dare567k's Journal: Warner Solves Blu-ray, HD DVD War With Total HD

LAS VEGAS -- On Tuesday at CES, Warner Home Video made a splash with its announcement of the company's Total High-Def disc, a disc that will put an HD DVD-formatted movie on one side and a Blu-ray version on the other. In true Hollywood fashion, this announcement was an orchestrated and visual event, right down to the coordinated flashes of red and blue--Warner's way of representing the competing factions. HD DVD was red (an outgrowth of the deep-burgundy border that surrounds HD DVD cases), while Blu-ray was assigned blue. Warner said its fellow Time Warner companies, New Line Entertainment and HBO, would also support Total HD. The company expects the disc to become available in the "back half of 2007." Both formats use blue-laser diode technology to deliver greater capacity than standard-definition DVD, enabling the discs to store high-definition content. The two formats are locked in a battle to become the next-generation, high-definition replacement for DVD. Intel, Microsoft, Toshiba, and Universal Pictures are among the staunch backers of HD DVD; a consortium of major consumer electronics companies, including Panasonic, Pioneer, Samsung, Sharp, and Sony, plus seven out of eight of the major film studios support Blu-ray. One Disc to Rule Them All The intention with Total HD is to remove the liability and confusion in the marketplace, and to drive consumers to adopt the high-def formats more quickly. Ronald J. Sanders, president of Warner Home Video, noted that between the two formats, sales of more than 9 million high-def-capable devices were being projected by the end of 2007. That figure is well ahead of the adoption rate of DVD, widely regarded as the most successful consumer electronics format ever. With DVD, 1.3 million players were in the market by the second year of their availability. "We know that consumers are hungry for high-def movies," said Sanders. Between sales projections from the HD DVD and Blu-ray camps, Sanders estimates that the potential revenue flowing to studios from disc sales could top $1 billion. "And that's just in the second year." At Warner, he said, "we think of total content sold, regardless of format. Both are great technologies. [But there's] consumer confusion and hesitancy surrounding these formats." That confusion is causing many people to wait before choosing one format, or the other. "The wait is over," Sanders told the audience with dramatic flair. "When you bring together red and blue, you get the best of both worlds, two great ideas on one incredible disc." "A two-format marketplace is not ideal," he concedes. "We can't change the fact that the current multiple-format marketplace is there." But with Total HD, "you can get all of the content with none of the risk." Good for Everyone Kevin Tsujihara, president of Warner Bros. Home Entertainment Group, notes that the Total HD disc is good for retailers (who only have to stock one disc), good for the studio (which only has to produce one disc), and ultimately, good for consumers. "Most importantly, it's much better for the customer. Unlike when confronted with the current two-format choice, almost half said they were more likely to buy hardware with this disc. It gives consumers security and choice. It gives them the security to know they won't be left with an obsolete library. It eliminates confusion and fear about choosing the wrong format." The packaging unveiled at CES shows a split border, with the HD DVD red color along the spine side, and the Blu-ray blue color mirroring it on the other side. New Disc Combines Specs The new Total HD disc was created by Warner Bros., but the company says that creating the disc wouldn't cost other studios anything. If a disc manufacturer and replicator has both HD DVD and Blu-ray Disc production lines, it can produce a Total HD disc. Warner declined to discuss the production costs of the disc, though it acknowledged that they were incrementally higher. "We're still working out the pricing," said Sanders. "We aren't announcing that here. It won't be materially more. We know what the manufacturing cost components are, and they won't be much more than regular HD discs." Sanders also noted that Warner's own research indicated that consumers were willing to pay a little more for the peace of mind of knowing the disc will play on whichever type of player they buy. It Can Do Everything The disc includes the same specs offered by each format separately--for example, either a 25GB or 50GB Blu-ray movie on one side, and a 15GB or 30GB HD DVD movie on the other. The intention, according to Warner, is to keep the feature sets of both versions intact so that the viewer will get the same experience whether they watch the Blu-ray version or the HD DVD version. But this means that content creators must design content that doesn't exceed the capabilities of either format. During the demonstration, Warner showed the same Superman 3 disc being played in a Philips Blu-ray player, a Toshiba HD DVD player, and LG's newly announced dual-format player. "If you put the disc into a dual-format player, the universe won't fall down around you," joked Warner's Steve Nickerson, senior vice president of Warner Home Video Market Management, during the demo. Potential Impact Unknown Warner says that it is taking this dual-format-disc approach in the absence of a détente in the format wars, and in recognition that multiple formats have coexisted within an industry before. "In an optimal world, we will just have one format. But if you look at the gaming world, multiple formats have coexisted before," says Tsujihara. Though the concept of a single disc that can play in both devices is an enticing prospect, Total HD's impact on the format war--and indeed on how consumers feel about amassing high-def video collections--is still unclear. "It's probably the best solution to date for addressing the retail stocking conundrum, but for its impact to affect the conundrum of the war, all of the studios would have to buy in," says Ross Rubin, director of industry analysis for the NPD Group. "And that doesn't seem likely."