remained firmly in the Blu-Ray side, especially when titles were available for both formats.
Warner, essentially the last format neutral studio out there announced recently that they would go with Blu-Ray exclusively staring in May 2008. Oddly, all the HD-DVD fan boys are complaining about rumors that Warner took a payment to go with Blu-Ray, which they didn’t seem to mind Paramount and Dreamworks taking a payment to go with HD-DVD. The reality is more likely that Warner saw its Blu-Ray titles outselling the same HD-DVD title by a rather large margin, and decided to make a move to end the format war seeing how customers have made a clear choice in terms of movie purchases, if they got a payment on the side, then all the more reason. The Paramount/Dreamworks move made less sense as by the time they made their move it was clear Blu-Ray was outselling HD-DVD in disk sells. HD-DVD fans also try to say you can’t count PS3 sales as part of the installed base of Blu-Ray players since many PS3 owners apparently aren’t aware that their PS3 can play Blu-Ray… how that is possible is beyond me…
HD-DVD fans confuse me. Sony/MGM/Columbia movies would remain Blu-Ray, regardless of how the war went. Fox would remain Blu-Ray regardless of how the war went. The only big Blu-Ray exclusive studio that HD-DVD could possibly win over was Disney, but Disney stuck to Blu-Ray. How is it that they thought the format could win? A bigger issue to me was the space limits of HD-DVD. Even Blu-Ray’s 50GB 2 layer format hits a wall when you turn down the compression, and people with higher end TVs can tell the difference between the two formats and see a better picture with Blu-Ray.
This isn’t to say Blu-Ray doesn’t have negatives. Sony is a big negative, thanks to their Rootkit issues and other negative moves, it puts some off Sony (oddly, many of those who complain about Sony complain also about Microsoft who would be a big winner if HD-DVD won)… and Blu-ray is seen largely as a Sony product, though more hardware vendors support Blu-ray then HD-DVD. Another big negative is that Blu-ray wasn’t actually finalized before it launched, and many early players will not be able to take full advantage of some disks. This was perhaps the biggest negative for Blu-ray, though most players coming out now, including the PS3 should be able to update to the newest standards. The other negative is that most people don’t have a good enough TV to tell the difference, and probably don’t care if they do, look how popular MP3s are despite being inferior to CDs. You average consumer doesn’t care about the quality, just the ability to get what they want.
Lots of people think down loadable content will win the day. I highly doubt this. Music is one thing, but I think most people want something tangible. Even if not, the problem is affordable broadband access isn’t that available yet around the world. Just a bit ago I noted how in New Zealand that they seem limited to ADSL, no cable modem and certainly nothing like Verizon’s FiOS. Further you have a data transfer limit. People seem to forget there are markets outside the US where broadband is fairly well available and is generally unlimited in data transfers.
There are rumors that the big HD-DVD exclusive (prior to the Paramount/Dreamworks deal), Universal, may start releasing on both formats after seeing the strong disk sells the Blu-ray studios were having and apparently disappointed by the return they were getting from HD-DVD exclusivity (then again, the rumors may be little more then negotiation tactic to get the HD-DVD pushers to pay them a fee). Assuming that Paramount/Dreamworks move back to duel formats after their 18 months are over, I think that would end the war… if Paramount/Dreamworks moved to Blu-ray exclusive, that would end the format war faster, regardless of Universal’s move.
We can’t go without mentioning porn since it was one of the things to help push VHS into the winners circle. HD-DVD has the lean on porn, though there are some Blu-ray. However, the market if far different now, so I don’t think porn will matter as much this time.

EDIT: There is a rumor that Paramount has a clause that it can escape HD-DVD exclusivity if Warner goes Blu-ray as it did and that they are going to exercise that option. If Paramount jumps ship, especially if it goes Blu-ray exclusive and not format neutral, then Toshiba should do the good thing, and make a concession speech.