Disney opts for Blu state in disc biz

Mouse backs Sony's Blu-ray

WASHINGTON — Barely a week after Warner, Universal and Paramount announced their support for the HD DVD format, Disney rocked the industry Wednesday by lining up on the other side of the high-def format war and backing Sony’s Blu-ray Disc standard.

Announcement leaves Hollywood split virtually down the middle between the two contending high-def standards: Warner, Universal and Paramount are going HD DVD; Sony, Disney and, presumably, MGM are going Blu-ray.

The only major studio yet to declare an allegiance is Fox, which has a foot in both camps through its memberships in the Blu-ray Disc Assn. and the DVD Forum. But it has not committed to releasing product in either format.

Disney’s commitment to Blu-ray is nonexclusive, like that of the three studios supporting HD DVD.

“One of Disney’s key priorities is to take advantage of new technologies to drive innovation and growth in order to create increased value for our shareholders,” said Disney exec VP and chief strategic officer Peter E. Murphy. “We believe that Disney’s portfolio of outstanding brands and content combined with the Blu-ray technology offers a major step forward for consumers eager to experience high-definition content.”

Clash of the formats

While Disney has long hinted at a preference for Blu-ray, the announcement is a blow to Warner and its HD DVD allies, who had hoped their own high-profile embrace of the Toshiba-developed standard would knock Blu-ray out of the game and avert a format war.

But with Disney now in its corner, the Sony-led Blu-ray camp is certain to forge ahead with plans to launch the format in late 2005 or early 2006.

With HD DVD slated to hit stores around the same time, consumers could be faced with two incompatible formats, each offering titles not available on the other.

Disney homevid prexy Bob Chapek, however, rejected the notion that the Mouse’s decision makes an all-out format war more likely.

“I think the chances for a format war are actually smaller today than they were yesterday,” Chapek said. “I think this gives the two (hardware) sides more impetus to get together and work out a unified format. Up to now, the division has been hardware versus software. But now that you have division between the studios, I think there’s more reason than ever to come together.”

Whether a unified format is even possible, however, is a matter of dispute.

Blu-ray discs are slightly thicker than HD DVD discs, making physical convergence difficult. The two formats also use different methods to read data off the discs.

At stake for both sides are potentially billions of dollars in patent licensing fees, making each side reluctant to give up its proprietary technology for format peace.

Interactivity a plus

In the meantime, Chapek said, Disney chose to go with what it regards as the superior technology.

“At the end of the day, the consumer has to be happy with this thing,” he said. “We think Blu-ray offers a more enhanced entertainment experience. If there isn’t a unified standard, and you believe that the best format will win, then you have to go with the most capable format.”

In addition to offering greater storage capacity on a single disc, Blu-ray developers agreed to incorporate an “applications” layer into the format, allowing the studios to add interactive features to their high-def discs.

“Sony was much more receptive to our requirement of greater interactivity,” Chapek said. “I think we need to offer consumers as much of a leap over the current technology as DVD was over VHS, not just a better picture.”

He also cited Blu-ray’s greater support among hardware makers, which he said would help build the installed base of Blu-ray players more rapidly than that of the HD DVD base.

“The larger the installed base, the bigger the market for us,” he said.

Chapek said Disney did not receive any payment or other monetary inducement to side with Blu-ray.

“I know there have been rumors out there about that kind of thing, but it just didn’t happen,” he said.

Title selection

Disney’s initial release plans for Blu-ray call for a mix of catalog titles and “selected” new releases, Chapek said.

Not likely to appear quickly on Blu-ray, however, are any of Disney’s animated classics.

“Those are the crown jewels. You won’t see them until there’s enough of a base of players out there to maximize those assets. What you’ll see in the beginning are titles that are likely to appeal to early adopters.”

As for the timing, “We plan to be there when the hardware is,” Chapek said. “That could be late 2005 or 2006. The way things look right now, 2006 is probably a more realistic target.”

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