Rival hi-def formats try to establish themselves before time runs out

Give HD DVD and Blu-ray Disc a little time, and one of these high-definition disc formats could conceivably catch on and outstrip DVD’s record sales volumes.

But forget about just competing with each other in the erstwhile “format war.” In the 75 days leading up to Christmas, the respective boosters of HD DVD and Blu-ray need to find a way to convince consumers that hi-def discs are the season’s “It” gift.

So far, it doesn’t look like 2006 is going to be a breakout year for either format. In fact, Warner just cut its ’06 consumer-spending projections for both HD DVD and Blu-ray. The studio says consumers spent just $30 million on high-def hardware and software through September, about half what Warner forecast.

“The clock is ticking,” says Richard Doherty, an analyst with research firm Envisioneering. “For every month that there’s consumer confusion on packaged media, leased boxes take more and more of the viewer’s time.”

Those “leased boxes” are what many households now pair with their cable or satellite service.

Products from the likes of TiVo and EchoStar, Doherty notes, can record up to a dozen hi-def pics. That’s about as many discs as a typical household would buy for their new HD DVD or Blu-ray box.

Then there’s the noise being made on the movie download front by Apple’s iTunes, Amazon’s Unbox, and Movielink.

Delivery of hi-def pics over broadband is still a time-consuming process. “But other than that, there’s nothing preventing us from doing it right now,” says Movielink CEO Jim Ramo.

So, besides beating one another in the format war, what do HD DVD and Blu-ray need to do to get big quickly?

Here are five things homevid honchos say need to happen:

Get more set-top players to store shelves

A lack of traditional hardware for Blu-ray and HD DVD is hi-def packaged media’s “biggest inhibitor,” says Ron Sanders, president of Warner Home Video (which supports both formats).

Having sold nearly 30,000 HD DVD players to date, Toshiba reportedly will make roughly 400,000 decks available through March 2007, with additional support coming from RCA and others.

Meanwhile, Samsung — currently the only brand in the Blu-ray set-top space — will soon be joined by Panasonic, Pioneer and Sony. None of the Blu-ray boxes are priced anywhere near Toshiba’s $499 HD DVD model. Samsung’s BD-P1000 player sells for $999, for example.

“As the prices of components come down, bringing the price of hardware down in the middle and end of 2007, then I think (hi-def discs) start getting adopted relatively quickly,” Sanders says.

Target the right demos … with the right demos

Promotion will be key for either format to gain mass acceptance.

Hence HD DVD champions have announced a campaign for what they call “the look andsound of perfect” — touring the country with an 18-wheeler that shows off the optimal HD DVD home theater setup. Meanwhile, Blu-ray backers have promised to expand their print, TV, Internet and outdoor presence.

“The most difficult thing when you have a new market is to make sure that people get the right demonstration,” says Craig Kornblau, president of Universal Studios Home Entertainment.

Both camps realize that offering more than double the lines of resolution over standard-def DVD, picture quality is the attribute they need to play up. And it’s the high-end market that can most appreciate that right now.

For HD DVD and Blu-ray marketers, that means making sure early-adopting tastemakers — those with primo 1,080-line HDTV sets at home, as opposed to those with mere 720-line resolution — sample the discs first.

It’s these guys — and they will be mostly guys in the beginning — who will build the hi-def disc business by word of mouth, Kornblau maintains.

Go the extra mile on extras

Early HD DVD and Blu-ray releases included few of the next-generation bonus features touted for both formats.

However, studios are beginning to deliver on their promise of an even more immersive and interactive entertainment experience, one that stays fresh through multiple viewings.

On U’s HD DVD version of the “The Fast and the Furious: Tokyo Drift,” for example, viewers can turn on a virtual GPS to follow car chases through the streets of Tokyo, and get pop-up commentary from helmer Justin Lin, while the movie rolls.

Get in the game

It was Sony’s PlayStation 2 that brought DVD to millions of homes at a critical time in the format’s development.

“We now know from our consumer research that roughly 92% of people who have PlayStation 2s have used them as movie playback devices,” says Sony Pictures Home Entertainment worldwide prexy David Bishop.

Likewise, Bishop says, the Blu-ray-based PlayStation 3 represents a “tipping point” for hi-def movies. Even though Sony Electronics scaled down quantities for its U.S. launch Nov. 17, it hopes to ship 6 million PS3s worldwide by the end of Q1 2007.

“There’s no question there will be people who just play games (on PS3), but I think there’s no question you’ll have people who just play movies on it,” adds Lionsgate G.M. Ron Schwartz.

And starting Nov. 21, for owners of the rival Xbox 360 game machine, Microsoft will offer a $199 add-on drive that plays HD DVDs.

Rumors persist that Microsoft — hoping to have 15 million consoles sold by next June — will announce a version of the Xbox 360 with a built-in HD DVD drive at January’s Consumer Electronics Show.

Get more titles on store shelves

HD DVD supporters will have some 150 movies out by year’s end, while Blu-ray’s studios expect nearly 100 titles.

Meanwhile, day-and-date release with standard DVD is part of the program for summer blockbusters like Paramount’s “Mission: Impossible III,” Warner’s “Superman Returns” and Sony’s “Talladega Nights.”

The release of more so-called “hybrid” discs — those that combine HD DVD or Blu-ray with standard def — could

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