Pressure mounts on U to turn Blu

Blu-ray selling twice as many titles as HD DVD

While it certainly didn’t help the HD DVD camp, Blockbuster’s announcement last month that it will exclusively support rival Blu-ray in 1,700 of its stores probably won’t do much to end the high-definition disc format battle.

No major retailer seems intent on abandoning HD DVD right now, even though its titles are being outsold by Blu-ray at a ratio of about 2-to-1, according to numerous estimates.

“I don’t see any resolution (to the format battle) coming until at least the end of the year,” Envisioneering Group tech guru Richard Doherty says.

However, that projection could change quickly, he adds, if Universal — the only major not supporting Blu-ray — were to suddenly adopt the same dual-format approach as Warner and Paramount.

Universal officials haven’t revealed anything at this point that would hint of a change in their exclusive allegiance to HD DVD.

But if U did agree to release all or part of its high-def catalog on Blu-ray, “that could shift the dynamics (of the format war) overnight,” Doherty says.

Consumers who had been waiting on the sidelines for assurance that the purchase of a $499 Sony Blu-ray drive would give them access to play Blu-ray movies from every major supplier would suddenly pony up.

“So much consumer interest would open up this summer and fall that every studio would be smiling and wondering why they’ve been jousting all this time,” he notes. “Universal may continue to place its bets (on HD DVD). But if you want revenue, you put out what consumers want. And right now consumers want Blu-ray.”

So what would make U change its mind?

“We understand there is a lot of persuading going on right now,” notes Doherty, who explains that as U execs make their summer travels to destinations including investment banker Herb Allen’s Sun Valley media confab, counterparts on the Blu-ray side are likely saying, ‘OK, let’s talk.'”

For their part, U officials continue to dismiss the notion that Blu-ray has a significant market advantage, with Ken Graffeo, executive VP of HD strategic marketing for Universal Studios Home Entertainment, noting that Toshiba’s HD DVD players have a 70% share of the set-top market right now (most of Blu-ray’s traction has come from drives built into Sony PlayStation 3 game consoles).

He adds that the overall high-def disc market is still too underdeveloped for U — which has spent a lot of money and time developing HD DVD bonus features — to consider a Blu-ray shift.

“We’re still at such an early stage that it’s hard to gauge how (selling Blu-ray, too) would have any impact,” Graffeo says. “When you sell 6 million standard-definition units of a title, and you’re selling only about 70,000 in hi-def, it’s hard to say, ‘Wow, look at what we’re leaving on the table.’ ”

Still, more than a year after both technologies were introduced, and with victory prognostications — at least early on — favoring Blu-ray, U could be pressured by factors other than consumer sales and the pushings of rival execs in Sun Valley.

“If I’m a filmmaker, and I’m going to make a movie that’s going to make half of its money in home entertainment, would I want to make it at Universal, and be with the wrong format?” Doherty wonders.

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