Lieberfarb lobs charges at Blu-ray

Says rival high-def format’s less open than HD DVD

By Paul Sweeting -- Video Business, 9/20/2005

SEPT. 20 | LOS ANGELES--The war of words between camps supporting rival formats for high-definition discs escalated further Monday, as former Warner Home Video president Warren Lieberfarb accused the Blu-ray Disc Assn. of undermining open technology standards of the sort employed successfully with DVD.

Speaking at the Digital Hollywood Forum here, Lieberfarb—who now is a consultant to Toshiba, the principal developer of the rival HD DVD format—effectively claimed leading Blu-ray companies are acting anti-competitively in dealings with the main cross-industry standards group for DVD.

“The $64,000 question is, how were three companies able to veto the work of the DVD Forum while also forming the Blu-ray Disc Assn.,” Lieberfarb said during a nearly hour-long address. “I urge all of you, when you’re lying in bed one night and can’t sleep, to obtain a document from the Government Printing Office called ‘U.S. Anti-trust Policy for High-Technology Industries.’ It makes fascinating reading.”

Lieberfarb didn’t name the companies, but his barb clearly was aimed at Sony, Philips and Panasonic, all of which have representatives on the steering committee of the DVD Forum and are the principal developers of Blu-ray technology. In 2002, several Blu-ray companies used DVD Forum votes to block the industry-wide consortium from endorsing HD DVD, the main rival to Blu-ray for high-def supremacy.

Throughout his speech, Lieberfarb accused the Blu-ray Assn. of ignoring or subverting broad industry interests by pushing a closed, proprietary technology.

“In 2002, the studios produced a wish-list of features and characteristics that the new format should have that was agreed to by all studios without exception,” he said. “Near the top of the list was a single format, administered with a single cross-industry body. Today we have two formats and two separate administrative bodies.”

Lieberfarb, who was instrumental in developing the current DVD standard, also did his best to raise doubts about the suitability of Blu-ray technology for a home entertainment format.

“Blu-ray requires 100% recapitalization of the entire manufacturing, authoring and mastering system without a proven product that has any more capacity than HD DVD,” he said. “HD DVD is indisputably the lowest cost solution and has 100% proven-process capability.”

As an extension of current DVD technology, HD DVD discs can be mastered and manufactured using the same equipment and infrastructure as standard-def discs.

Blu-ray discs rely on a different technical strategy for storing data, which its developers argue will produce greater storage capacity than HD DVD. But Blu-ray discs likely won’t be capable of being manufactured in efficient volumes in the first year or two after introduction.

Lieberfarb also criticized his former colleagues at Warner and other studios for not forcing the technology developers to settle on a single standard.

“The decision on whether we have a format war is really in the hands of the studios,” he said. “Hopefully the studios will look at the issue pragmatically and come to the right solution.”

Lieberfarb appeared at a session sponsored by the DVD Forum.

In a later session, Warner Home Video senior VP Steve Nickerson said the studios were at risk of throwing away much of their gains from DVD if they don’t offer consumers a compelling high-def DVD format.

“In 1997, the year DVD was introduced, consumers spent a combined $24 billion over five release windows for movies; in 2004, they spent $40 billion,” Nickerson said. “Almost all of that increase was the result of DVD sell-through.”

But the consumer purchase habit is relatively new and could easily be eroded, he added.

“Consumers will be looking for high-def programming,” the Warner exec said. “If we don’t give them a packaged media option, we are at risk of taking the relatively new purchasing habit and trading out for something else that might not produce the kind of growth we’ve enjoyed from DVD.”