High-definition battle heats up
The high-def homevid battle heated up again Tuesday when Rupert Murdoch and Robert Iger gave surprisingly strong endorsements to Sony’s Blu-ray format before a crowd of Wall Streeters. News Corp. chief Murdoch leveled the charge that Paramount/DreamWorks Animation received a payout to make the switch to Toshiba’s HD DVD format.
Murdoch, speaking at the Goldman Sachs confab in Gotham, became the first top exec to publicly make the accusation that HD DVD backer Toshiba had essentially bought Par’s support.
“Paramount switched out the other day. God knows why,” Murdoch said.
But then he said, essentially, that he did know why — a $100 million payout to DreamWorks Animation and a $50 million check to Par.
In August, Par abruptly decided to support only HD DVD for the next wave of Par and DWA tentpoles it is releasing, including “Shrek the Third,” “Blades of Glory” and “Transformers.” Reports at the time said a payout of $150 million, nominally for marketing support, accounted for the move.
Asked about a payout at a later session, Viacom CEO Philippe Dauman didn’t deny the allegation. “I won’t comment on that number,” he said.
Instead, he noted that supporting both formats “creates some inherent inefficiencies, and we would like to see the HD format have success.”
The creation of two separate formats — with Sony’s critically lauded but pricier Blu-ray battling it out against Toshiba’s sparer but less expensive HD — has roiled Hollywood from the start. Fox, Sony and Disney opted to support Blu-ray exclusively, Universal chose HD, and Warners and Par went the ecumenical route and supported both.
But Par made a sudden switch in late August; at the time, it didn’t acknowledge a payment but pointed to “an extensive evaluation of current market offerings which confirmed the clear benefits of HD DVD.”
On Tuesday, both Murdoch and Disney topper Iger offered strong words of support for the Sony format.
“We believe it’s a no-brainer that the industry should be behind Blu-ray,” Iger said. At a lunch panel, Iger offered veiled criticism of the Viacom move. “We haven’t taken any money (to choose Blu-ray) because we think it’s far and away the best business,” Iger said.
Murdoch concurred. “The public is going to want Blu-ray. The public can tell the difference,” he said.
Warners, which continues to support both, has been less vocal; Time Warner CEO Richard Parsons said at a sesh later in the day that it is still too early to predict which side will win.
“The consumer doesn’t care about the format. It’s linear penetration that counts,” Parsons said. “Our objective is not to take sides on the format but to do what we need to do to get maximum penetration.”
While sales of Blu-ray discs have outpaced sales of HD DVD by most accounts, a new survey by research group NPD found that 29% of consumers were aware of HD DVD, compared to 20% for Blu-ray, and that consumers are enticed by the former’s lower cost.
Still, execs who have chosen to support Blu-ray sounded a confident note. Said Iger: “It’s disappointing that the industry hasn’t managed to be cohesive. I think it’s a foregone conclusion about which will win.”
(Dade Hayes contributed to this report.)