Even with the tide apparently
shifting in Blu-ray Disc’s favor, the HD DVD camp isn’t about to relent in the
on-going high-definition format war. HD DVD still commands a significant
portion of exclusive content and the most affordable hardware, giving the
format a fighting chance – and nobody believes in HD DVD more than Universal
Studios executive vice president Ken Graffeo, who also serves as the
co-president of the HD DVD Promotional Group.
The HD DVD Group was rather mum on
Warner’s surprise announcement right before CES to go Blu-ray Disc exclusive
and cancelled its Sunday press conference. Graffeo, speaking to BetaNews, explains, “We heard about the
whole move when everyone else did – when a lot of us were on planes flying to
CES in Las Vegas ... If we had our press event on Monday, it would have been
different, but because it was right there on Sunday and we heard Friday
afternoon we couldn't even get to everybody ... The entire flow of the
presentation would have had to been changed. When we found out at the last
minute, we had to regroup and say ‘Toshiba, what are you doing?’ and we didn't
have any answers.”
With HD DVD losing movie releases
from Warner Bros. starting June, the HD DVD landscape could change drastically
– something that the Promotional Group doesn’t yet have an answer for. “To be
very honest with you, we have not addressed that yet,” Graffeo admitted.
“Warner is still releasing HD DVD titles up until May. Warner has always been
in two formats, and prior to Paramount's switch, they had been in two formats,
so now that Warner is exclusive... we just haven't addressed it yet.”
One of the first rumors from Daily
Variety to hit following Warner’s move was that Universal and Paramount
were both poised to make the switch to Blu-ray Disc, but
Graffeo refutes such reports. “I want to say that none of those rumors were
substantiated. Nobody ever talked to us. I know nobody talked to Paramount ...
This is business as usual for us and there are no plans to make any changes.”
One part of HD DVD’s new strategy is
on lower prices and selling the hardware’s ability to upscale regular DVD movies.
Graffeo explained the logic behind the new push, “Consumers right now are
buying upconverting players – they are outselling the next-gen players combined
by 10 to 1 every month. They are affordable because they are under $200 – the
average price is $85 – and consumers want to see their movies better. So
pricing is very important.”
As part of Toshiba’s new promotional
plan, HD DVD hardware across the board dropped in price. Introduced on January 13, the price of the entry-model HD-A3 is
$149.99, the HD-A30, with 1080p output, $199.99, and the high-end HD-A35,
$299.99. Graffeo, along with the entire HD DVD Group, hopes that the
entry-level HD-A3 will entice a whole new group of consumers.
“We saw that on DVD: as soon as
price point went under $200 and as soon as it started getting close to $100
players really started taking off because you're hitting very consumer-friendly
prices,” he said. “If you want to hit the mass market, you have to be
consumer-friendly in price. If you want to be a niche electronic, you're going
to be high priced.”
It is the HD DVD Promotional Group’s
belief and hope that sales of its players and software will grow exponentially
as the mainstream consumer experiences high-definition movies. “1 million units
starts word of mouth – people get exposed, people see it. When you're dealing
with 200,000, you're at the early adopters and that's not really going to
spread.”
Even with the latest sales numbers
leaning in Blu-ray Disc’s favor, the overall high-definition market is still
insignificant compared to standard DVD sales. According to Graffeo, 35 percent
of households have HDTVs, but only 12 percent receive HD programming, and an
even smaller percentage have a high-definition movie player. For this reason,
Graffeo feels that HD DVD still has a lot of potential.
The Group most recently announced
that it has sold over 750,000 HD DVD players total just after
Thanksgiving shopping week. With holiday sales added, current day numbers could
be near 1 million, giving Graffeo a reason to expect a spike in HD DVD uptake.
“That's why HDTVs finally started
taking off, because consumers walked into their neighbors' houses and said
‘Look at that flat thing on the wall,’ that's great. You saw in November and
December, everyone was aggressive with pricing. You could see how consumers are
willing to buy HD movies when you get to an affordable price,” he said. “Most
people are very happy with their DVD, but when they see a 1080p movie, it blows
them away.”