Thursday, August 23, 2007

DVD Forum anniversary party rudely disturbed

This month the DVD Forum celebrates its 10th anniversary. And the members of this international organization that defines formats for DVD products and technologies, took care of the fire crackers: Paramount will exclusively use the HD-DVD format for releasing its movies for one year.

The Forum is a collaboration between the consumer electronics, IT and entertainment industries and was founded in August 1997. It assumed and extended the work of the DVD Consortium, the ten-company organization that initially developed the DVD format. When it started its work in developing the DVD format and promoting its widespread dissemination, the DVD Forum counted 86 members. Today, it has about 220 member companies, drawn from all over the world.

The launch of DVD was one of the most successful consumer product launches in history. An immediate hit with consumers around the world, DVD brought new and exciting capabilities to home entertainment, computing and gaming, and created an immense global market: 2006 demand for DVD players and recorders stood at over 110 million units, and reached about 290 million units for DVD drives. In the same year, 1.7 billion DVD movie discs were shipped in the North America, while shipments of recordable discs climbed to 5.1 billion discs globally.

In an anniversary message, it reads: This extraordinary success rests on the concerted efforts and long-term support of the DVD Forum. The Forum assured the versatility and wide-ranging applicability of DVD by defining key specifications that met diverse needs, including those for DVD-ROM, DVD-Video, DVD-R, DVD-RAM, DVD-Audio, DVD-RW, and DVD-Video Recording(5). The Forum continues to define the future for DVD, and is now promoting development of HD DVD, the next generation DVD format -- based on blue laser -- and working on the development of an integrated networking environment -- extending DVD formats to adapt to the expanding online world.

But the anniversary party has been rudely disturbed by the fire crackers of Paramount movie studios and its subsidiary Dreamworks. Paramount has chosen to release movies in the HD-DVD format only for one year. The company hopes to force a format dominance on the market. Paramount follows the lead of Universal Pictures which had exclusively chosen for HD-DVD as its only release format. According to The Wall Street Journal, Paramount will get money and promotion assistance for one year in lieu for the format exclusivity. (from what company will it get money? Microsoft?).

This fight has always been immanent since the two DVD format parties of HD-DVD and Blu-Ray could not agree. They nicely went ahead, but both knew that the fight was going to be on the commercial battlefield: the consumer will decide. Dreamworks indicated that it chose for the HD-DVD format not for the financial support the studios get for it, but because the HD-DVD player costs less than 300 dollar. The cheapest Blu-Ray player costs 449 dollars.

Is that argument valid? I do not think so. Mr Katzenberg of Dreamworks should know his classics and remember that the video tape fight in 1980 was won by the company which had the most content, regardless the genre. Can Universal and Paramount offer the consumer so much content in only HD-DVD format, that Blu-Ray will wither? Forget it. For the DVD is not only a movie format, but also a game format. Sony uses Blu-Ray for its Playstation and Microsoft’s Xbox plays HD-DVD.

The battle field is larger than the movie industry and Universal Pictures and Paramount will not o dictate the format. The HD-DVD camp with Masushita, Microsoft, Universal and Paramount will battle the Blu-Ray camp of Philips/Sony, Walt Disney and News Corp. Which company will have the largest offer of entertainment products; that is the question.

Paramount will review its stance after a year. By then the company will find itself in isolation and will have lost a lot of money by not selling its movies to the Blu-Ray community or it will have gained a dominance in the movie world, but not in the gaming world, which has other buying rules. In both cases the consumer will loose.

Blog Posting Number: 846


No comments: