First up is a Buy Two, Get One Free deal running through December 31st. It appears to be on Warner titles, with 112 of them to choose from.

And then there is a deep discount sale on Sony titles. While it is labeled as ‘up to 45% off’, 13 of the 17 titles in the sale are actually 54% off, three 45%, and one 44%.

Picked up from Format War Central and Blu-ray Stats News Log, respectively.

Personally I don’t think the Sylvania is worth consideration. It is a Profile 1.1 deck, one of the many rebadged versions of the Funai NB500. With the Profile 2.0 Samsung less than $12 more, there is no point in considering the Sylvania. So it really comes down to the PS3 vs. the BD-P1500. They’re both Profile 2.0 / BD-Live with the latest firmware. The PS3 is generally reviewed as one of the best, if not the best, BD deck available, but the Samsung is no slouch either. So if you’ll use the PS3s other features – gaming, broadband content downloads, etc, enough to justify the extra ~$200, go with that. Otherwise the Samsung is a solid choice and a good value.

According to the offer details, it is running through December 31, 2008. Though I expect they may shuffle the products available in the bundle over the next few months.

From Blu-ray.com

The Get Three for the Price of Two sale has been extended, with 36 titles to choose from.

Then you can save up to 55% off a selection of 95 titles.

If you have a PS3 but you don’t yet have the DVD/Blu-ray remote to go with it (using the SixAxis to control movies is fairly crappy), buy three Warner Blu-ray movies and get the PS3 remote free.

And last but not least, buy a Blu-ray player and three Warner Blu-ray movies and save $50. It looks like the players on offer include the Sony BDP-S300 Profile 1.0 for $199.98, the Sony BDP-S350 Profile 1.1 for $295.00, the Samsung BD-P1500 Profile 2.0 for $279.99, and the Panasonic DMP-BD30K Profile 1.1 for $274.81. (Personally I’d pick the Samsung.) On the movie side there are 122 titles to select from.

I’m really excited and happy to see this. It is good to see a traditional media company really diving into new distribution systems, and, even better, not re-inventing the wheel with yet another website or box – but embracing existing distribution channels. Personally the two that excite me the most, unsurprisingly, are TiVo and Sling. I’d love to be able to download WB TV content right to my TiVo, or watching it via SlingPlayer – or on a SlingCatcher. I’m a fan of animation, and The WB has produced some of the best modern TV animation (Batman, Superman, Justice League, Animaniacs, etc) and I hope all of that great content is available through this system. I’m really looking forward to this being available.

Press release below:

WARNER BROS. TELEVISION GROUP ANNOUNCES DISTRIBUTION AGREEMENTS WITH DAILYMOTION, JOOST, SLING MEDIA, TiVo AND VEOH NETWORKS TO LAUNCH NEW BRANDED CHANNELS

BURBANK, Calif. (June 12, 2008) – The Warner Bros. Television Group (WBTVG) has signed distribution agreements with a select group of preferred partners to launch a number of advertiser-supported branded channels in premium environments that will further WBTVG’s strategic expansion into the digital marketplace. WBTVG will work closely with Dailymotion, Joost, Sling Media, TiVo and Veoh Networks to launch channels that will include TheWB.com and KidsWB.com – the two new advertiser-supported broadband destinations WBTVG unveiled in late April at a press conference in New York City. The announcement was made today by Bruce Rosenblum, President, Warner Bros. Television Group.

The channels will launch in mid-September, providing WBTVG’s branded destinations with the added reach of the distribution partners’ target audiences, while giving consumers greater access to the Studio’s programming. The three-screen distribution strategy provides scale to advertisers, allowing them to associate with Warner Bros. brands through the expanding Warner Bros. digital arena, which gives advertisers access to targeted consumers via the Studio’s programming in a premium environment.

“These new premium partnerships fit our overall digital distribution strategy by providing users the opportunity to access our content where and when they choose,” said Rosenblum. “These partnerships will further the reach of the high-quality content we are creating to fuel our branded, ad-supported niche destinations which will benefit both the user and the advertiser.”

The branded channels at Dailymotion.com, Joost.com, Sling, TiVo and Veoh.com will offer, free of charge to consumers, full-length episodes of programming – some drawing from The WB Network, and others from Kids’ WB! and the Warner Bros. collection. In addition, selected original series will be made exclusively for TheWB.com, including “Sorority Forever,” an innovative mystery/drama from director/producer McG (the upcoming “Terminator Salvation: The Future Begins,” “Supernatural,” the “Charlie’s Angels” movies) and Big Fantastic (“Prom Queen”) that peeks behind the walls of one of the most intriguing secret societies in the world: the sorority. Additional series being made available will be announced at a future date. In addition to these branded channels, WBTVG and these preferred partners will launch two new themed channels: Classics WBTV, a channel featuring full-length episodes of landmark series from the vast Warner Bros. Entertainment collection of programs, and a Sci Fi channel, including complete episodes from a selection of the Studio’s science fiction titles.

A premium, ad-supported, video-on-demand, interactive and personalized network targeting the Adults 16–34 demographic highly coveted by advertisers, TheWB.com will feature original programming created or acquired specifically for TheWB.com – including series from director/producer McG and writer/producer Josh Schwartz (“Gossip Girl,” “Chuck,” “The O.C.”); the re-release of a collection of The WB Network’s most popular series and other successful programming – and an extensive network of distribution partners. Designed for children aged 6–12, KidsWB.com is a premium, ad-supported destination built around youth-oriented, immersive entertainment which unites the Studio’s libraries of animated characters and programming, including Warner Bros. Animation, Looney Tunes, Hanna-Barbera and DC Comics.

These announcements follow the creation of branded channels for TheWB.com and KidsWB.com on AOL, as well as the launch of an original application on Facebook® Platform that allows seamless integration of Facebook’s social utility on TheWB.com, and TheWB.com’s entertainment content on Facebook. WBTVG’s Digital Media Sales team will handle the advertising inventory for both the broadband and wireless marketplaces.

About Warner Bros. Television Group
The Warner Bros. Television Group oversees the entire portfolio of Warner Bros. television businesses, including worldwide production, traditional and digital distribution and broadcasting. WBTVG is committed to creating, producing and distributing content across all traditional, emerging digital and future platforms in the evolving entertainment and media landscape. In the traditional television arena, WBTVG produces primetime, first-run, cable and animation series which are distributed worldwide. WBTVG is also an innovative leader in developing new business models for the evolving digital television marketplace, including ad-supported video-on-demand as well as broadband and wireless destinations featuring original content produced by WBTVG. The Group provides unmatched digital media sales opportunities tailored to clients seeking multiplatform campaigns across broadcast, cable, broadband and wireless outlets. Warner Bros. Entertainment is also a partner with CBS in The CW Television Network.

About Dailymotion
A top 50 website worldwide (source: Alexa), Dailymotion is the world’s largest independent video entertainment website (source: comScore, April 2008). Every day, over 15,000 new videos are uploaded into Dailymotion’s global network of localized video entertainment sites. Every month, over 36 million unique users (source: comScore, April 2008) stream over 900 million videos including curated content from premium and Motionmaker creative contributors. Using the most advanced technology for both users and content creators, Dailymotion provides high-quality and HD video in a fast, easy-to-use Web site that also automatically filters infringing material. Dailymotion’s mission is to provide the best possible entertainment experience for users and the best marketing opportunities for advertisers, while respecting content protection. For more information, please visit http://www.dailymotion.com.

About Joost™
Founded by Janus Friis and Niklas Zennström, Joost brings video and social interaction together online. All of video on Joost is professionally produced and streams on-demand to people around the world for free in a high-quality format. Today, Joost has more than 30,000 program elements, including more than 400 television series and 1,200 movie and short film titles. To learn more about Joost, visit www.joost.com.

About Sling Media
Sling Media, Inc., a wholly owned subsidiary of EchoStar Corporation (NASDAQ: SATS), is a leading digital lifestyle company, offering consumer services and products that are a natural extension of today’s digital way of life. Sling Media’s product family includes the internationally acclaimed, Emmy award-winning Slingbox™ that allows consumers to watch and control their living room television shows at any time, from any location, using PCs, Macs, PDAs, and smartphones. In addition, Sling Media will offer a forthcoming video destination site, Sling.com, which will combine long form, premium content from a variety of media partners with clipped, short form content created and shared by Slingbox customers using Clip+Sling creating a truly unique site for both Slingbox customers as well as the community at large. For more information on Sling Media, or the Slingbox, visit www.slingmedia.com. For more information on Sling.com, visit www.sling.com.

About TiVo Inc.
Founded in 1997, TiVo (NASDAQ: TIVO) pioneered a brand new category of products with the development of the first commercially available digital video recorder (DVR). Sold through leading consumer electronic retailers, TiVo has developed a brand that resonates boldly with consumers as providing a superior television experience. Through agreements with leading satellite and cable providers, TiVo also integrates its full set of DVR service features into the set-top boxes of mass distributors. TiVo’s DVR functionality and ease of use, with such features as Season Pass™ recordings and WishList® searches and TiVo KidZone has elevated its popularity among consumers and has created a whole new way for viewers to watch television. With a continued investment in its patented technologies, TiVo is revolutionizing the way consumers watch and access home entertainment. Rapidly becoming the focal point of the digital living room, TiVo’s DVR is at the center of experiencing new forms of content on the TV, such as broadband delivered video, music and photos. With innovative features, such as TiVoToGo™ transfers and online scheduling, TiVo is expanding the notion of consumers experiencing “TiVo, TV your way.®” The TiVo® service is also at the forefront of providing innovative marketing solutions for the television industry, including a unique platform for advertisers and audience measurement research. The company is based in Alviso, Calif.

About Veoh Networks
Named one of AdWeek’s Top 10 Digital Hotlist sites in 2007, Veoh Networks is an innovative Internet Television company that delivers broadcast-quality video programming via the Internet. The Veoh Networks portfolio includes Veoh.com, one of the most popular video hosting services on the Internet, and VeohTV, a free downloadable application that turns online video into Internet Television. Veoh.com has more than 100,000 content publishers – from CBS, Viacom’s MTV Networks, FEARNet, Lions Gate, PBS, National Lampoon, Road and Track and Us Magazine to thousands of independent filmmakers and content producers – and currently attracts over 28 million unique users per month. VeohTV makes it easy to turn any computer into a digital video recorder that allows viewers to watch and record shows from thousands of Internet video sources. For advertisers, Veoh offers compelling ways of engaging with a targeted audience and measuring performance of their ad buys. Veoh Networks is a privately held company that is backed by leading technology and media investors, including Shelter Capital Partners, Spark Capital, Michael Eisner’s Tornante Company, Goldman Sachs, Time Warner Inc., Intel Capital, Adobe Systems Incorporated, Gordon Crawford, Tom Freston and Jonathan Dolgen. The company’s principal offices are in Los Angeles and San Diego, California.

# # #

Contact: Tammy Golihew
Warner Bros. Worldwide Television Publicity
(818) 954-4855

WARNER BROS. TELEVISION GROUP DIGITAL PARTNERS RELEASE ADDENDUM
June 12, 2008

DAILYMOTION
“We are pleased to bring Warner Bros. Television Group’s content to Dailymotion where our users can enjoy it on our high quality video player,” said Joy Marcus, General Manager of Dailymotion US. “Warner Bros.’ programming is a strong addition to our repertoire of curated channels consisting of leading premium and creative user video.”

JOOST
Yvette Alberdingk Thijm, executive vice president of content strategy and acquisition for Joost, said, “The Warner Bros. Television Group has been a great partner of Joost for more than a year. The Studio is leading the way when it comes to innovative content development and distribution strategies, and we are looking forward to growing our business with them.”

SLING MEDIA
“We’re extremely proud and excited to be in business with the Warner Bros. Television Group who understands the importance of access to content on all platforms,” said Jason Hirschhorn, president of the Sling Media Entertainment Group. “Their programming is going to be an important backbone to our forthcoming site Sling.com.”

TiVo
“We are excited to have The WB’s original content sent directly to the homes of our TiVo subscribers,” said Tara Maitra, GM and VP of Content Services at TiVo Inc. “TiVo provides the best way to watch TV, and as we continue to add new content from partners, such as from The WB, we provide the best overall entertainment experience.”

VEOH
“Warner Bros. has long been a leading brand in high-quality entertainment, so we are very pleased to partner with them as they embrace the Internet Television space,” said Joshua Metzger, Senior Vice President of Corporate Development, Veoh Networks. “The fresh, youthful programming that Warner Bros. Television Group provides is a perfect fit for Veoh’s young, influential and highly engaged audience.”

Disclaimer: I’m currently employed by Sling Media.

We’ll see how they fare once Warner stops releasing HD DVDs at the end of May, not to mention their big 85th Anniversary push on DVD and Blu-ray.

While that is indeed a significant rebound for HD DVD, remember that for the week ending January 5th, which is mostly before Warner’s announcement late on the 4th, the split was 51:49 in favor of Blu-ray. This shows a shift in standalone player sales from roughly 1:1 to nearly 2:1, despite massive price cuts on HD DVD players. Toshiba has cut the MSRP of their entry level players in half – $299.99 to $149.99 for the HD-A3 and $399.99 to $199.99 for the HD-A30, as well as cutting the HD-A35 from $499.99 to $299.99, and they’re still significantly down in market share. This is bad news for HD DVD. They’ve been claiming that price will be the deciding factor, that consumers will flock to HD DVD players due to the lower pricing. However, during the holiday season, before the price cuts, Blu-ray managed to take more than half the market for standalone player sales – despite being more expensive. And now, despite Toshiba’s deep price cuts, Blu-ray has actually increased their market share without any real marketing efforts.

I realize that a few weeks of data doesn’t determine a long term trend, but there really isn’t a positive spin for HD DVD here. Sure, they regained some market share from the previous week, but that was expected. Note that these figures do not include the PlayStation3 or the Xbox 360 add-on drive, which would skew things even more for BD. (The PS3 is problematic since there is no way to know how many are used as Blu-ray players – more than none, less than all.) Even with a near equal split in standalone player sales HD DVD was losing the war, with media sales skewed strongly toward BD – 2:1 in the US and even more elsewhere. If BD sustains a strong lead in player sales that split will only increase.

Toshiba is trying to buy marker share with subsidized players. They were subsidizing HD DVD player sales before the price cuts, now those subsidizes must have increased dramatically to cover the dramatic drop in MSRP. And this is taking its toll on Toshiba’s bottom line. They’ve just posted a 25% drop in quarterly operating profit. The majority of this drop was due to a drop in market prices for flash memory chips, but some of it is also due to losses in their HD DVD business. As CNET News reports:

Toshiba, whose products range from washing machines to nuclear power plants, is also fighting losses in its HD DVD player business, he said, without detailing the size of the loss.

Toshiba slashed prices on its players by 40 to 50 percent after Time Warner’s Warner Bros. studio announced this month that it would release high-definition DVDs only in rival Sony’s Blu-ray format.

Toshiba’s tactic of buying market share with subsidies isn’t working, and hasn’t been working for several months. Despite a price advantage, HD DVD was unable to sustain the standalone player sales lead it formerly held over BD. And that gap continues to increase, quite dramatically these past couple of weeks. Toshiba’s subsidies have likely had the side effect of keeping other vendors out of the HD DVD market – it is tough to compete profitably when the main vendor in the market is selling products at a loss. Why would someone by a Venturer HD DVD player when the Toshiba is less?

What moves do HD DVD and Toshiba have left – aside from a Super Bowl ad? Their price advantage hasn’t worked. Increasing the gap with price cuts couldn’t turn the tide, it just reduced the losses. They’ve lost studio support and over the coming months the imbalance in releases will grow. Right now HD DVD’s pending releases are few and far between when compared to Blu-ray, and it gets worse once Warner turns off the HD DVD tap. So content isn’t going to drive sales. I suppose Toshiba could start giving away the HD DVD players for free. Even I’d take one for free, they do upscale DVDs decently.

On a somewhat related note, Sony is getting aggressive in Germany. They’re offering a trade-in deal on their BDP-S300 Blu-ray player for owners of HD DVD players. Trade-in your HD DVD player at German retailer Saturn and get €150 off the €499 BDP-S300. This deal is only available at Saturn stores in Germany. Picked up from HiFi Forum via Blu-ray.com. As Blu-ray.com points out, overall high-def player adoption in Germany is much lower than in the US. So offering this kind of deal there will cost Sony much less than it would here, so we’re probably not going to see a similar deal. Though it would be nice.

Impress AV Watch reports that Hitachi will be bringing a second-generation hybrid hard drive/Blu-ray camcorder to market. The DZ-BD9H will sport a 60GB drive and support 8cm mini-BD discs, as well as 8cm mini-DVDs (SD recording only). Each mini-BD cal hold about 1 hour at the max 1920×1080 resolution, or roughly 2 hours at 1440×1080 with a reduced bit rate. Via Engadget.

But the biggest news comes from the new figures from NPD Group by way of The Digital Bits. They showed a dramatic shift to Blu-ray in hardware sales. In December Blu-ray took 60.19% of the standalone high-def player sales to HD DVD’s 39.81%, that’s not counting Sony PS3 or Xbox 360 HD DVD add-on sales. And that’s with HD DVD’s general price advantage and player sales. Even worse for HD DVD, for the first two weeks of January that balance has shifted to 69.41% BD, 30.59% HD DVD.

But that’s not the whole story. NPD broke down the ratios for the first two weeks of January. For the week ending January 5th, which mostly pre-dates Warner’s Blu-ray announcement on the 4th, the ratio was a more favorable 51.17% BD, 48.83% HD DVD. But for the week ending January 12th, after Warner’s announcement, the figures are a stunning 92.53% BD, 7.47% HD DVD. Clearly the Warner announcement had a strong impact on the market. It looks like a lot of people who were holding off on making a high-def purchase decided it was time.

I don’t expect that ratio to hold, especially with Toshiba’s price cuts which took effect on the 13th, but I don’t think HD DVD will be able to take the majority. Even with a price advantage favoring HD DVD, BD has been able to steadily gain ground and take more of the market. That growth is one of the factors Warner cited in their decision. Via Blu-ray.com.

They repeat a rumor I’ve seen reported elsewhere, that Fox has been considering switching to HD DVD, and if they did Warner was going to go HD DVD exclusive as well. The studios want the format war to end, and Warner knew that without one of the BD studios defecting to HD DVD that the format wouldn’t have the critical mass to win. The rumor is that Fox was ready to make the jump with Warner, to end the war, but at the last minute the BD camp, likely Sony, paid Fox $120 million to stay with BD. When Fox backed out, Warner recognized that the only option to end the war would be for them to go Blu as well. There are rumors that Warner was paid $400-$500 million to go Blu, but Warner has denied a payoff, saying there was no ‘bidding war’. They point out that the market at stake is worth billions, so any payoff would be a drop in the bucket.

Gizmodo says that, from their contacts, the feeling within the HD DVD camp is that HD DVD is done for. They report that the rumors of Universal’s HD DVD exclusivity contract being expired are false and that it runs into 2009. And that Universal would only be able to release Blu-ray if HD DVD is declared no longer viable, so Universal is hanging on Toshiba’s word. Microsoft has also deferred to Toshiba on the fate of HD DVD. And everyone seems to be watching Paramount & DreamWorks Animation. If they begin releasing Blu-ray again, that could be the final tipping point for Toshiba to throw in the towel.

Gizmodo goes into some of the behind the scenes drama involved with Warner’s pre-CES announcement. One source told Gizmodo that the surprise announcement caused Bill Gates to drop a segment of his CES keynote which was to focus on HD DVD, pledging continued support. And we already know the HD DVD Promotional Group canceled their press release at CES. In fact, HD DVD had almost no presence at CES after Warner’s announcement. Toshiba and the studios pulled all of their planned HD DVD announcements.

Taking a cynical view, the current Toshiba price cuts on players could be a way to clear out existing stock before making any kind of announcement. If the HD DVD camp throws in the towel Toshiba and the studios would be left with a lot of stock. And waiting until the return windows close on holiday sales could avoid a rash of product returns from those with buyers remorse. There have already been reports from users returning their HD DVD gear due to the Warner announcement.

EngadgetHD also made me aware of an article in Video Business about the shift in the retail world toward Blu-ray since Warner’s announcement. Trans World Entertainment, Newbury Comics, Video Buyers Group and Hastings Entertainment are beginning to emphasize Blu-ray over HD DVD.

Trans World operates over 800 F.Y.E. retail locations, and they will be giving more room to BD titles than HD DVD titles. Going forward they will be ordering ‘key’ new releases on HD DVD, while continuing to stock most of the released BD titles. Customers will be able to special order HD DVD titles that are not stocked.

Hastings Entertainment is continuing to stock HD DVD, but sees a shift to an emphasis on Blu-ray in their stores.

Newbury Comics plans to cut back on the ‘copy depth’ of HD DVD titles compared to BD. Before the Warner announcement they were ordering about half the copy depth on HD DVD as BD, and that will shift to 1/3 to as little as 1/4. And going forward they may only stock HD DVD at specific retail locations have have show strong HD media sales.

The Video Buyers Group supplies a large number of retail outlets. Due to the market confusion stemming from the format war roughly half of their members, 600-800 stores, have avoided offering either format. With Warner’s announcement and the perceived shift in the market to Blu-ray, VBG is preparing a new BD introduction package to help stores launch a new Blu-ray high-def section.

Major retailers, like Best Buy, are still selling both formats for the time being. But there is likely to be a natural shift toward Blu-ray simply due to more titles being available on the format as Warner, and other studios, stop releasing HD DVD. There will naturally be more titles on BD, which translates to more shelf space.

The last outlets to see a shift will likely be online, like Amazon.com. Since they don’t have the same shelf-space limitations as physical stores, and their unit costs for stocking the formats is much lower, they can continue to offer both formats the longest.

But there is a positive feedback loop forming now. With Warner, New Line, HBO, and other studios dropping HD DVD in the coming months, there will be a shift in available titles to BD. This will naturally create a further shift in media sales toward BD. As retailers shift shelf space to BD this will reinforce that shift in sales. And as the sales shift there is more incentive for retailers to increase their focus on BD, further reinforcing the sales shift. And as the shift increases and HD DVD sales suffer, there will be growing pressure on the studios to release their titles on BD.

As far as I’m concerned, it can’t happen soon enough. I want to see the industry backing one format, moving the technology forward.

With Warner Home Video dumping HD DVD, the format has the support of just two of the six major studios. It cannot win. At best, it can be a spoiler, but I’m hoping Toshiba, Universal and Paramount will take the high road and, for the good of the entire industry, bow out. Universal and Paramount, in particular, need to jump on the Blu-ray Disc bandwagon so we can go into the new year with a unified front and a unified mission: To educate consumers about the advantages of high-definition media and convince them the time to transition from standard DVD to Blu-ray is the day they bring that HDTV into their home.

I agree completely. At this point HD DVD cannot win. The only choice is between a prolonged war and a unified market that can move forward as one. Toshiba has done some good work on HD DVD hardware, work they could just as readily apply to Blu-ray and produce some top notch players. Their HD DVD player platform could very readily be converted to Blu-ray.

A unified HD format market would reduce consumer confusion and hesitation and help speed adoption. It would also encourage investment in production infrastructure, which has lagged as companies are worried about investing in plants for the wrong format. It is time to put the war behind us and work on improving the product offerings. At this point continuing the fragment the market is just sour grapes and being sore losers.

If Toshiba, Universal, and Paramount won’t do the right thing, the Best Buys and Wal*Marts of the world could end the war too. Someone, step up and stick a fork in HD DVD. Put it out if its, and our, misery.

Via Blu-ray.com.

First up, Variety is reporting that Universal’s exclusivity contract with HD DVD has expired. This leaves them open to releasing on Blu-ray. They’re committed to some HD DVD promotional efforts in the coming months, so they may not announce a change until after fulfilling those commitments. Via EngadgetHD.

Universal has stated:“Universal’s current plan is to continue to support the HD DVD format.” Sure, that’s their ‘current’ plan, and I believe that. Note that a couple of weeks before making their Blu-ray exclusivity announcement Warner denied that a change was in the works. How was that worded?“We have made no decision to change our present policy which is to produce in both HD DVD and Blu-ray.” Present policy, current policy… same thing. Universal will release Blu-ray, count on it. But it may be a few months off yet before they announce anything.

Furthermore, despite NBC Universal having a fairly good sized pavilion at CES, Universal confirmed to High-Def Digest that they will not be making any HD DVD title announcements at CES, despite having been expected to do so. The previously couple of years have seen a number of Blu-ray and HD DVD titles announced during CES by the various studios, but this year the HD DVD camp has been silent, while the Blu-ray camp has talked up their future plans. It seems that the hD DVD studios have decided to consider their options before committing to any further announcements.

And the persistent rumors that Paramount and Universal will go neutral, and possibly switch to Blu-ray, just won’t go away. They got more fuel today from Bill Hunt at The Digital Bits:

We remain convinced that both Paramount and Universal are moving towards announcing Blu-ray Disc support soon, and we have real reason for that belief, not the least of which is that our sources in this situation are second to none – a fact which should be readily obvious by now. Announcements could happen tomorrow, they could happen next week, they could happen next month. We’d be surprised if it took longer than a month or two. We’re hearing that Universal may not announce until February at the earliest, as we’re given to understand that their contract period with the HD-DVD camp expires at the end of January.

There is even more at the site. Bill is well connected in the industry and he’s had the scoop on a number of issues in the past, so I wouldn’t write off what he has to say too easily. (Via EngadgetHD.)

And the LA Times is reporting that Warner’s move did trigger an exit clause in Paramount’s exclusivity contract with HD DVD.

Warner Bros.’ decision last week to start making movies exclusively for Blu-ray players, rather than HD DVD, triggered an “out” clause in Paramount Pictures’ contract with the HD DVD camp. An industry source said there was a significant possibility that Paramount would exercise that clause. It plans to decide within a month.

It seems they noticed something that I had made note of myself as well:

That enthusiasm appears to be shared by the show’s attendees, who flocked to the numerous Blu-ray displays on the show floor. The numbers were noticeably thinner at similar HD DVD displays.

The Blu-ray and HD DVD pavilions are neighbors – right across from each other. When I hit them on Tuesday I found the Blu-ray pavilion jam-packed. Just navigating through it was rough because of the people packed in watching all the demos, talking to reps, etc. And when they ran their regular demos, on a sweet 103″ Panasonic flat panel, they were well attended, with pretty much all the seats full and people standing around the edges. It was very lively and the energy level was up, even though it was late in the day and everyone was pretty tired by that point.

Conversely, the HD DVD pavilion felt like a ghost town. It was mostly empty. People just kind of meandered around – wandered in and out. There was nothing exciting to see. Unlike Blu-ray, showing off a slew of upcoming players, demos of upcoming titles, etc, there was nothing new in the HD DVD booth. The players on display were existing units. Frankly, the booth was boring. The energy and excitement level was zero – and it was very noticeable with the noise of the BD booth clearly audible from across the way.

To rub salt in the wound, just by coincidence (I asked) the demo area of the BD booth, with that 103″ screen, pointed right at the HD DVD booth. So the entire show all the demos BD is running on a regular basis are blasting the HD DVD booth. Ouch.

New Line has not only announced that they’re going Blu-ray exclusive, but it is effective immediately. All of their announced future HD DVD releases have been canceled. And their sole existing HD DVD release, Pan’s Labyrinth, will cease manufacturing and once existing stocks are depleted it will no longer be available. Via High-Def Digest.

Digital Playground, an adult film studio which only recently went neutral from being HD DVD exclusive has decided to fully back Blu-ray along with HD DVD on all of their high-def releases“until there is a clear-cut winner” according to a statement made before Warner’s announcement. One has to wonder if, in light of the announcement, they might consider Blu-ray a ‘clear-cut winner’ at this point. CE Pro via EngadgetHD.

And the Times Online out of the UK is reporting that as many as 20 of the studios that are part of the HD DVD Promotion group are looking to have their names removed from the roll.

Pony Canyon, a major Japanese music, animation and film studio and part of the giant Fuji Television media empire, said that although it was currently part of the HD-DVD Promotion Group, the decisions of US studios meant it would “choose Blu-Ray in the end”.

Several other Japanese firms – including content producers and electronics component makers – said that their support of HD DVD was “under review” and that they knew of many others in the same position. Others, who admitted that they had previously been waiting for “clear market momentum”, said that it had now probably arrived.

I think we’ll be seeing more HD DVD studios going neutral, as well as out-right defections by both HD DVD and neutral studios to the Blu camp now, especially if Paramount returns to being neutral – definitely if they go fully Blu. At this point any party who really wants to end the war should throw their weight behind Blu-ray. If studios, retailers, rental chains, etc, shunned HD DVD it would be hastened to its end. Times Online via AnimeOnDVD.

While this is happening, Microsoft seems to be hedging their bets with respect to the Xbox 360. They seem to be softening a bit toward the idea of the Xbox 360 supporting Blu-ray via an add-on drive:

“It should be consumer choice; and if that’s the way they vote, that’s something we’ll have to consider,” Albert Penello, group marketing manager for Xbox hardware, said when asked whether Microsoft would support a Blu-ray DVD accessory in the event that HD DVD failed.

I think they’re setting the stage to hedge their bets in case HD DVD does fail, as is looking likely. They can soften their stance, and then they won’t look as bad if they start supporting Blu-ray. From CNET News.com.

But then, the Financial Times, a very respected source, has something different to say:

Paramount is poised to drop its support of HD-DVD following Warner Brothers’ recent backing of Sony’s Blu-ray technology, in a move that could sound the death knell of HD-DVD and bring the home entertainment format war to a definitive end.

They claim that Paramount has an escape clause in their HD DVD exclusivity contract which would allow them to resume releasing Blu-ray Discs should Warner go Blu-ray exclusive – which, of course, they have. Even if Paramount were to only return to neutrality, and not dump HD DVD completely, it would be another hard blow to HD DVD as it would leave Universal the only HD DVD exclusive studio.

And that’s if Universal remains in the HD DVD camp – they’ve declined to comment on their future plans since the Warner announcement, not even to confirm a commitment to HD DVD.

FT news picked up from EngadgetHD.

That’s unsurprising, but it is nice to have it confirmed. Now they can get to work on the super-deluxe Lord of the Rings Blu-ray collection, right?

Via EngadgetHD.

Notice of CES Press Conference Cancellation by North American HD DVD Promotion Group

Based on the timing of the Warner Home Video announcement today, we have decided to postpone our CES 2008 press conference scheduled for Sunday, January 6th at 8:30 p.m. in the Wynn Hotel. We apologize for any inconvenience this may cause.

We are currently discussing the potential impact of this announcement with the other HD DVD partner companies and evaluating next steps. We believe the consumer continues to benefit from HD DVD’s commitment to quality and affordability – a bar that is critical for the mainstream success of any format.

We’ll continue to keep you updated on new developments around HD DVD.

I have to think the timing of the Warner announcement is no coincidence. I’d bet the Blu-ray camp worked with them for maximum impact, increasing the damage to the HD DVD camp by making it a spoiler for all their PR efforts at CES. No matter what the HD DVD camp says or does this week, it will be overshadowed by this announcement. This is really no way they can put a positive spin on this. It is unsurprising that they’ve postponed their press conference, as this issue would dominate and they’d be unable to make any decent promotional ground.

This is not going to be a good CES for HD DVD. I think the BDA should swoop in and pick up the tab for the room and food at the Wynn and throw a wake for HD DVD!

“The packaged media business is a $42 billion dollar business worldwide at the retail level, and we [Warner] have the largest market share of anybody,” said Tsujihara. “From our perspective, the most important piece of this whole puzzle is, “How do we get growth back into this category?” That far outweighed anything else.”

This [decision] was one hundred percent around what makes the most sense for the consumer, the retailer and the industry. This was not a bidding war. This was all about what was best, strategically, for us.”

Personally, even if there was a payoff, I don’t have a problem with it. That’s business. I don’t blame the HD DVD camp for buying loyalty either. That’s also business. It happens all the time, very few alliances happen in the business world without some financial compensation being involved.

In related news, Warner says their announcement does not cover New Line, HBO, or BBC titles, and that those studios will make their own decisions, likely soon.

Jan 4, 2008 20:30 ET

HD DVD Promotional Group Statement on Warner Home Video Decision to Back Blu-ray

LOS ANGELES, Jan. 4 /PRNewswire/ — The companies of the HD DVD Promotional Group today issued a statement in response to the decision by Warner Home Video to exclusively back the Blu-ray format:

“While Warner’s decision is a setback for HD DVD, the consumer has benefited from HD DVD’s commitment to quality and affordability — a bar that is critical for the mainstream success of any format. We believe widespread adoption of a next generation format will ultimately be determined by the consumer.”

About HD DVD

HD DVD is the next generation, post-DVD standard for high capacity, high definition optical discs, approved by the DVD Forum, which develops and defines DVD formats. The North American HD DVD Promotional Group, Inc. is an organization established to promote the HD DVD format and educate consumers in North America. For more information and a complete listing of HD DVD titles please visit http://www.thelookandsoundofperfect.com/.

Source: HD DVD Promotional Group

CONTACT: Lauren Mayer, lmayer@webershandwick.com, or John O’Brien,
jobrien@webershandwick.com, both of Weber Shandwick,
+1-425-452-5400, for HD DVD Promotional Group

Web site: http://www.thelookandsoundofperfect.com/

Talk about weak. OK, they admit it is a setback for HD DVD – kind of hard not to. A vague statement about the consumer benefiting from HD DVD’s “commitment to quality and affordability” – translation “We helped drive HD prices down”, fair enough. But closing with adoption being determined by the consumer? In light of Warner’s shift in the market, and BD’s sustained sales lead, that almost sounds like an admission that this could be the death blow to HD DVD. This is the HD DVD Promotional Group, and even they don’t have any fighting words about ‘answering the challenge’ or touting their favorite ‘more standalone player sales’ or the like?

It really seems like the HD DVD camp is seriously stunned and shaken by this, and doesn’t really know what to say or do in response. I don’t think they have any strong cards left to play.

ETA: You know, it is kind of odd the Blu-ray Disc Association hasn’t issued their own press release yet to tout this and gloat.

My summary: “Oh shit. Oh shit. Oh shit. Damn that hurts. How are we going to salvage this? Stall for time.”

It actually sounds a bit peevish in the first paragraph, almost “How dare you do this?! I thought we were friends!” kind of tone. And a hint of veiled threat with the mention of contracts between the companies for HD DVD support. And then a reference to the ‘significant momentum’ HD DVD gained in 2007 – sure, which still significantly lags behind the even greater gains by BD.

I think Toshiba is really shaken by this, no matter what they end up with as their final stance. It will be hard not to gloat in person at their booth at CES. For the past several years I’ve had their booth reps pitch HD DVD to me and I kept telling them I wasn’t interested and that BD was going to win anyway.

EDIT: And now the HD DVD Promotional Group has chimed in too.

The full press release:

Jan 4, 2008 18:04 ET

Toshiba’s Comment on Announcement from Warner Bros. Entertainment of Its Exclusive Support for Blu-ray Disc Format

TOKYO, Jan. 4 /PRNewswire/ — Toshiba is quite surprised by Warner Bros.’ decision to abandon HD DVD in favor of Blu-ray, despite the fact that there are various contracts in place between our companies concerning the support of HD DVD. As central members of the DVD Forum, we have long maintained a close partnership with Warner Bros. We worked closely together to help standardize the first-generation DVD format as well as to define and shape HD DVD as its next-generation successor.

We were particularly disappointed that this decision was made in spite of the significant momentum HD DVD has gained in the US market as well as other regions in 2007. HD DVD players and PCs have outsold Blu-ray in the US market in 2007.

We will assess the potential impact of this announcement with the other HD DVD partner companies and evaluate potential next steps. We remain firm in our belief that HD DVD is the format best suited to the wants and needs of the consumer.

   Press Contact
   Corporate Communications Office
   Keisuke Ohmori
   +81-3-3457-2105
   http://www.toshiba.co.jp/contact/media.htm

Source: Toshiba

CONTACT: Keisuke Ohmori, Corporate Communications Office of Toshiba,
+81-3-3457-2105

Web site: http://www.toshiba.co.jp/

Warner is the last studio to be format neutral, after Paramount and DreamWorks Animation dropped Blu-ray for an 18-month exclusivity deal with HD DVD, for which they reportedly received $150-$180 million. But they’re small-fry compared to Warner. The two camps have been in a tug of war. Sony, Disney, Fox, and MGM, the major players in the Blu-ray camp, jointly account for roughly 50% of the home video market. Universal, Paramount, and DreamWorks Animation, the major players in the HD DVD camp, jointly account for roughly 30% of the home video market. Warner alone accounts for roughly 20%. By going Blu-ray exclusive, they shift the balance 70/30 in favor of Blu-ray, which is a substantial advantage. And, remember, the Paramount & DreamWorks exclusivity is reportedly for 18 months, which means it would expire in early 2009. With the market that skewed, and with past experience releasing Blu-ray, I’d expect them to go back to being neutral, if not switching camps entirely. And that’s if they don’t have an escape clause in the exclusivity contract – like “If Warner goes BD exclusive, the deal is off.”

In any case, this could be what it takes to tip the scales and end the format war. Even before this, Blu-ray has been outselling HD DVD 2:1 in the US – and by wider margins elsewhere. But nearly 35% of HD DVD titles are from Warner, and some of them are best sellers, such as 300 and the Harry Potter films. Losing Warner is going to hurt HD DVD disproportionately, while 35% of the titles may be Warner, I’d bet more than 35% of sales are from Warner. This alone could push the ratio in the US to 3:1, or better, for BD titles. And this is on top of far stronger industry support for BD and a growing number of players, combined with falling prices. And there is currently a rumor than Apple will be announcing Blu-ray drives as options in their systems at MacWorld.

EDIT: Both Toshiba and the HD DVD Promotional Group have issued replies.

Warner’s press release was posted by Deadline Hollywood Daily:

WARNER BROS. ENTERTAINMENT TO RELEASE ITS HIGH-DEFINITION DVD TITLES EXCLUSIVELY IN THE BLU-RAY DISC FORMAT BEGINNING LATER THIS YEAR Decision Made in Response to Strong Consumer Preference for Format

(January 4, 2008 – Burbank, CA) – In response to consumer demand, Warner Bros. Entertainment will release its high-definition DVD titles exclusively in the Blu-ray disc format beginning later this year, it was announced today by Barry Meyer, Chairman & CEO, Warner Bros. and Kevin Tsujihara, President, Warner Bros. Home Entertainment Group.

“Warner Bros.’ move to exclusively release in the Blu-ray disc format is a strategic decision focused on the long term and the most direct way to give consumers what they want,” said Meyer. “The window of opportunity for high-definition DVD could be missed if format confusion continues to linger. We believe that exclusively distributing in Blu-ray will further the potential for mass market success and ultimately benefit retailers, producers, and most importantly, consumers.”

Warner Home Video will continue to release its titles in standard DVD format and Blu-ray. After a short window following their standard DVD and Blu-ray releases, all new titles will continue to be released in HD DVD until the end of May 2008.

“Warner Bros. has produced in both high-definition formats in an effort to provide consumer choice, foster mainstream adoption and drive down hardware prices,” said Jeff Bewkes, President and Chief Executive Officer, Time Warner Inc., the parent company of Warner Bros. Entertainment. “Today’s decision by Warner Bros. to distribute in a single format comes at the right time and is the best decision both for consumers and Time Warner.”

“A two-format landscape has led to consumer confusion and indifference toward high definition, which has kept the technology from reaching mass adoption and becoming the important revenue stream that it can be for the industry,” said Tsujihara. “Consumers have clearly chosen Blu-ray, and we believe that recognizing this preference is the right step in making this great home entertainment experience accessible to the widest possible audience. Warner Bros. has worked very closely with the Toshiba Corporation in promoting high definition media and we have enormous respect for their efforts. We look forward to working with them on other projects in the future.”

“Dear Mr. Lindich, We have made no decision to change our present policy which is to produce in both HD DVD and Blu-ray.”

I’ve seen enough corporate-speak to recognize a non-committal statement when I see one. It isn’t a denial or a confirmation. The wording is interesting – “no decision to change our present policy”. Parsed one way it could be that they don’t plan to change the policy at this time, but may be planning to change it in the future. Or it can be read as there being no plans to change at all. But in that case, why not come right out and say that clearly?

I would not expect Warner to confirm any plans for exclusivity. If they do plan to make an announcement at CES, they wouldn’t want to spoil it by pre-announcing. Especially with holiday shopping still underway, they don’t want to hurt their sales. If they even implied that they were dropping either format it could tank the sales of that format during the biggest shopping season of the year.

So there is still the chance that CES could hold some interesting news.

Via EngadgetHD.

“The rumor is that Warner is coming aboard soon,” says Michael Burns, vice-chairman of studio Lionsgate (LGF), which makes its movies available on the Sony-backed format. “That will make it awfully tough for HD DVD to stay in this game.”

There have been some signs. Warner, which has always been on the fence, abandoned their proposed TotalHD dual-format disc last month. Warner has also joined groups that promote Blu-ray Disc. Back in September Warner stated that they’d be watching sales in 4Q07 closely and then evaluate their dual-format position based on that information.

In October, speaking to Home Media Magazine, Warner’s Dan Silverberg indicated their dual-format strategy could be changing.

Also there was Dan Silverberg, VP of high-definition media for Warner Home Video, which since Paramount’s move to the HD DVD camp is the only studio to support both next-generation formats.

That may not be for long, Silverberg said. “One thing that may be changing is our strategy,” he said. “When both formats launched and hardware prices were high, we made a decision to support both formats and let the consumer decide. But now that hardware pricing is affordable for both Blu-ray and HD DVD, it appears consumers no longer want to decide — so the notion of staying in two formats for the duration is something we are re-evaluating now that we are in the fourth quarter.”

Silverberg noted that Warner has the top-selling Blu-ray title of all time with 300 and is consistently No. 1 or No. 2 in both Blu-ray sales market share and in number of Blu-ray titles in the market.

“We can definitely talk Blu-ray,” he said. “We are committed to the format.”

As I said at the time, if staying with both formats is something that might be changing, and they’re committed to Blu-ray, then the answer seems fairly clear – they’re considering dropping HD DVD.

Why would Warner want to do this? Because they’ve never liked supporting two formats, they really want to see a single format win the war. Why? Because two formats divides and confuses the market, and slows down adoption. If a single format ruled, it would allow for a focused marketing effort, and it would eliminate consumer confusion. And in the end all Warner wants is to sell more discs, and they take a long view. They might lose some sales in the short term, but if one format wins the war then adoption should pick up more rapidly, leading to increased disc sales sooner.

So why Blu-ray and not HD DVD? BD has outsold HD DVD roughly 2:1 in the US, 3:1 in Europe, 5:1 in Australia, and 9:1 in Japan. HD DVD hasn’t been able to beat Blu-ray in any market, except for times when it launched before BD and had the market to itself. But then BD always caught up, and outpaced, HD DVD once it launched. So the consumer momentum is already behind Blu-ray.

And you have to consider their goal – to push one side or the other into a clear lead to win the war, to unify the market. Warner is the big dog. They account for 24.54% of BD titles, second only to Sony’s 24.80%. And 34.02% of HD DVD titles, second only to Universal’s 39.30%. In the overall market, if Warner were to pull out of HD DVD and release only on Blu-ray, that would give BD over 70% of the titles in the market. Conversely, if Warner were to pull out of BD and release only on HD DVD, that would give HD DVD only roughly 50% of the titles in the market. Sony, Fox, and Disney, all Blu-ray exclusive studios, collectively release nearly half the titles on the market. Universal is the big anchor for HD DVD. While Paramount switched from dual-format to HD DVD this year, their output is fairly small. So if Warner wants to help end the war, backing Blu-ray would decisively tip the balance in the market – and it would likely push Paramount into re-joining the BD camp once their 18 months of exclusivity is up (if not sooner). That would leave Universal the sole major HD DVD backer, and they’d be unlikely to try to fight the war alone. But backing HD DVD would simply split the market almost evenly, and would likely serve to increase confusion and prolong the war.

And Warner need only look at their own sales figures. The titles they release on both formats routinely sell 2:1 or better in favor of Blu-ray. So the short term hit of dropping HD DVD is less than the hit from dropping Blu-ray. If they’re going to pick a side, going with Blu-ray is better for Warner Bros. in both the short term and the long term – less of a short term hit to sales, and a better chance at ending the war and increasing adoption.

If they were really waiting to see how sales went in 4Q07, so far BD has handily kept its lead – even the release of Transformers couldn’t give HD DVD the edge that week. If Warner was looking for some big move by HD DVD to turn the tide, it hasn’t happened yet.

Sure, Warner could shock everyone and side with HD DVD. Toshiba could shovel money at them, like they did Paramount and DreamWorks, to buy the deal. But it is likely that the Blu-ray camp would not go down without a fight, and they’d be willing to buy Warner’s allegiance as well. Toshiba has already dipped into their war chest for the Paramount/DreamWorks deal, while the BDA has more members with deep pockets.

Either way, it is certainly interesting to watch. And if they do make an announcement at CES, it will be a huge news.