Studios go Blu as high-def format war ends

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UPDATED 8:06 p.m. PT Feb. 19


In the wake of Toshiba's formal surrender in the next-gen DVD format war, Universal Studios Home Entertainment said Tuesday that it will begin releasing titles on Blu-ray Disc.

Fellow HD DVD backers Paramount Home Entertainment and DreamWorks are expected to follow suit.

Toshiba confirmed Tuesday that it will discontinue developing, manufacturing and marketing HD DVD players and recorders. The announcement ends a two-year battle with Blu-ray Disc to succeed DVD.

"We carefully assessed the long-term impact of continuing the so-called 'next-generation format war' and concluded that a swift decision will best help the market develop," said Atsutoshi Nishida, president and CEO of Toshiba. "While we are disappointed for the company and, more importantly, for the consumer, the real mass-market opportunity for high-definition content remains untapped, and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality."

He added that Toshiba has no plans at this time to adopt Blu-ray.

Toshiba will stop shipments of HD DVD players and recorders by March and will end production of HD DVD drives for computers as well. The company added that it will continue to provide product support and services for current HD DVD owners.

"Toshiba also intends to maintain collaborative relations with the companies who joined with Toshiba in working to build up the HD DVD market, including Universal Studios, Paramount Pictures and DreamWorks Animation, and major Japanese and European content providers on the entertainment side as well as leaders in the IT industry, including Microsoft, Intel and HP," the company said.

"Toshiba will study possible collaboration with these companies for future business opportunities, utilizing the many assets generated through the development of HD DVD."

Within hours of Toshiba's announcement, Universal Studios Home Entertainment president Craig Kornblau said his studio will join the Blu-ray camp.

"While Universal values the close partnership we have shared with Toshiba, it is time to turn our focus to releasing new and catalog titles on Blu-ray," Kornblau said. "The path for widespread adoption of the next-generation platform has finally become clear. ... The emergence of a single high-definition format is cause for consumers, as well as the entire entertainment industry, to celebrate."

Paramount and DreamWorks Animation, which abandoned their dual-format strategy in the fall and began releasing titles exclusively in HD DVD, are expected to rejoin the Blu-ray side as well.

Both Universal and Paramount have titles announced for HD DVD in the coming months. Universal's "American Gangster" came out Tuesday on DVD and HD DVD. The status of those releases is unknown; sources said titles already manufactured likely will come out on HD DVD as planned, while the studios ramp up their Blu-ray operations.



Warner Home Video, which went exclusively Blu-ray in January, had planned on ending its HD DVD releases in May and has several titles in the pipeline. Warner executives were not available for comment at press time.

Andy Parsons, senior vp of Pioneer Electronics who doubles as chairman of the Blu-ray Disc Assn.'s U.S. Promotions Committee, lauded Toshiba's decision to pull the plug on HD DVD.

"We in the Blu-ray Disc Assn. are very happy that this long format war is officially over," he said. "Now the task ahead for our member companies is to promote Blu-ray Disc as the best way to bring premier quality high-definition content into consumers' lives."

Retailers also expressed relief following Toshiba's decision.

Noah Herschman, director of audio and video at Amazon.com, said that while HD DVD players were among the retailer's best sellers during the holidays, its death will make things easier on customers.

"We believe both of them were viable high-def formats for people with HDTVs," he said. "Now that there is one format, we hope consumers embrace that."

However, he added, prices for Blu-ray players are too high for some consumers, and they have been in short supply compared with HD DVD. He said Amazon.com will continue to carry HD DVD until "they're no longer made."

"We still have a lot of customers who have purchased HD DVD players, and we want to accommodate them," Herschman said.

Best Buy spokesman Brian Lucas said the retailer's decision on when to stop selling HD DVD products will be dictated by consumer demand. However, "at a certain point we'll start pulling them from shelves," he said.

"From the beginning we thought the format war was not good for anyone, not good for any retailer," he said. "But (a single format) is great for consumers."

Bo Andersen, president of the Entertainment Merchants Assn., said Blu-ray's victory is a relief for everyone in the industry.

"The marketplace has spoken," he said. "It is time that consumers hear the message."

Thomas K. Arnold and Erik Gruenwedel contributed to this report.
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