Hollywood faces an issue after a question about DVD formats

During an
annual meeting consisting of Hollywood studio executives and several hundred
industry managers, a moderator asked a question if the studios could break the
deadlock between the
Blu-ray and HD DVD camps.
  Unfortunately for Hollywood this was not a question that could be easily answered and when Thomas Lensiki, president of home entertainment at Paramount Pictures mentioned it about it being counterproductive while both sides are still negotiating, this caused silence for a moment between the executives. 

While having totally incompatible formats may seem bad enough for the movie industry, having 39% of the studios only back the Blu-ray camp and another 43% only back the HD DVD camp makes matters worse.  As a result, no matter which format the consumer chooses, they still lose out, unless all the studios back both formats.  So far, 18% of the market has yet to decide on one or the other.  For Hollywood, this means potential sales of 10’s of billions of dollars are stuck between the two formats until something can be done.

Even though many consumers are looking forward to HD content, retailers and studio chiefs expect consumers to shy away from the next generation players in fear that their expensive purchase could become obsolete fairly quickly.  The bridge between the two may end up being when the manufacturers decide to develop players that play both Blu-ray and HD DVD discs.  As both sides have heavily invested in their technology, neither side is easily going to give up on their format.

The Hollywood studio executives who gathered here at an annual home entertainment summit meeting last month were all chuckles and backslaps. In front of several hundred industry managers, analysts and reporters, they talked breezily about hit movies, DVD sales and prospects for the holiday season.
Then, with a few minutes left, the moderator asked the question everyone had been waiting for: Can the studios break the deadlock between the rival camps developing the next generation of digital videodiscs, players and recorders?
The question was not academic. Hollywood has been unable to decide between two new formats, Blu-ray and HD DVD. Tens of billions of dollars in potential sales hang in the balance.
Before anyone could answer, Thomas Lesinski, president of home entertainment at Paramount Pictures, jumped in and said it would be “counterproductive” to discuss the issue while negotiations were going on behind the scenes. Stunned by the response, the audience responded with nervous laughter, and the other executives fell silent.

The full article can be read here.  Some more info can be read on this EarthTimes article.

I came across a few people who can clearly see what is going to happen:  Unless either all the studios back both formats or dual format players hit the market, players and matching discs are going to be sitting on the shelves until a consumer can get a player knowing that they can play all the latest titles on the new format. 

Feel free to discuss about Blu-ray and HD DVD on our Satellite, HD-TV, Blu-ray and HD-DVD Forum.

Source: Herald Tribune – Business