Aug 21 2007

Paramount is stupid

There's been a hell of a lot of analysis of the fact that Paramount (known mostly for its Scientology films) and Dreamworks Animation (motto: we made Shrek, and a bunch of other shit...but, hey, SHREK!) have dropped Blu-ray for HD DVD exclusively. They join the one single other studio which is doing so, Universal. Let me add my bullshit analysis to the fray.

If I'm the head of a studio, trying to make a sound financial decision about two different formats of disc (which I have no idea about technically, aside from one is "blue" and the other is "hd"), how do I decide between the two? Well, Paramount had been releasing on both formats, and their blu-ray versions were outselling their hd-dvd versions by 2:1, according to most retail tracking estimates. The blu-ray players have similar market penetration advantage, due to exclusive support of Target and the considerable number of PS3s out there (including in our house). Blu-ray has the exclusive support of Fox (Star Wars), Sony Pictures (Spider-man), and Disney (Finding Nemo). Also, the titles themselves are $5-10 dollars cheaper for blu-ray discs vs HD DVD discs. So, the decision is easy: HD DVD!

Wait, what?

Idiot Michael Bay, who directed the entirely unnecessary "The Island" and "Transformers" posted on his website that he was pissed about it. Of course, the next day he had a change of heart. Why? Because, he says, the HD DVD players will be $200 by Christmas, and that's the magic price that consumers will start buying at.

This is wrong. Actually, people who want HD discs are people who own TVs that display higher resolution than 480i, which are the same people that really don't mind paying $500 for a box, given that they already spent at least $2000 on a tv, $300-500 on a stereo surround system, etc. HD DVD set top boxes are already half the price of blu-ray players, and yet people aren't buying them. Demand for HD DVD is so low that Blockbuster has stated that they will stop buying new HD DVD titles because people just don't want them.

The move by Paramount is very bad for consumers, no doubt. There are a lot of people saying that it was a cynical move by Microsoft, who paid the two studios $100 million cash to switch sides. The idea being that prolonging a format war, which was nearing a conclusion, would reduce overall demand for BOTH formats so that the new standard will be downloadable HD videos. While this may have been their true objective, the outcome they are gunning for is highly unlikely.

HD DVD discs hold 30 GB, and Blu-ray 50 GB. That's a VERY hefty download for most people's connections. Netflix can get a blu-ray disc to me in 1 day, for a bandwidth of 4629 kbps. Yes, some people have that kind of bandwidth at home (not many), but likely wouldn't relish it being maxed out for 24 hours. Forgetting about streaming this kind of content, this isn't even nearly practical for a model in which a person orders a movie and then waits a day while it downloads.

I predict that blu-ray will maintain dominance. Whether or not the formats succeed is another manner. I am enjoying blu-ray releases on my PS3; I just wish I was going to be able to see Borne Ultimatum in good quality when it comes out. Perhaps I will some day, after this absurd format war is over. Without outsider meddling, it would already be over, with market forces selecting blu-ray. Good ol' Microsoft.