Blu crew parties as rival retreats

Sony, backers all but declare victory in format war

What was supposed to be a showdown between the rival high-definition disc formats at the Consumer Electronics Show here turned into something of a victory celebration by the Blu-ray Disc camp.

Stung by last week's announcement that Warner Home Video, the biggest home entertainment player in Hollywood, was dumping HD DVD, backers of the Toshiba-championed next-generation format abruptly canceled a Sunday night gala at which they were to trumpet upcoming HD DVD releases and preview the latest innovations in special features.

As a result, supporters of the Sony-developed Blu-ray Disc seized the moment to proclaim victory and all but pronounce the format war over.

At Sony Electronics' preshow CES presentation Sunday, Sony Corp. chairman and CEO Howard Stringer could barely contain his glee.

"As you can probably guess, all of us at Sony are feeling Blu today," Stringer said to laughter. "And that's a good feeling."

Stringer thanked Time Warner CEO Jeff Bewkes and chairman Barry Meyer for making what he called the best decision in the long term for the consumer. He also gave kudos to longtime Blu-ray supporters Robert Iger of Disney and Rupert Murdoch and Peter Chernin of Fox parent News Corp., along with Lionsgate and MGM.

"I don't know if that's the reason for the full house, and I'm sure you want me to say more," Stringer said. "But I won't."

David Bishop, worldwide president of Sony Pictures Home Entertainment, said Warner's decision would help change Sony's focus.

"Now our message to the consumer will be (about) converting from DVD to Blu-ray and not this message … that has basically been that our format is better than their format," Bishop said.

He said Sony and other studios won't abandon current Blu-ray marketing tactics, which he said include educating consumers and retailers.

"The marketing message now will be more about how the consumer moved from VHS to DVD and that it is now time to move to Blu-ray," he said. "We can do that with a lot more confidence and the consumer can have a lot more confidence than they had a week ago."

Later that night, a Blu-ray Disc party that had been hastily assembled and slotted for the same time as the HD DVD gala drew a standing-room-only crowd.

Left with just two of the six major studios, the HD DVD side remained defiant, with Toshiba vp marketing Jodi Sally saying at the company's CES press conference: "This is a tough day for me. (But) we firmly believe HD DVD is the best format for the consumer." She noted that while press reports have all but declared the format war over, "We have been declared dead before."

Citing third-party data from the NPD Group, Sally said HD DVD players represented more than 49% HD players sold up through Dec. 22. The NPD Group numbers apparently don't include sales of the Sony PlayStation 3 console, which features a Blu-ray drive.

Akio Ozaka, head of Toshiba America Consumer Products, said the company was surprised by Warner's announcement.

"We were particularly disappointed that the decision was made in spite of the significant momentum HD DVD has gained," Ozaka said.

He said HD DVD player sales had their best sales ever in the fourth quarter.