Format Wars: Fox Bullish On DVD and Blu-ray

July 28, 2006

Format WarsFox Home Entertainment’s Worldwide President, Mike Dunn recently spoke with Home Media Retailing on a variety of entertainment mediums but of course his comments on Blu-ray were what I found most interesting.

The in-depth interview by HMR’s Erik Gruenwedel starts out with questions on the maturing DVD industry, Fox’s 2006 theatrical releases, digital downloads and ultimately moves onto Fox’s expectations with Blu-ray.

HMR poses the question: How does Blu-ray fit in a download world? Without a unified format, is there a possibility Blu-ray Disc and HD DVD could become the next UMD?

Mr. Dunn replies with:

“First of all, the format war is really only going on in the press. Come the late fourth quarter, starting in November, Blu-ray is going to be showing huge numbers. The early adopter is going Blu-ray”

Really, that’s interesting because if we were to take a look at the sales data from one of the worlds largest on-line retailers, it would seem as if the “early adopter” is choosing HD DVD over Blu-ray by a significant margin.

While Amazon’s sales-rank data fluctuates on a daily basis, you can check in on any given day and see that the Toshiba HD-A1 is ahead of Samsung’s BD-P1000 Blu-Ray Player by 4000 to 5000 points.

For those unfamiliar with how Amazon scores sales-rank, this is how they describe their ranking system:

“The lower the number, the higher the sales for that particular item. The calculation is based on Amazon.com sales and is updated each hour to reflect recent and historical sales of every item sold on Amazon.com.”

Mr. Dunn goes on to say:

“The penetration of Blu-ray is going to be in the millions of households by early 2007, compared to less than 100,000 households for HD DVD. And, it will penetrate faster than DVD did — going from zero to 10 million households like a rocket. Once the delta between the two formats begins to widen like that early on, it becomes a Blu-ray no-brainer for the consumer.”

Mr. Dunn is apparently privy to how many HD DVD players will be sold by early 2007, or could it be that he’s just using a little suggestive persuasion. I wonder, could his modest prediction of 100k players be as inaccurate as “The early adopter is going Blu-ray” comment?

On the absolute odd-ball chance that any executive from Universal Studios happens to read this, if you grant an interview about HD DVD please don’t make any ridiculous claims as to what the consumer will do. We hate it when executives assume (for us) that “10 million households” will buy into either of these formats “like a rocket”.

Mr. Dunn indicates that the format war “is really only going on in the press” but it seems as if in his mind at least, the war has already been fought and won.



Posted by B.Greenway | | Filed Under Blu-ray & HD-DVD


Comments

  • Josh
    Thanks for replying. Yes, I believe the whole Blu-ray camp is betting on the PS3. From what I have heard and read, HD-DVD has a better picture and the players are less expensive. That sounds to me like a slam dunk. However, when the players get more comparable in price, perceptions can change.

    Will the general public buy a PS3 for a little bit more than an HD-DVD player that has inferior PQ, but they have the added bonus of playing games? Will HD-DVD players prices be discounted even more this holiday season to counter the PS3? This will be interesting.
  • B.Greenway
    Josh that’s a fascinating concept, because less than 4 months ago I was inundated with “Blu-ray will bury HD DVD” and “Blu-ray has more capacity and studio support” comments, over and over we had comments to the effect that Blu-ray was somehow “better” than HD DVD.

    Now it comes down to the PS3? I’m not knocking your idea; not at all I’m just interested in how quickly perceptions change, and I say perceptions because you’re not the only one saying this.

    So the whole battle will be based on how well the PS3 does? If that’s truly the case then I’m even more optimistic, no that doesn’t mean that I’m discounting PS3 sales, I just find it interesting that many have already written off stand alone Blu-ray hardware sales.
  • Josh
    Consumers will not be buying into Blu-ray, they will be buying into the PS3. I'm interested to see if the PS3 will have as much of a negative backlash as the Xbox 360 did when it came out. If so, that could spell certain doom for the format.

    Either case, this whole battle will be based on how well the PS3 does and how well Sony markets to not so savvy buyers that it is able to play next gen movies. We'll just have to see if Sony's "all in" bet pays off.
  • B.Greenway
    You buying me a Blu-ray player won’t make me feel like much of a winner, at least not until October (at the earliest). How about a Best Buy gift certificate?

    How about a tipping point of who will have a Universal title in their Blu-ray player before the other side has a Disney or MGM title in their HD DVD player?
  • shakaZOLO
    We should start laying odds and placing bets. How about this.....we set a tipping point. Determine reasonable stats to measure. Then people sign up. Those who lose will have to buy the competing format player for the winners!
  • westcott
    I am with you, Mr. Hoyt. I would love to see a couple of dedicated processors for HD players but I do not think we will see those until one format wins over the other or some other form of truce is formulated. I speculate that few mfgs will risk the investment until then.
  • Brian Hoyt
    As others have mentioned I am sure the millions of households number that is mentioned is due to the PS3. I am willing bet that true CE device sales of Blu-Ray will pale in comparision to HD-DVD sales. However it would help if there were someone else making some HD-DVD players and not just repackaging the same hardware. Give me one with VC-1 and MPEG-4 in hardware and not just a P4 running linux.
  • cgw
    PSP3 won't be the tipping point. Cheap customers will be the tipping point. If gas price still hovers around $3.00 by the shopping season ($2.88 in my area) or in January or February, how many people will just buy PSP3 and forget about saving money for their essential expenses? Even Wal-mart will tremble under high gas prices, how about expensive CE equipment manufacturers? The whole economic trend and consumer confidence about their future will play their roles in this format battle. It is no longer the prosperous days of 80s and 90s (gas price <~$1.00) any more.

    Many people talk about game users, but none I have seen so far give me a social status description and consumer behavior analysis on this group. Without these statistics, any forecasting is nonsense.
  • B.Greenway
    Yeah Shaka still sticking with HD DVD.

    Once I saw Blu-ray I wasn’t left with any other choice.
  • shakaZOLO
    Still sticking with HD-DVD??? PS3 is going to be the tipping point. I've said it before and will keep saying it. Right now there is no clear winner or loser. HD-DVD might be doing better because people are just plain cheap and look at $500 versus $1000. When PS3 hits, the game is over.
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