SHANE BUETTNER BLOG

Late last week I had a chance to speak directly with Ken Graffeo, who has a high ranking position with Universal Home Entertainment and is co-president the HD DVD Promotional group. Ken and the group wished to clear the air on the running rumor mills and talk about Universal and HD DVD's plans in the post-Warner decision world.

We covered a lot of ground in this conversation, but first and foremost Ken wanted to make clear that it's far too early to start making decisions about Universal dropping HD DVD support or even adding Blu-ray support. Toshiba is stepping up with an aggressive marketing campaign with even lower player prices, and there are some HD DVD exclusive high profile new release titles coming up in this first quarter, including Universal's own American Gangster and Paramount's Beowulf.

Graffeo essentially said that Universal currently "has no plans for dual-format" and as long as Toshiba is not only selling players but spending money aggressively to market them, Universal is taking a wait and see approach before deciding it's really curtains for HD DVD.

Further, according to Graffeo, the message from retailers at CES was business as usual so far as supporting both HD DVD and Blu-ray are concerned.

Graffeo said there is no time line for a Universal decision, and at least at this point doesn't regard June 1st, the date after which Warner will no longer be supporting HD DVD, as an imposed deadline.

Graffeo repeated that HD DVD and Universal will go where the consumers are. These next several weeks will be interesting to watch. While there was certainly a dearth of new release HD DVD titles in the time surrounding Warner's big decision, I was floored by the apparent, immediate impact in software sales the week after Warner's announcement, which tilted to 85% for Blu-ray against just 15% for HD DVD. Additionally, while we've not seen any major announcements from the Best Buys or Wal-Marts of the world, Video Business has reported that some retailers are pushing Blu-ray front and center and pushing HD DVD aside.

It will be also interesting to see if Toshiba can maintain or increase the momentum it gained in the fourth quarter of 2007 with hardware sales. And even if it does, will it matter if none of the other Blu-ray studios defect or Warner doesn't re-think its current stance? Will retailer support remain past the sales on existing inventory? Will consumers buy even $150 players to play high-def movies from two studios?

These questions will be answered in the coming weeks or perhaps months as the sales figures come out. But in the meantime, HD DVD doesn't yet believe that this format war is settled.