CES and the Format War--Article - AVS Forum
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post #1 of 185 Old 12-31-2006, 11:57 AM - Thread Starter
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Here is my article on CES and the format war:

http://www.tvpredictions.com/rsmith122906.htm


I am writing a follow-up after the show, and would appreciate any comments or input here.

Thanks to everyone and Happy New Year!
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post #2 of 185 Old 12-31-2006, 12:58 PM
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I think it's very much a Pro-BD article. You even claim that things look like a BD win in 2007 for the Format war.

So you disagree with every firm that makes their living judging market trends?

Toshiba pretty much did what they had to do to guarantee there will be no winner.

It's Toshiba's game to screw up right now. They have an excellent understanding of the market.

BDA has already said they will have a $400 player at CES (I saw this on TV, on CNet). So you know that HD-DVD will have to have an answer. I expect the answer in a $349 package, possibly a $299 package from the Chinese.

2007 may well end up being the year of Neutrality.

LG, Disney, Fox, and MGM will all likely go Neutral by years end, or be leaning that way by year's end.

Toshiba has done a good job of securing a piece of the market. I believe Sony having the edge in Studios and CE support will just make their market share grow. However it won't kill Toshiba's share. Currently software sales are still being won by HD-DVD. This is a big deal. The PS3 was GUARANTEED by Sony to just about every Studio Exec I know to have pushed them over the top for the XMAS season. They were supposed to win December. They didn't even win the last week of December. HD-DVD is still strongly outselling BD.

It is cheaper for a company to manufacture HD-DVD devices. Denon and Arcam engineers have told me this. They want to make HD-DVD players mainly for that reason. The fact that HD-DVD won the software sales war of Christmas is a big deal for them. They were GUARANTEED that BD would win.

You don't think Disney is asking how in the world did BD lose December sales? Fox? LG? MGM? Heck even Sony? They had the PS3!!!! It shipped about 800k units in the US!!! Throw in the estimated player sales of 50k. That is 850K units vs what? about 300k in HD-DVD?

Early sales show that the PS3 was not the end all answer that Sony promised it would be. HD-DVD won December sales, and shows no sign currently of giving that up in January.

So the question is, what does that show the Studios?

Disney has a CEO that has been leaning neutrality for awhile. He sees no reason there can't be TWO formats that live side by side for a long, long time. Bob might be the smartest guy in this whole entire thing.

Perhaps there is no reason that two formats can't thrive together. Currently both are doing poorly, but the designated winner is currently in 2nd place.

Cheaper players and additional Studio Support will just cause there to be a DRAW.

I foresee a 2010 where both formats exist.

btw, NEWLINE will be announcing HD-DVD titles at the big HD-DVD announcement. I believe that DreamWorks might be as well. I know that both were getting a lot of good incentives to show up.
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post #3 of 185 Old 12-31-2006, 01:03 PM
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Is it supposed to be a critical, objective analysis of the current market and potential effects of CES?

..because it is not. You throw your subjective ideas, guesses, etc. into the mix. I hope that it is supposed to just represent your personal opinion.

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post #4 of 185 Old 12-31-2006, 01:33 PM
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Quote:
Originally Posted by tsd2005 View Post

btw, NEWLINE will be announcing HD-DVD titles at the big HD-DVD announcement. I believe that DreamWorks might be as well. I know that both were getting a lot of good incentives to show up.

So, just to be clear here. New Line Cinema will be announcing HD optical disc titles, exclusive to HD DVD, at Jan 2007 CES?

Also, can you clarify your comments on the Soros owned Dreamworks library?

Thanks.
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post #5 of 185 Old 12-31-2006, 01:39 PM
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Quote:
Originally Posted by Esox50 View Post

So, just to be clear here. New Line Cinema will be announcing HD optical disc titles, exclusive to HD DVD, at Jan 2007 CES?

Also, can you clarify your comments on the Soros owned Dreamworks library?

Thanks.

New line supporting HD DVD and BD is sort of old news and it's been known for a while that they were waiting until 2007 to start releasing. http://www.thedigitalbits.com/articl...freleases.html
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post #6 of 185 Old 12-31-2006, 01:45 PM
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Quote:
Originally Posted by Robert D View Post

New line supporting HD DVD and BD is sort of old news and it's been known for a while that they were waiting until 2007 to start releasing. http://www.thedigitalbits.com/articl...freleases.html

I fully understand that's what they've said previously.

I wanted to make sure I'm not misinterpreting his post. Is he indeed saying New Line is going HD DVD exclusive at CES 2007?
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post #7 of 185 Old 12-31-2006, 02:25 PM - Thread Starter
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Quote:
Originally Posted by Johnsteph10 View Post

Is it supposed to be a critical, objective analysis of the current market and potential effects of CES?

..because it is not. You throw your subjective ideas, guesses, etc. into the mix. I hope that it is supposed to just represent your personal opinion.

I tried to make clear what were my guesses and opinions. The point of the article is to make a pre-CES guess as to what may happen and what relevance it will have, if any.

We will see what does happen.
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post #8 of 185 Old 12-31-2006, 02:26 PM
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He uses 1st person in the article, so obviously he is telling you his opinion. I actually agree with the article (despite having a PS3 and an A2).

Unless HD DVD gets more software and hardware support it will go bye bye.
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post #9 of 185 Old 12-31-2006, 02:34 PM
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A year ago at CES, it appeared that Blu-ray was a shoo-in.

Not at .. possibly before. Infact last CES was all about HD DVD - with two important news items. The HD DVD add-on for XBox and the $499 HD-A1. Infact as we have seen that $499 HD-A1 has been one of the most important factor in the war until now ....

And it is not HDTV DVD formats ...

Quote:


will virtually decide the HDTV DVD format war.

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post #10 of 185 Old 12-31-2006, 02:48 PM - Thread Starter
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Quote:
Originally Posted by tsd2005 View Post

I think it's very much a Pro-BD article. You even claim that things look like a BD win in 2007 for the Format war.

So you disagree with every firm that makes their living judging market trends?

Toshiba pretty much did what they had to do to guarantee there will be no winner.

It's Toshiba's game to screw up right now. They have an excellent understanding of the market.

BDA has already said they will have a $400 player at CES (I saw this on TV, on CNet). So you know that HD-DVD will have to have an answer. I expect the answer in a $349 package, possibly a $299 package from the Chinese.

2007 may well end up being the year of Neutrality.

LG, Disney, Fox, and MGM will all likely go Neutral by years end, or be leaning that way by year's end.

Toshiba has done a good job of securing a piece of the market. I believe Sony having the edge in Studios and CE support will just make their market share grow. However it won't kill Toshiba's share. Currently software sales are still being won by HD-DVD. This is a big deal. The PS3 was GUARANTEED by Sony to just about every Studio Exec I know to have pushed them over the top for the XMAS season. They were supposed to win December. They didn't even win the last week of December. HD-DVD is still strongly outselling BD.

It is cheaper for a company to manufacture HD-DVD devices. Denon and Arcam engineers have told me this. They want to make HD-DVD players mainly for that reason. The fact that HD-DVD won the software sales war of Christmas is a big deal for them. They were GUARANTEED that BD would win.

You don't think Disney is asking how in the world did BD lose December sales? Fox? LG? MGM? Heck even Sony? They had the PS3!!!! It shipped about 800k units in the US!!! Throw in the estimated player sales of 50k. That is 850K units vs what? about 300k in HD-DVD?

Early sales show that the PS3 was not the end all answer that Sony promised it would be. HD-DVD won December sales, and shows no sign currently of giving that up in January.

So the question is, what does that show the Studios?

Disney has a CEO that has been leaning neutrality for awhile. He sees no reason there can't be TWO formats that live side by side for a long, long time. Bob might be the smartest guy in this whole entire thing.

Perhaps there is no reason that two formats can't thrive together. Currently both are doing poorly, but the designated winner is currently in 2nd place.

Cheaper players and additional Studio Support will just cause there to be a DRAW.

I foresee a 2010 where both formats exist.

btw, NEWLINE will be announcing HD-DVD titles at the big HD-DVD announcement. I believe that DreamWorks might be as well. I know that both were getting a lot of good incentives to show up.

A lot of good points here, I won't respond to them all.

1. Yes, I am pro-BD based on the specs. I think I also gave a very fair accounting of Sony's problems and Toshiba's successes in the article. I am very critical of Sony.

2. Certainly, events at this show could be very significant. That was my point. If, as you suggest, Disney goes neutral, that would be important.

3. Cost of manufacture is obviously converging as components become available. Going forward this will not be a factor. In fact, the Toshiba A1 was planned to debut for $999 until Toshiba wisely lowered the price.

4. Companies like Arcam and Denon will not affect the format war, their price points are too high to be of any interest to most consumers. Arcam's current upscaling DVD player (DV-29) is $3000; if they announce an HD DVD player, what would it list for? How many would they sell?

5. Where do you get your information about December disk sales? From what I am hearing, Blu-ray is on a better track than many people thought. There was a prediction that the PS3 would have no real interest as a Blu-ray player, obviously not true. Of course it is an expectation game.


Thanks for your post.
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post #11 of 185 Old 12-31-2006, 02:52 PM - Thread Starter
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Quote:
Originally Posted by nataraj View Post

Not at .. possibly before. Infact last CES was all about HD DVD - with two important news items. The HD DVD add-on for XBox and the $499 HD-A1. Infact as we have seen that $499 HD-A1 has been one of the most important factor in the war until now ....

And it is not HDTV DVD formats ...

Last year at CES, HD DVD did better than expected, but the consensus was still that Blu-ray was a shoo-in.

The full importance of Toshiba's decision to subsidize the A1 and drop the price from $999 to $499 was not appreciated until the summer. In part, this was because the PS3 turned out to be a lot later than it had been expected at CES.
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post #12 of 185 Old 12-31-2006, 03:00 PM
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Its kind of a silly article-little more than stating "I'm waiting to announce BD ther winner", without any real data.
Weee.
J
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post #13 of 185 Old 12-31-2006, 03:03 PM
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Quote:
Originally Posted by rlsmith View Post

Last year at CES, HD DVD did better than expected, but the consensus was still that Blu-ray was a shoo-in.

What consensus ... definitely not in avs or the press I read.

Quote:


The full importance of Toshiba's decision to subsidize the A1 and drop the price from $999 to $499 was not appreciated until the summer. In part, this was because the PS3 turned out to be a lot later than it had been expected at CES.

May be not by you ... if you go back and read the relevent posts, you will see that many of us recognized the importance.
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post #14 of 185 Old 12-31-2006, 03:05 PM
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So we've got a pro-BR article written by someone with admitted pro-BR bias...

*snore*

I really don't get the point of so-called "predictive" articles and columns, other than people hoping that they'll be able to say "Nyah nyah! Told you so!" after the fact.

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post #15 of 185 Old 12-31-2006, 03:06 PM
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Originally Posted by nataraj View Post

And it is not HDTV DVD formats ...

Yes.

Its High Definition, but not television. HD optical software would probably be the best way to phrase it, unless software will not be commonly understood as discs. DVD is a loaded term as it can't apply to BD.

While there were clear biases in the article, it is better than most of the filth that people put online in terms of "analysis" of the war.

BD is not doing as well as you make it out in this article. Their software offerings have improved, but we're not at the point where 50GB discs are "common."

I think CES will have way more surprises for HD DVD and those surprises will be positive. I'm curious as to whether the BD surprises will be from a lack of annoucements or something dealing with playing on security fears.

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post #16 of 185 Old 12-31-2006, 03:15 PM
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Nice article. IMO if Toshiba doesn't have some more studio and hardware support to announce for HD DVD at CES then their days are numbered.
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post #17 of 185 Old 12-31-2006, 03:16 PM
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Quote:
Originally Posted by rlsmith View Post

Here is my article on CES and the format war:

http://www.tvpredictions.com/rsmith122906.htm


I am writing a follow-up after the show, and would appreciate any comments or input here.

Thanks to everyone and Happy New Year!

Your article fails to mention some very significant points that should not be overlooked, such as:

* That the majority of PS3 owners bought the PS3 for games, not movies
* That ALL X360 HD DVD add-on owners are soley for HD DVD movies
* That Toshiba HD DVD players sell out as quickly as they can stock them
* Does not note that Blu-Ray disc sales have always lagged behind HD DVD
* Did not mention the In-Movie-Experience and U-Control that is winning HD DVD fans
* Failed to underscore that though Blu-Ray has been improving, HD DVD has been consistently better and has won High-Def Digest's Best Of 2006 list
* Did not note that although BD50 discs have begun shipping, they have yet to prove to be any better than HD30 since PQ still lags behind or, at best, only matches HD DVD

Despite Blu-Ray's specs and improvements, HD DVD has the momentum behind it that shows no signs whatsoever of slowing down.

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post #18 of 185 Old 12-31-2006, 03:44 PM
 
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Quote:
Originally Posted by rlsmith View Post

Here is my article on CES and the format war:

http://www.tvpredictions.com/rsmith122906.htm


I am writing a follow-up after the show, and would appreciate any comments or input here.

Thanks to everyone and Happy New Year!


good, balanced article.


But why put Sony on the spotlight?? blu-ray is BDA
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post #19 of 185 Old 12-31-2006, 03:45 PM
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Nicely written article rlsmith, although I don't agree with it. It really doesn't matter what each sides writes about the other. The other will simply tear it down anyway.

You know, we all have our opinions on whats going to happen. So far, I have yet to a single one thats been correct. I know mine haven't been. CES will be important, no doubt.
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post #20 of 185 Old 12-31-2006, 03:57 PM - Thread Starter
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Quote:
Originally Posted by nataraj View Post

What consensus ... definitely not in avs or the press I read.



May be not by you ... if you go back and read the relevent posts, you will see that many of us recognized the importance.

nataraj,

We could continue to argue about this historical point forever. I agree that Toshiba made some good decisions.

What do you think about the central thesis of the article?
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post #21 of 185 Old 12-31-2006, 04:41 PM
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Quote:
Originally Posted by Esox50 View Post

So, just to be clear here. New Line Cinema will be announcing HD optical disc titles, exclusive to HD DVD, at Jan 2007 CES?

Also, can you clarify your comments on the Soros owned Dreamworks library?

Thanks.

Newline is planning on being neutral. However early releases by them will be on HD-DVD only, because PiP is not yet available on BD. That is unless the BDA has somehow got them to wait. I heard about the Newline announcements 2nd hand.

A friend at DCM told me they will be releasing titles on HD-DVD in 2007 and are likely to be part of the announcement on the 7th. I don't know if they are going to be neutral or not. Paramount will be distributing their titles.
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post #22 of 185 Old 12-31-2006, 04:59 PM
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Quote:
Originally Posted by rlsmith View Post

A lot of good points here, I won't respond to them all.

1. Yes, I am pro-BD based on the specs. I think I also gave a very fair accounting of Sony's problems and Toshiba's successes in the article. I am very critical of Sony.

2. Certainly, events at this show could be very significant. That was my point. If, as you suggest, Disney goes neutral, that would be important.

3. Cost of manufacture is obviously converging as components become available. Going forward this will not be a factor. In fact, the Toshiba A1 was planned to debut for $999 until Toshiba wisely lowered the price.

4. Companies like Arcam and Denon will not affect the format war, their price points are too high to be of any interest to most consumers. Arcam's current upscaling DVD player (DV-29) is $3000; if they announce an HD DVD player, what would it list for? How many would they sell?

5. Where do you get your information about December disk sales? From what I am hearing, Blu-ray is on a better track than many people thought. There was a prediction that the PS3 would have no real interest as a Blu-ray player, obviously not true. Of course it is an expectation game.


Thanks for your post.

1. I've never been a fan of paper. I always base my decisions on how things affect me in the real world. HD-DVD was no surprise to me.

2. LGF will make their switch at CES, Disney is being lead poorly on this point. I think Bob will step in after CES to force the switch, but I could be wrong. It may still happen at CES.

3. Cost of manufacture has always been less expensive for HD-DVD. For one the A1 was never subsidized as many like to claim. Everyone at Toshiba has told me that was just a vicious rumor. In fact I've been told the A2 could be dropped to $349 MSRP without too much difficulty for them, and yes they'd still be making money. Which means the Chinese could likely really come out with a $299 or less player. I just don't see BD anywhere near that.

4. Yes, the Arcam FMJ line is expensive. It's also their top of the line. They have a DVD player for under $1,000. I'd expect their HD-DVD player to be around $1,200 to $1,500. That was the range they told me if they made one. I'd rather have an Arcam than a Pioneer, and it would definately be up against them. You however missed the point. If it's "far less expensive," for Arcam to make a HD-DVD than BD, then that again states the advantage that HD-DVD has.

5. Nobody with a brain thought the PS3 wouldn't be a factor. In fact every analyst picked BD to win because of the PS3. The BDA was GUARANTEED to win Christmas. They promised people it would happen. Analysts bought the theory. Meanwhile a select few said "wait, we don't know how big an impact it will be, but we agree it will be an impact." What it did was take BD sales out of the gutter. BD sales have grown substantially and it's all thanks to the PS3. However HD-DVD sales picked up with the same exact bit of steam. So HD-DVD software sales are doing EXTREMELY well. They are still outselling BD. Videoscan estimates that December sales will show that HD-DVD outsold BD 1.5:1.

For you to even hint that BD wasn't supposed to catch up that well is a joke. BD was supposed to surpass HD-DVD and leave it in the dust. It just wasn't able to do it. The PS3 numbers weren't enough, yet. That's a big deal. For one Sony and the BDA's expectations for software sales have all been wrong. For another Sony's expectations of surpassing HD-DVD sales by October was wrong. By November was wrong. By December was wrong. By January was wrong. Being wrong FIVE times to Studios is not a good sign. Meanwhile the guys trying to win you over keep on doing what they said they were going to do.

However PS3 sales are supposedly dropping. They aren't flying off shelves anymore. The frenzy has slowed dramatically. I'd say this is Sony's fault. If Sony had say 2M to release on opening day, they'd have sold them all. Yet, they didn't. So what happened was about 200,000 sold. And people saw their friends PS3 and said "you know what it isn't that great...."

This format war is over. It's going to be a tie. Disney sees that, and that is why at somepoint in 2007, Disney will be neutral.
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post #23 of 185 Old 12-31-2006, 05:02 PM
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Quote:
Originally Posted by tsd2005 View Post

Newline is planning on being neutral. However early releases by them will be on HD-DVD only, because PiP is not yet available on BD. That is unless the BDA has somehow got them to wait. I heard about the Newline announcements 2nd hand.

A friend at DCM told me they will be releasing titles on HD-DVD in 2007 and are likely to be part of the announcement on the 7th. I don't know if they are going to be neutral or not. Paramount will be distributing their titles.

I'm not surprised. New Line likes to go crazy with interactivity and it seems to me they'd go with HD DVD and HDi first since BD-J is still a little behind at the moment.

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post #24 of 185 Old 12-31-2006, 05:39 PM - Thread Starter
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^
tsd2005,

Thanks for the post.

I am a bit surprised at the amount of credit you are giving Disney for knowing what they are doing. Next to Sony, they seem to have done the poorest job overall in supporting hidef disks.

Up until now, their offerings on BD have been sadly lacking. The best title was "Eight Under", which is nice, but all of us could list all of the titles that would make a difference.

I was quite prepared to buy Cars and Pirates on Blu-ray this Christmas. Disney didn't want to sell them.

Their announcements after the first of the year are more impressive, and in fact suggest a strong commitment to BD in the use of BD50, but still far less than what they could do.

I well remember that Disney launched 2 DVD titles in late 1997, Mary Poppins and something else. They didn't sell, and so Disney decided that DVD was a loser. The MP was filled with mosquito noise, really very poor. Then, after a Divx flirtation, they finally started with DVD in earnest after some analysts pointed out that they had missed the boat by not supporting DVD. Now, the way Disney talks about DVD, you would think they invented it.

If Disney really cared about hidef disks and their future, they would be a) supporting both formats, and b) putting some of their key titles on the line. At least we should have seen Pirates day-and-date for example.

As to your number of 1.5:1, if it is true, I am still not that discouraged. Remember that Blu-ray still has significantly fewer titles in the market. As I pointed out in the article, it is the upcoming scheduled releases that impress me for BD. Of course, if Disney expected something more favorable, then I guess they could be discouraged.

As I stated in the article, I think a key point among the studios may be the "let's get it over with" attitude about the format war. If Disney thinks that supporting HD DVD would just prolong the format war, they will hold off. I think this has been their thought.

Your idea is that the format war is actually over and both will survive. I don't know about that one.
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post #25 of 185 Old 12-31-2006, 05:53 PM
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TVPredictions.com recently seems to have a BD bias and I tend to adjust for that as I read it. They may actually be right but my own predictions suggest somewhat differently.

But hey, everybody's got an opinion.

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post #26 of 185 Old 12-31-2006, 05:58 PM
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All other points aside. Sony has blown their advatage and it will be very tough for them to recover. The studios are certainly rethinking their current stance with BR. They would be poor business men not to. And even with all the misteps, they are not poor business men and will follow the dollar.

The PS3 is not doing as well as expected and I don't believe it ever will. They have upset their base customers with the pricing and thats a possible fatal error for BR. The Wii is a real threat to them and is taking many of their PS3 customers away. Again due to cost.

Sony's credibality is very low and any additional misteps by them will spell disaster for exclusive support for most, if not all, the studios over the coming year.
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post #27 of 185 Old 12-31-2006, 06:00 PM
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Quote:
Originally Posted by rlsmith View Post

^
tsd2005,

Thanks for the post.

I am a bit surprised at the amount of credit you are giving Disney for knowing what they are doing. Next to Sony, they seem to have done the poorest job overall in supporting hidef disks.

Up until now, their offerings on BD have been sadly lacking. The best title was "Eight Under", which is nice, but all of us could list all of the titles that would make a difference.

I was quite prepared to buy Cars and Pirates on Blu-ray this Christmas. Disney didn't want to sell them.

Their announcements after the first of the year are more impressive, and in fact suggest a strong commitment to BD in the use of BD50, but still far less than what they could do.

I well remember that Disney launched 2 DVD titles in late 1997, Mary Poppins and something else. They didn't sell, and so Disney decided that DVD was a loser. The MP was filled with mosquito noise, really very poor. Then, after a Divx flirtation, they finally started with DVD in earnest after some analysts pointed out that they had missed the boat by not supporting DVD. Now, the way Disney talks about DVD, you would think they invented it.

If Disney really cared about hidef disks and their future, they would be a) supporting both formats, and b) putting some of their key titles on the line. At least we should have seen Pirates day-and-date for example.

Now, if you had put this kind of insight into the article, that would have made for unique and worthwhile reading! . But it may have screwed up the conclusion you drew at the end so maybe its omission was for the best...

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post #28 of 185 Old 12-31-2006, 06:17 PM - Thread Starter
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Quote:
Originally Posted by amirm View Post

Now, if you had put this kind of insight into the article, that would have made for unique and worthwhile reading! . But it may have screwed up the conclusion you drew at the end so maybe its omission was for the best...

Thanks I think.

I am not sure that I thought the article was even very controversial in a way.

It is a simple matter to look at the numbers of titles coming out from the supporting studios and also the CE support with players and to see that the Blu-ray strategy, as clunky as it was, may be working at long last.
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post #29 of 185 Old 12-31-2006, 06:50 PM
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It's not that bad an article. For someone who admits pro-BR bias, HD DVD was given a number of compliments. The shortcomings that were noted were fair. As far as guessing the winner, I'll agree that there's really no point. If the article is supposed to be about CES 2007, then it doesn't need to be looking forward to the end of 2007. Save that for the CES 2008 article.

The only thing that I strongly disagreed with is:

"The PS3 has been very well received as a Blu-ray player, and it is now clear that game consoles are a large part of the format war."

There's no data to back this up, and is a very debatable topic, but it comes across as a fact rather than opinion.
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post #30 of 185 Old 12-31-2006, 06:53 PM
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Quote:
Originally Posted by stevenmh View Post

The only thing that I strongly disagreed with is:

"The PS3 has been very well received as a Blu-ray player, and it is now clear that game consoles are a large part of the format war."

There's no data to back this up, and is a very debatable topic, but it comes across as a fact rather than opinion.

I don't know about solid data for the PS3 yet, but I think when the year end numbers come in we will see that add-ons for the 360 outnumber standalone HD DVD players by a wide margin.

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