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CES 2008: Blu-ray Bombshell

January 7, 2008 | Author: Ibex Marketing

I was planning to write about the three big themes emerging about large displays here at CES 2008 in Las Vegas, but an announcement last Friday from Warner Brothers is the elephant in the room that has to be addressed first. The studio was the only major to offer high definition movies in both HD DVD and Blu-ray in the United States. Most of the other studios are committed to just Blu-ray (and it doesn’t hurt that Sony owns a studio of its own), and a couple are backing just HD DVD.

So the bombshell is that Warner Brothers has announced that as of May, they will only release their high definition titles in Blu-ray format. The company press release cited that the decision was “in response to consumer demand,” which is a bit curious. The numbers are not all in yet, but HD DVD player sales were apparently very strong in the last quarter of 2007, which is to be expected since they cost considerably less than comparable Blu-ray models. Many people suspect that the decision was possibly influenced by some sort of incentive from the Sony Blu-ray camp.

Whatever the cause, the timing of the announcement could not have had more impact. CES is buzzing with the news, with many in the press declaring this to be the mortal blow for HD DVD. Without Warner’s support, it certainly will be difficult for HD DVD to continue to make headway against Blu-ray. And the fact that you can get most movies in either format through European distributors is not likely to make much difference; if it’s not on the shelf at the local Best Buy, it doesn’t exist for most U.S. consumers.

I’m not ready to throw dirt on HD DVD’s coffin yet, but I admit the future looks grim. I want to wait for the dust to settle and see what response — if any — the HD DVD camp can muster to this develoment. The folks at Toshiba deserve great credit for leading their Sunday morning CES press conference with the Warner Brother news, and addressing it head on. Clearly, they were surprised and shocked by the change, but for now, they are still talking a brave game and intend to continue to push forward. As I talk with the various companies involved in high definition DVD players here at CES 2008, I hope to get a broader picture that will help us understand if this indeed seals the victory for Blu-ray. Stay tuned.