There are many here discussing how HD DVD can survive the Warner announcement. The will to fight that all these threads assume may not exist, though. Ron Sanders, president at WHV explains why.

"Not only did neither [high-def DVD] format really take off as expected in fourth quarter, but standard-def was softer than expected given the release slate," Sanders said Friday, shortly after the studio announced that it will drop is support of the HD DVD format and release its high-def titles exclusively on Blu-ray starting in June. "We’re seeing research now that shows that consumers are starting to delay purchases because of the format war, not just on high-def but standard-def purchases as well. That’s very alarming.”


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There's more pressure than some here realize to make HDM work in the marketplace, to protect the physical media revenue stream for next year's holiday season.

I think he meant to say that more SD DVD buyers are now renting via Netflix, Blockbuster etc.

You can't blame the format war for people not buying standard DVD's...please.

Well, it actually makes some sense. If you're wanting to get into HDM, but you insist on one format only, it would make sense not to purchase titles on DVD that you'll want to replace with HD versions soon (especially if said HD versions are already available).

While I didn't exactly do this, I did pass on the 2-disc versions of titles for the most part in the year or two leading up to the introduction of HDM.

Well, it actually makes some sense. If you're wanting to get into HDM, but you insist on one format only, it would make sense not to purchase titles on DVD that you'll want to replace with HD versions soon (especially if said HD versions are already available).

While I didn't exactly do this, I did pass on the 2-disc versions of titles for the most part in the year or two leading up to the introduction of HDM.

Nobody is denying that the damage is great, but I can't say oh he's 100% because they know why they did it. Of course that he's hoping that there won't be a fight. Because if the fight continues, they have made a mistake.
Everybody wants to feel they are a savior of something and defend themselves how it's the right thing to do. They screwed over a lot of people with a completely illogical move. Every study has shown that after holiday's $99 was hot seller and would saturate the market lightning fast and that mainstream consumers actually preferred HD DVD.

I guess they were waved at with something that made them go blind on these things.

Unfortunate.

I'd guess movie sales are down due to many factors. The HDM wars may have a little to due with it. But id say its just a lot of things gas, high home prices. Prerhapps the movie hobby is just down at the momment. Folks are finding other things to do. Read harry potter books, watch TV.

The idea of so many people flocking to Netflix makes it seem like movie downloads is just that much closer. Xbox Live movie downloads is also getting more popular.. There will always be a place for physical media.. but perhaps DVD sales are dropping off because more people are branching out to services like Xbox Live and Netflix... It's also been noted that video games have become a direct competitor of movies and TV. :)

I'd guess movie sales are down due to many factors. The HDM wars may have a little to due with it. But id say its just a lot of things gas, high home prices. Prerhapps the movie hobby is just down at the momment. Folks are finding other things to do. Read harry potter books, watch TV.
It doesn't really matter why sales were down. They were down and the stockholders for these companies know that. The people who manage these firms have no choice but to start taking desperate measures if they want to keep their jobs. Supporting an industry move to a single format is a very logical move.

This is hogwash. The end of year figures came out at CES and SD DVD was down 2% from last year. Thats no drop, especially considering all the doomsayers calling for a 10% dropoff. Considering how satellite, downloads, Netflix, etc are all improving substantially I thought SD did alarmingly well. This total was surprisingly high and it was expectd that DVD did VERY well in the 4th qtr.

This is hogwash. The end of year figures came out at CES and SD DVD was down 2% from last year. Thats no drop, especially considering all the doomsayers calling for a 10% dropoff. Considering how satellite, downloads, Netflix, etc are all improving substantially I thought SD did alarmingly well. This total was surprisingly high and it was expectd that DVD did VERY well in the 4th qtr.
I wished my middle school daughter didn't already go to sleep. I would like to verify with her, but I'm pretty sure that it is considered a drop when your revenue goes down 2%. Stockholders who invest in companies kinda like it when revenue goes up. Has something to do with stock prices if I recall correctly. I can't remember all the details though.

There will be one format cause all the studios will be releasing on one format instead of two. That is way for a quick fix to the war.

HD-DVD, the only format....for beer coasters...domestic and imports...WORLDWIDE COASTERS FTW !!!!....DOMINATION !!!!!

I stopped buying DVDs a year or more ago because of HDM. I rent DVDs.

I stopped buying DVDs a year or more ago because of HDM. I rent DVDs.

Same here...

^^And others will too...

Well, it actually makes some sense. If you're wanting to get into HDM, but you insist on one format only, it would make sense not to purchase titles on DVD that you'll want to replace with HD versions soon (especially if said HD versions are already available).
Exactly. I couldnt buy transformers cause I only have a BD player, but theres no way Id buy the SD-DVD knowing theres an HD version.

He's making the classic mistake of blaming the format war causing a demise in his main revenue stream. They came to the correct conclusion that HDM was stalling.

That demise is caused by others factors. Namely high price tags for new SD DVD releases next to higher gaz bills and consumers spending their 'entertainment budget' across a wider range of options. iPhone is the next gadget giving an opportunity for a VOD revenue stream. Lo res of coarse but the money spent on it isn't going to HDM anymore.

The stalling is caused by the high price tags mostly. Not the format war. Modern consumers are already accustomed to a multi format reality with music and games.
With br customers are doomed to a multi format reality anyway since there is still need for DVD outside the livingroom.

Warner siding with the br format was to end the format war in the quickest way they could think off.

I fear they picked the wrong format.

What did you guys expect Warner's executives to say?? How did you expect them to justify their move?? Their PR is the most obvious thing anyone could have expected.

I too believe that the war hurt SD sales, I put the brakes on my SD movie purchases and I am rethinking HD DVD purchases for 08. Movies are not like video games, there has to be only 1 format. Just wish it was hd dvd, but I don't want to see this drag on forever either.

I quit buying DVDs about 8 months ago.

There's some serious doublespeak going on in there, but the idea that the format war is responsible for DVD sales slowing down is ludicrous.

While early adopters of Blu ray and HD DVD may have stopped buying SD DVDs, the rest of the mass market hasn't. Millions have still sold weekly especially with New Releases. So they are selling. Sales growth has probably minimized because we've finally reached a point where everyone with the means to buy a DVD player has 5 or 6 of them and have most of the catalog titles they want leaving them content to buy just new releases when they feel like it.

But let it be said, that kind of slowed or fickle growth with a market as large as SD DVD is isn't really bad for the consumer, it's bad for the studios who's profit margins shrink as a result and are left to find incentives, ie. lower DVD MSRP prices to continue to move titles at previous levels. Lowering MSRP would have an effect on profit margins as well, so that's pretty much a non starter with the studios. They need a new horse, essentially.

In business speak, what Sanders is really saying here is they're ready to move away from DVD to maintain profitability and made a desperate move in an attempt to make HD discs that horse as soon as possible. Fitting with this kind of desperate reasoning, they based their decision on who has higher sales numbers instead of who has higher sales growth. That's relevant for another important statement in between the lines here.

Despite the satisfaction with Blu-ray's fourth quarter over HD DVDs as stated in their press release for the switch, Sanders says here that Warner feels that neither of the two performed as expected.

I read that as meaning that Warner's switch is pretty much their last salvo in trying to get some mass market traction on HD discs. If things remain slow, they could step away from HD disc altogether.

There's some serious doublespeak going on in there, but the idea that the format war is responsible for DVD sales slowing down is ludicrous.

While early adopters of Blu ray and HD DVD may have stopped buying SD DVDs, the rest of the mass market hasn't.(snip)

Except that some of the people waiting for a winning format *have* stopped buying DVDs. Anecdotally, one of my buddies who I always forward major news in HDM to mentioned he's not bought a DVD in about six months. This from a guy who owns thousands. If the kind of people who need more than one shelf for their DVDs are waiting for a winner... That's going to hurt. And i doesn't have to be all that many, if the studios do some focus grouping and start to see that even a 1% drop is attributable to people waiting for HDM, it'll have their attention.

Except that some of the people waiting for a winning format *have* stopped buying DVDs. Anecdotally, one of my buddies who I always forward major news in HDM to mentioned he's not bought a DVD in about six months. This from a guy who owns thousands. If the kind of people who need more than one shelf for their DVDs are waiting for a winner... That's going to hurt. And i doesn't have to be all that many, if the studios do some focus grouping and start to see that even a 1% drop is attributable to people waiting for HDM, it'll have their attention.

If he has thousands of DVDs he likely has all the catalog titles he wants and maybe there hasn't been a new release he's been interested in in six months. Or maybe he prefers going in on a mass $4.99 a disc sale and buying 10 at a time. It happens. Or maybe you're right and he really has been waiting for an end to the war.

My point is with DVDs still selling millions on their first week of release and continuing to sell after, there is proof that the majority of consumers aren't holding out on DVDs because of the format war. The studios, Warner in this case is IMO wrongly assuming that the format war is causing DVD sales to plateau instead of demand having largely been met.

If HDM still continues a slow pace despite a single format, there are no excuses left. The studios would likely assume that the public on the large doesn't want HD on disc.

I don't want that of course, and that's why I feel that getting good, finished players out at entry pricing of $200-250 needs to be a priority for the BDA if HD discs have any shot at a future.

There's some serious doublespeak going on in there, but the idea that the format war is responsible for DVD sales slowing down is ludicrous.

While early adopters of Blu ray and HD DVD may have stopped buying SD DVDs, the rest of the mass market hasn't. Millions have still sold weekly especially with New Releases. So they are selling. Sales growth has probably minimized because we've finally reached a point where everyone with the means to buy a DVD player has 5 or 6 of them and have most of the catalog titles they want leaving them content to buy just new releases when they feel like it.

But let it be said, that kind of slowed or fickle growth with a market as large as SD DVD is isn't really bad for the consumer, it's bad for the studios who's profit margins shrink as a result and are left to find incentives, ie. lower DVD MSRP prices to continue to move titles at previous levels. Lowering MSRP would have an effect on profit margins as well, so that's pretty much a non starter with the studios. They need a new horse, essentially.

In business speak, what Sanders is really saying here is they're ready to move away from DVD to maintain profitability and made a desperate move in an attempt to make HD discs that horse as soon as possible. Fitting with this kind of desperate reasoning, they based their decision on who has higher sales numbers instead of who has higher sales growth. That's relevant for another important statement in between the lines here.

Despite the satisfaction with Blu-ray's fourth quarter over HD DVDs as stated in their press release for the switch, Sanders says here that Warner feels that neither of the two performed as expected.

I read that as meaning that Warner's switch is pretty much their last salvo in trying to get some mass market traction on HD discs. If things remain slow, they could step away from HD disc altogether.

If you are not in the business analyzing trade you picked the wrong job.

Most "normal" people I talk to (not a/v geeks like us) are indeed waiting for the format war to be over before buying anything. I hear that all the time from people I talk to (if I had a dollar for everytime I heard "I'm not gonna get burned like I did with BETA!" ...). So that report and Warner's stance make sense to me. Its just a format.

The other factor is that the picture quality from SD-DVD to HD-DVD / blu-ray is not a quantum leap under the conditions that most "normal" people watch movies, which is way too far away from a poorly calibrated TV (that probably isn't using the proper cabling or basic settings to boot) to really notice the difference. A really good SD-DVD from a decent player, shown on a decent TV looks very good to most people from great distances. I can't count how many times I've recenly heard "wow, my standard DVDs look great on my new LCD / plasma TV - HD quality!". And SD-DVDs are a fraction of the cost in most cases.

I personaly love HD, and get off on seeing extreme detail. I routinely bug my wife with comments like "do you see the stubble on Jim Lovell's face!". She's typiczally not impressed. Most normal people just don't care about hi def enough to sweat things like a format war. The sales figures and netflix rental figures back that claim. Netflix reported recently that 99.5% of all rentals were SD-DVD.

What Netflix should do is tell the percentage of HD discs that are in people's queues. They can't meet the demand for HD, so the HD percentage would be higher I bet if they could meet the demand.