High-definition format war goes global
PS3 launches in Europe as camps add titles, marketing
By Jennifer Netherby -- Video Business, 3/16/2007
See all the upcoming titles on both HD DVD and Blu-ray.
MARCH 16 | As the battle between high-definition DVD formats nears the start of its second year in the U.S., it's only beginning in the rest of the world.
On March 23, Sony is set to launch the PlayStation 3 in Europe and Australia, which Blu-ray Disc backers are hoping will shift high-def disc sales in their favor as it has in the U.S.
In Japan, home to both Blu-ray-backing Sony and HD DVD-backing Toshiba, the war is weighted heavily toward Blu-ray. Both formats are just now being introduced in other territories around the world.
The situation in Europe is almost a rearview mirror to the U.S. launch. HD DVD players began reaching market there in late December/early January, and so far, sales have swayed 80% in the format's favor, according to U.K. video research firm Screen Digest. HD DVD backers Toshiba and Microsoft have aggressively courted independent European suppliers, which has bulked up the format's release slate in the region, providing more content than in the U.S.
But Blu-ray still has more major studio content and a powerful slate of new releases and catalog films headed out in the next couple months, including Sony Pictures Home Entertainment's Casino Royale and Buena Vista Home Entertainment's Pirates of the Caribbean: Dead Man's Chest.
Hardware factor
Hardware sales have so far been small. In 2006, just 3,000 stand-alone HD DVD and Blu-ray players combined were sold in Europe, according to Screen Digest. More popular than the set-top boxes was Microsoft's Xbox HD DVD add-on drive, with sales of fewer than 15,000 units last year.
The hardware picture will change March 23 when the PlayStation 3 gets its European debut, with Sony shipping 1 million units on day one.
"There's no question the PlayStation 3 will outsell everything else by a degree of magnitude," Screen Digest senior analyst Helen Davis Jayalath said, adding that both sides have known this day was coming and it doesn't necessarily signal the end. During tech show CeBIT in Hanover, Germany, on March 15, the Blu-ray Disc Assn.'s European chair Frank Simonis predicted not only would Blu-ray win the format war there but would kill DVD in three years.
Sony is hoping to boost game players' interest in watching movies on the PS3 by offering a free Blu-ray disc of Casino Royale to the first 500,000 PS3 buyers who register online, similar to its inclusion of Talladega Nights: The Ballad of Ricky Bobby with the first half-million U.S. players. Sony execs say 80% of U.S. users who received the free movie said they were more interested in watching movies on the console.
Lexine Wong, SPHE senior executive VP of worldwide marketing, said there could be even more demand for movies in Europe because there isn't as much high-def content available on TV.
"The excitement for us is there's going to be all these HDTV consumers who are waiting for high-def content, which is our movies," she said.
The PlayStation 3 comes with a 599 euro (about U.S. $790) price tag in Europe, but Blu-ray backers don't expect that to deter sales.
"In Europe, there will be a million units for sale on March 23, which is much more than in the U.S.," Simonis told VB via e-mail.
Blu-ray-backing studios are betting on the PS3's popularity to drive adoption and are following its debut in different regions of the world with software releases.
Outside of the U.S., Europe and Japan, Sony has released Blu-ray software in Korea, Hong Kong, Mexico and Dubai, and is now moving into Russia, Wong said.
Sony reiterated at CeBIT its plans to sell through 6 million PS3s worldwide by the end of March, which would put Blu-ray penetration worldwide far ahead of HD DVD, which is predicted to sell through 2.5 million players this year, according to backers.
HD DVD's push
A number of other factors could help boost HD DVD penetration, including cheap HD DVD players from Chinese manufacturers. Chinese consumers also could alter the situation. This month, the DVD steering committee approved a Chinese version of HD DVD, which could give the format a foothold in the Chinese market and help speed low-cost HD DVD players to market around the world.
Meanwhile, European HD DVD companies, including Universal Studios, Studio Canal, Toshiba and Microsoft, launched the European HD DVD Promotional Group at CeBIT on the eve of the PS3's launch. The group will promote the format through the holiday season and is promising to release movies on HD DVD the same day worldwide when possible.
HD DVD backers have so far released 100 movies on their format and are planning more in coming months.
So far, just 23 Blu-ray movies have been released in Europe, but 71 more are slated through the summer, with many debuting the Tuesday following PS3's launch.
Because studios don't always hold worldwide rights to movies, some films may debut on rival formats. For example, in parts of Europe, Blu-ray-sided Lionsgate's films are distributed by Studio Canal, an HD DVD backer.
That could potentially broaden the list of available films for consumers and blur the situation even more. HD DVD films don't have region coding, so films will play in any HD DVD player worldwide.
Blu-ray studios have the option of including region coding. Sony and Buena Vista both say they will include region coding on new releases because they are sometimes released in the U.S. on DVD before they debut in theaters or on DVD in other countries, but the two aren't region coding catalog films.
Although the main focus in the format war remains on the U.S., neither side wants to lose the battle in any region of the world.
"It would be best for everyone if one format is used everywhere," said Andy Parsons, head of the Blu-ray Disc Assn. in North America.
