Paramount has tried this week to initiate a stamped away from Blu-ray films, by announcing that it would no longer support the format. Paramount was one of the last of the studios to support Blu-ray, along with Warner Brothers, although Universal Studios has never come around and has always exclusively stuck with the rival HD DVD format pushed by Toshiba.
Paramount speaks for films that come from DreamWorks Animation SKG, DreamWorks Pictures, Paramount Vantage, Nickelodeon and MTV Films. But at the same time any films made by legendary director Steven Spielberg WILL after all be available in both formats, so the company will still be sort of supporting Blu-ray.
There is a lot of hype around this market. The big consumer electronics companies have never wavered from Blu-ray. It was mostly designed by Sony, and it has the support of Samsung, LG Electronics, Matsushita and Philips, but the two Korean companies have also both tried to make devices that read both formats. That represents around 90% of the consumer electronic manufacturing capability, while Toshiba is on its own in the HD DVD camp, which has only been kept alive by the support of Microsoft and Intel.
However it is simpler technology and at present the devices are cheaper than the Blu-ray devices, although that difference in price has come down from $500 to $200 in moves made during the last few months. And yet still the Sony inspired format sells more films due to the fact that the PS3 has a Blu-ray player bundled into it, so there are more devices out there. New figures this week show that Blu-ray disks are outselling HD DVD by two to one in the US. The difference is much greater in other parts of the world and was reported as high as 5 to one in Japan. This simply means that the Paramount move is actually a bluff at best, or a US only action that will prove unsustainable over time.
Paramount said that the decision to distribute exclusively in the HD DVD format resulted from an extensive evaluation of current market offerings, which confirmed the clear benefits of HD DVD, particularly its market-ready technology and lower manufacturing costs. It is likely that Blu-ray technology pricing will be neck and neck with HD DVD players in the high street by the middle of next year, but also the rate at which PS3s are shipping is accelerating all the time. There is some research that suggests that PS3 purchasers don’t use it much for watching films, but if that were true, then why the difference in disk shipments?
Paramount here is just playing cat and mouse with the Blu-ray camp, perhaps trying to drive down costs for film pressings and consumer equipment. It doesn’t have the power, in the face of continued support from Apple, Dell, Sony, MGM, Disney and Fox to turn the market. Perhaps it thinks if it can get one of these loyal supporters to change their position, it can create an avalanche.
For our money this is now a long slow battle, with very little at stake for film makers, who get under 1% of their revenues from HD films, but everything at stake for the consumer electronics firms involved.