Why Universal Supports HD DVD

[Boz]

Universal Home Video's Ken Graffeo (executive vice president of HD strategic marketing) speaks up about why Universal supports HD DVD and what their plans are:

Q: I imagine the pressure on you is pretty intense when you talk with your studio peers. Having two rival formats keeps most consumers on the sidelines waiting for a winner. How do you respond to that?

A: I'd argue that this format war is actually beneficial to the consumer. A little over a year ago, the least expensive HD-DVD player was $799. Now, with Toshiba's current rebate promotion (good through June 16), you can get an HD-DVD player for as little as $299.

On the Blu-Ray side, the players started at $1,000 to $1,800 at the end of [2006] and this summer will be down to $599 with new models from Sony and Panasonic. It's the format war that's driving pricing down at such a dramatic, accelerated rate.

Q: Why did Universal opt for HD-DVD?

A: Several years ago, we looked at the technology and decided that this format would offer the better set of mandatory specifications.

From day one, every HD-DVD player made has to have an Ethernet port for online connectivity. And every player had software to support unique, interactive viewing experiences either programmed onto a disc or available online. We're exploiting this on many Universal releases.

In Blu-Ray, the interactive specs are still just an option. The only Blu-Ray player now sold with an Ethernet port is the PlayStation 3.

A lot of their players can't even support the interactive BD-Java software that's running the two new (Blu-Ray-exclusive) "Pirates of the Caribbean" titles.

[Editor's note: The balking Samsung, Philips and Sony players will eventually show the "Pirates" discs but only after a firmware upgrade.]

In fact, the Ethernet and Java specs for Blu-Ray won't be fully firmed up until Oct. 31.

That's why Warner Bros. is putting out a more sophisticated, online-connected version of "Blood Diamond" on HD-DVD and upcoming 300 HD DVD, and also why they've put out "Batman Begins" and the new "Matrix" box sets first on HD-DVD.

Q: How about the manufacturing costs?

A: Also very important - and lower for HD-DVD discs and players.

When you can get below $300 for hardware, you open up the mass market. Now people are willing to jump in and buy a player.

Even if the other format were to eventually win, there's no risk. Because that HD-DVD player you buy will still play your regular DVDs and, by upconverting, will actually make the discs look better. I can't imagine Blu-Ray getting even close to a $300 player this year. I expect their lead dog, PlayStation 3 [now $599], to drop $100, but that's it.

Q: Sales figures for Blu-Ray movie discs are significantly higher this year than for HD-DVD. How do you counter the argument that the tide has turned in Blu-Ray's favor?

A: We didn't have many hot releases in the first quarter, or many releases at all. They had some real biggies, like "Casino Royale." The fourth quarter will be telling. Our releases will be stronger, and we're looking for a big attach rate [that's disc sales per player] when people jump for an inexpensive HD-DVD machine to show off their new high-def TV set.