Time Warner said top U.S. retailers will stock its proposed new DVD, which merges two competing formats on one disc, in a step toward getting consumers to pay more for better pictures and sound.

Best Buy, Circuit City Stores and Web seller Amazon will support the format, studio executives said Tuesday.
This is not a big surprise, especially if Warner stops producing and selling HD-DVD and Blu-ray versions, and just sells this ‘Total HD’ disc to both markets. (And I don’t see why they wouldn’t. Why produce 3 when 1 will do?)

But Total HD only make real sense for Warner and Paramount, the two studios that are sitting on the fence and selling both versions of the disc. If Universal switched to Total HD – game over, all studios would be selling Blu-ray and HD-DVD would lose their only exclusive. You know Sony is not going to switch to Total HD, because they’re committed to crushing HD-DVD and making BD the only format. For that matter, most of the BD-only studios feel the same way. Total HD is going to cost more to produce than HD-DVD or BD alone. You basically make one of each and put them together. So, in the long run, it is still better for all studios if one format dies. There is just too much incentive for the exclusive studious to NOT use Total HD, so I don’t expect a big shift.

HD-DVD made a lot of hay at CES over having more players in homes and more titles out. But they had a six month head start – and they only have more players in homes if you don’t count the PS3. The PS3 *alone* has sold over five times as many units as all HD-DVD player sales. And by the end of the year BD had 120 titles out compared to 160 for HD-DVD – and will soon over-take HD-DVD as BD studios continue to ramp up release rates. Now that more BD players are streeting, BD player sales are expected to over-take HD-DVD player sales this year as well – again, not even considering the PS3 which Sony still says will ship 6 million by April, and 10 million for the year. That alone will be more units than all other HD-DVD & BD decks combined, several times over.

The other problem is that with BD on one side and HD-DVD on the other, you can’t make a DVD flippy disc. HD-DVD’s combo format is a dual-sided disc with HD-DVD on one side and DVD on the other. That’s also one possibility for BD. While BD demo’d discs with BD layers ‘over’ DVD on one side, the format hasn’t been commercialized. And producing a flippy seems cheaper. So Total HD eliminates the ability to sell one disc to both markets.