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"Notice of CES Press Conference Cancellation by North American HD DVD Promotion Group: Based on the timing of the Warner Home Video announcement today, we have decided to postpone our CES 2008 press conference scheduled for Sunday, January 6th at 8:30 p.m. in the Wynn Hotel. We apologize for any inconvenience this may cause. We are currently discussing the potential impact of this announcement with the other HD DVD partner companies and evaluating next steps. We believe the consumer continues to benefit from HD DVD's commitment to quality and affordability -- a bar that is critical for the mainstream success of any format. We’ll continue to keep you updated on new developments around HD DVD."

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Quoting mdnitoil:

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Ouch...the next mainstream home video format exclusively controlled by Sony.  Given how thoroughly they've screwed consumers in the past when they are in control, it does not bode well for innovation or pricing.  Oh well, to the victor goes the spoils.  Too bad we're the spoils.

Ugh, no!

How about "controlled by the Blu-ray Disc Association".

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Warner Bros. backs Blu-ray
Studio to support Sony high-def format
By DIANE GARRETT

Warner Bros. will throw all its weight behind Blu-ray later this year, a decision that could serve as a death blow to the rival HD DVD format.

Studio, which had hinted it might drop one format after the holidays, said it decided to back Blu-ray to try and reduce confusion brought on by the high-def format war and better drive mainstream adoption. Warner made the decision heading into the annual Consumer Electronics Show confab in Las Vegas, where it had been skedded to participate in activities promoting the rival HD DVD format on Sunday evening.

Warner execs cited Blu-ray's domestic and international sales as the tipping point in its favor. From the start, the Sony developed format enjoys has had an advantage in greater studio support and the PlayStation 3 console, which plays high-def movies and, at least in the early going, was much more affordable than Blu-ray decks, which have tended to carry a higher price tag than HD DVD counterparts.

Warner's move leaves only Paramount and Universal squarely in the HD DVD camp. Sony, Fox, Disney and Lionsgate all back Blu-ray. Warner sister company New Line confirmed it will shift allegiance to Blu-ray only as well.

Warner has been the sole major backing both formats since late this summer, when Paramount dropped Blu-ray in favor of HD DVD, due in part to marketing incentives proffered by Toshiba and belief HD DVD's lower cost would drive greater mainstream adoption.

However, hardware manufacturers for both sides offered sizable discounts for players during the holidays, reducing the price gap between the two formats. And studios did their part to dangle promotional incentives on the software side.

Yet Warner found that consumers still hesitated to dip their toes into the high-def waters due to confusion over the dueling formats.

"The price impediment was going away, but the take up wasn't increasing that much," said Warner Home Entertainment topper Kevin Tsujihara. "The research was making it pretty clear there was still a tremendous amount of confusion among consumers."

Supporting both formats came with a cost for the studio, which had to maintain dual inventories for their releases. And while the studio had some of the best sellers on high-def when both formats were added together, they couldn't help but wonder whether dual support was helping, or hurting, the transition to a next-gen format.

"By us being both, we were playing into consumer confusion," Tsujihara said. "There's a window of opportunity with first time buyers of HD TVs to also buy a high-def player at the same time."

"The window of opportunity for high-definition DVD could be missed if format confusion continues to linger," Warner Bros. chairman and CEO Barry Meyer seconded.

However, the studio insists that cost was not the underlying motivation for the shift. Paramount drew a lot of flak for taking Toshiba incentives, said to be $150 million, to exclusively back HD DVD.

"This was not a bidding war," Tsujihara said.

He pointed out that worldwide the DVD biz brings in $42 billion annually and his studio draws the greatest portion of that as market share leader.

"That amount far dwarfs any financial incentives," he said.

And indeed, Paramount has maintained that it backed HD DVD because it was generally lower priced and therefore had a greater chance of mass adoption.

Warners' Blu-ray shift has been rumored for some time, but the studio insisted it would wait to see how both formats fared during the crucial holiday sales period before backing one format exclusively. Indeed, late in the fourth quarter, the studio ran full page newspaper ads touting HD DVD benefits on one side and Blu-ray on the other. During this point, homevid topper Ron Sanders talked openly of the need to move beyond the format war and convince consumers of the benefits of high-def (Variety, Dec. 17-23).

Warner’s timing apparently took the HD DVD camp by surprise, however. Thursday afternoon, shortly before Warner said it notified Toshiba of the decision, HD DVD backers were paying media calls. The North American HD DVD Promo Group cancelled its Sunday CES confab after Warner’s went public with the decision Friday afternoon.

The shift doesn’t go into effect until June 1. Sanders said the studio will continue to release HD DVD discs until May 31 to honor its previous commitment to that format’s backers, then switch to Blu-ray only on the high-def front. Last summer, Blockbuster similarly phased out HD DVD discs from rental rotation.

Sanders said the studio will continue to release HD DVD discs until May 31 to honor its previous commitment to that format's backers, then switch to Blu-ray only on the high-def front. Blockbuster similarly phased out HD DVD discs at its rental stores.

Studios and manufacturers have been fighting a pitched battle over high-def because there is so much at stake: Sales of standard DVD has started to decline and digital downloads are even smaller than high-def at this point. DVD sales generate around $16 billion annually for the studios, with rental biz contributing another $8 billion or so to the annual domestic homevid spending.

Warner's decision to back Blu-ray exclusively reps its third shift in high-def strategy. Initially, the studio said it would back HD DVD, then shifted toward dual format support in October 2005, several months before the first high-def discs hit shelves (Daily Variety, Oct. 20, 2005). Paramount made similar moves before settling on HD DVD late this summer (Daily Variety, Aug. 21). That commitment is believed to run through this year.

Warner's shift toward Blu-ray is expected to hasten the demise of HD DVD. Victory would give Sony a long awaited triumph after Betamax lost the videocassette war to VHS.