AFI BLOG: Media and Technology

Wall Street Journal

In a move that could tip the balance of power in the format war over the next generation of DVDs, Time Warner Inc.’s Warner Bros. Entertainment said it plans to release high-definition movies exclusively in the Blu-ray format, dealing a major blow to rival HD DVD.

The arrangement means the HD DVD format, which is backed by Toshiba Corp., will be left with support from just two major studios: General Electric Co.’s Universal Pictures and Viacom Inc.’s Paramount Pictures. Besides Warner Bros., the other major studios — Sony Corp., Walt Disney Co. and News Corp.’s Twentieth Century Fox — are committed to Blu-ray exclusively. The two formats are incompatible, meaning that buyers of HD DVD players cannot play movies issued in Blu-ray, and vice versa.

Hollywood is eager to conclude the years-long battle over a format for high-definition DVDs, and Warner’s decision will prompt many in Hollywood to conclude that the format war is nearly over, with Blu-ray the winner. The boom in regular DVDs, which lifted the financial performance of the movie studios in the early 2000s, has stalled, leaving the industry hungry for a new format that can entice consumers to replace their current DVD libraries with high-definition copies.

Warner Bros. executives said slowing overall DVD sales last year, and particularly last quarter, weighed heavily in their decision. Last year, DVD sales dropped 5% from 2006, according to Adams Media Research, contributing to fears among studio executives that consumers were holding off on buying DVDs of any kind until the format war was resolved.

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