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HD DVD camp stands by format

Toshiba says backers haven't wavered despite Warner Bros.' choice of Blu-ray. But Paramount may be reconsidering.

January 09, 2008|Dawn C. Chmielewski and Claudia Eller | Times Staff Writers

LAS VEGAS — Had pundits bet on the HD DVD camp folding its hand in Las Vegas, they would have lost their shirts.

None of the corporate giants that back the next-generation DVD format have jumped ship at the Consumer Electronics Show here. But the huge momentum shift toward the Blu-ray format has at least one studio strongly considering a switch.

Warner Bros.' decision last week to start making movies exclusively for Blu-ray players, rather than HD DVD, triggered an "out" clause in Paramount Pictures' contract with the HD DVD camp. An industry source said there was a significant possibility that Paramount would exercise that clause. It plans to decide within a month.

Paramount officials said they would continue to support HD DVD, a format for displaying videos in higher quality whose backers include Toshiba Corp. and Microsoft Corp. Universal Pictures, which has been a strong supporter from the beginning, issued no public statement on the matter here.

Toshiba said Tuesday that retailers have expressed their commitment to HD DVD during private meetings at the show, which is the world's largest consumer tech gathering.

Still, the Warner Bros. move -- announced just before the show began -- dramatically changed the balance of power in the competition to set the new DVD standard.

The Blu-ray contingent, led by Sony Corp., all but claimed victory before a standing-room-only presentation Monday, saying: "The Future Is Blu."

The Blu-ray Disc Assn. claimed a significant edge over HD DVD, with 85% of all next-generation players purchased since Blu-ray hit the market late in 2006. The group also said 66% of all high-definition movies sold in 2007 were Blu-ray.

Danny Kaye, 20th Century Fox Home Entertainment's executive vice president of technology strategy, predicted that Blu-ray players -- including Sony PlayStation 3 game consoles, which also play movies in the format -- would jump from 3.5 million sold by the end of 2007 to 10 million by the end of this year. He forecast a similar surge in movie sales, from $170 million to $1 billion in consumer spending.

Kaye said 2008 would be "a year of very strong, explosive growth."

Steve Beeks, president of Blu-ray supporter Lions Gate, said that after two years of "wasted energy" devoted to the bruising format war, the industry could begin to focus its efforts on expanding the home entertainment market.

"We believe 2008 will be a watershed year for Blu-ray's ascent in the marketplace," Beeks said.

That enthusiasm appears to be shared by the show's attendees, who flocked to the numerous Blu-ray displays on the show floor. The numbers were noticeably thinner at similar HD DVD displays.

Jodi Sally, vice president of marketing for Toshiba America's digital audio video group, emphasized the continued retail support for its HD DVD format, which has sold more 1 million players since its introduction.

"I've been here for two days of back-to-back meetings with retailers," Sally said. "We are really encouraged by our meetings and the response of retailers that they will continue to offer consumers a choice."

Industry executives said it would be unusual for retailers to abandon any format so soon after Christmas, for fear of sparking a flood of returns.

Here's a roundup of other news and observations from the convention:

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Even gadgets for the pacifier set

Gadgets for grown-ups may be chock-a-block at CES, but the electronics market for the juice-box set is expanding fast. Sales of so-called youth electronics grew 22% in 2006, contributing $1 billion to the $22-billion U.S. toy market that year, according to market research firm NPD.

Some gizmos target children even before they can walk, such as the V-Smile Baby Infant Development System, a push-button lap console for tots.

Because Junior is unlikely to have a credit card, gadget makers don't worry about marketing to him; they pitch their products to parents by boasting that the products can turn kids into the next Stephen Hawking. Yet many have no scientific basis for making these claims, according to a report released Tuesday by the Sesame Workshop's Joan Ganz Cooney Center.

Of the 300 video games released in 2007 as "edutainment" titles, only 69 contained any educational value, according to the report. Just two were based on any type of curriculum, such as math, science or literacy.

Unless the endless beeps and songs drive parents nuts, they don't necessarily have to chuck these gizmos because children learn from them in other ways.

"Technology is another material for children to actively explore," Warren Buckleitner, editor of Children's Technology Review, said during a talk at the Sandbox Summit here.

The event, put on by the Parents' Choice Foundation, explored the question of what kids are doing with technology and what they're getting out of it.

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