Universal, HD DVD Not Throwing In Towel Yet

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.

Paul's picture

I asked this in your last blog as well, but given this is even more specific to Universal I guess I'll throw it out there again. I was watching Universal-HD the other night and there was a lengthy Blu-Ray ad during the commercial break. I don't usually watch U-HD so I wasn't sure if these have been shown for a while, or if it could be a sign of something. Any thoughts on it?

Shane's picture

I don't think it does. I doubt that's something strategic- it's probably a completely different part of the company.

Scott's picture

Perhaps just as important to either format, if they fight much longer, will they be relevant. I believe Apple announced, at Macworld, that they had sold 7 million movies, to-date. I also believe this is more than either Blu-Ray or HD-DVD, to-date. Apple had fewer studios to draw on, yet this was accomplished in a shorter time period. Now Apple has a rental model and it will include an HD option. Other players have/are moving into the movie download arena. This has got to make the hardware companies nervous. It also may make the cable and broadcast industry nervous. It could move us very close to the pay as you go, al a carte model. I see a day, not too far out, when I can buy a $200 box, hook it up to my TV, buy or rent music/movies/TV shows/Podcasts/sports/etc., as I desire and without commercials. At a typical, non-premium cable bill of $50 monthly, paying $1-$4 per event would cover a lot of viewing for the same price. Maybe this is why some cable internet providers are looking to limit bandwidth.

Rich's picture

After Warner's announcement, I purchased a Panasnonic Blu Ray player for around $280. The player also included 5 free movies-including Pirates II and III-about $125.00 worth of movies-not a bad deal overall. All I can say is the picture quality looks stunning on my Pioneer Kuro 5080HD plasma set and I enjoy the improved sound quality of uncompressed formats such as PCM 5.1. Sure, there will be folks who don't care about quality who will use I-Tunes or other online sources to purchase or rent movies-but there also will be those of us will prefer the disc format due to its higher quality compared to internet HD streams or downloads were connection speed, file size, bandwith, and needing multiple HT PCs to watch on different sets in your house come into play. How many folks even have a HT PC connected to the big screen in their house? Where would you rather watch a movie-on your big screen or small computer or laptop screen. I still believe internet based movies hold the most promise for on the go vi

Claude's picture

Shane - It looks worse and worse for HD DVD as the days go by. Blu-Ray HW sales are up as well as SW. Both Paramount and Universal will jump sooner or later to chase the money trail.

70sam54's picture

This sounds just like what I stated in my past comments. There is no sub for the content quality of the hd dvd format. And yes I will support it in the future. With this announcement all those who wanted to try either one of these formats can dive in without the fear of losing something. No one in this hobby have had only one format of anything. Lps,Cds,Lds, can you see where I am going with this? And yes I still have my hd dvd A1 player updated and playing all hd titles and going to their website and downloading some cool stuff. Please try this all you blu ray owners. I'm looking forward to the new movies coming out. I went to the theathers to see both. Good stuff. THANKS TO UNIVERSAL FOR HAVING GUTS TO STEP UP AND CLEAR SOME MUDDY HD FORMAT WATERS. HAVE A GOOD DAY!

Joe Nowak's picture

It's Just like the VHS vs. Beta wars of the 90's. JVC threatened to pull the VHS licences of those companies who continued to manufacture Beta machines. Something that would have been illegal here in the U.S. under our anti-trust laws, but fully legal in Japan. Of course the supporters (insert Toshiba) supplied Universal with cold hard cash for Universal to go strictly HD DVD. It's not quality they care about... it's bribe money! However Sony has an ace up its sleeve... It's called the Playstation 3... which has sold millions since its introduction... a combination next generation game machine w/blu ray dvd player.

Water Damage's picture

Technology is happening and then changing so fast, it is really difficult for some of us older people to keep up. By the time we figure out what a new item does, it has already been replaced by something else. Thank goodness I have my kids to keep me up to speed! Interesting reading though on a subject that I knew little about!http://www.the-restoration-express.com

Jeff's picture

It's funny to read this almost a year later and see what really happened. You have to ask yourself what would have happened if Warner chose the other format. I really do believe things might have been different.