McNutt Against the Music

The format war is dead…long live the format war?

If you have the slightest bit of geek in your blood, you’re probably well aware of last week’s news that Warner Bros. has abandoned its support of the HD-DVD format and is going Blu-ray exclusive. The studio was one of the last remaining holdouts to pick a side in the high-definition DVD war that started last year, a weird replay of the Betamax/VHS battle that accompanied the launch of home video in the 1980s.

The HD-DVD camp, led by its founder Toshiba, believed that cheap hardware was the key to victory, which is why you’ve seen ridiculously good deals on its players during the past few months. Sony, on the other hand, built their Blu-ray strategy around two key pillars: including the technology in the Playstation 3 system to gain a leg-up in sales (a decision that has hurt the Playstation brand as much or moreso than it’s helped Blu-ray) and courting a majority of studio support to control more content.

Ultimately, the studio strategy is what worked: Blu-ray sales have remained consistently ahead of those of HD-DVD and most observers consider Warner’s abandonment of the latter to be the final straw. Blu-ray now has exclusive access to 70 per cent of all studio content, a number that is insurmountable. Rumour is that Paramount and Dreamworks – who just signed exclusive agreements with HD-DVD late last year – are planning to exercise out-clauses in their contracts and jump ship.

So the format war is clearly over…right? To answer that question, you’ve got to first answer another one: why was there a format war in the first place?

The answer, of course, is money. Your money, in fact. Sales of traditional DVDs have slowed significantly in the past couple of years, which makes sense. Not only is the format facing a number of competitors – downloading, video-on-demand, services like Netflix – but the studios are running out of catalogue titles. Nearly every notable movie ever made has at least one DVD edition (if not several), and the TV-on-DVD cash cow is running into a similar problem.

The solution the studios have come up with to keep the profits rolling in is to get you to buy your collection all over again. They’re ramping up the technology standard and hoping that good people like you will gladly spend the cash to watch your favourite movies in true 1080p high definition on the new HDTV that you own or are likely to own in the near future.

Standing in the way of the studios’ money-grubbing goals is one massive inconvenient truth: consumers are overwhelmingly happy with their DVDs.

As they should be. The leap from VHS to DVD was long-overdue, finally removing consumers from the suffocating grasp of worn-out tapes and pan-and-scan cropping. It took the foundation of the Laserdisc format and made it palatable to a mass audience, bringing special features and audio commentaries along for the ride. Movies could finally be viewed in the comfort of one’s own home the way they were meant to be seen. It was nothing less than an audio/visual revolution.

I’ve seen Blu-Ray. It’s beautiful, no doubt. But sorry, techies: it’s not a revolution.

I’m not alone in this opinion. An NPD survey this fall showed that 73 per cent of HDTV owners were satisfied with their traditional DVD player and doubted they would replace it anytime soon. The chairman of the Blu-ray Disc Assocation even admits that consumers won’t see a dramatic difference between standard and high-definition DVDs unless they’ve got a television that can output in 1080p – a resolution that many HDTVs aren’t even designed for!

Further complicating the studios’ plans is that for many HDTV owners, high definition isn’t even on their radar. A study that Best Buy commissioned last year found that 41 per cent of HDTV owners understood little to nothing at all about high definition (a finding which inspired them to launch a comprehensive “HD Done Right” education campaign). Customers aren’t buying HDTVs because they want HD content – they’re buying them for their size (screen and body) and because it’s really all that’s available these days. If you want a TV these days, you buy an LCD or a Plasma – it’s become public common sense.

I have no doubt that things will improve on this front – that more consumers will become aware of high definition content and begin to adopt it in 2008 and beyond. But I think this is far more likely to happen for HD television signals, where the leap in quality from traditional broadcast is far more noticeable (especially if you’re a sports fan). With Blu-ray discs still priced at a significantly higher premium than traditional DVDs, and with the value proposition still unclear to a majority of consumers, the format will struggle to expand beyond a tech-savvy niche audience.

I, for one, am sticking with my DVDs. And I suspect that I’m not alone in that.