Paramount to Support Blu-Ray
Posted Oct 3, 2005

Paramount Home Entertainment has decided to support Sony's Blu-ray Disc format for the next-generation of high-definition DVDs.

Although Paramount will continue to support Sony's rival, the HD DVD platform from Toshiba, the studio is the first to end its singular commitment to one format, which both sides had hoped would give the industry its best chance of avoiding a Betamax/VHS-like format war.

With Warner and Universal expected to follow suit very shortly, Paramount's decision potentially throws the decision once again into the hands of consumers and retailers next year. Both formats are going to be introduced next spring.

A format war is precisely what studios, hardware manufacturers, retailers and consumers desperately want to avoid. The introduction of two incompatible formats has the potential to cause a much slower adoption of a new format for their movies, games, music and other programming, as consumers hesitate to pick one for fear of selecting the next Betamax that will become obsolete. Studios and hardware manufacturers managed to find a compromise solution on DVD, which led to the introduction of the most successful consumer electronics product ever.

With the DVD market rapidly maturing and slowing to single-digit growth rates, media companies, which derive most of their studio revenue and profits from DVD, are pressuring their home video and consumer electronics units to get the next-gen format into the market as quickly as possible, whichever one it is, in order to rejuvenate sales of their vast libraries of TV, movie, and music programming on discs.

A big setback for HD DVD was the delay of the launch of its HD DVD players from this holiday season until sometime next year. Blu-ray has always set mid-2006 as its launch date, most likely with the launch of Sony's PlayStation 3 videogame system, which will incorporate Blu-ray. Microsoft will not commit to including HD DVD in its next-gen Xbox 360 system.

In fact, the PlayStation 3 factor—Sony will not be swayed from introducing Blu-ray as the format is locked as a component in millions of PS3 machines next spring—is believed to be what has turned Paramount and Warner around in their thinking.

Although it would be a little more expensive to release movies authored and inventoried in two different formats, it's something the studios have done before with Betamax and VHS and laserdisc and 8mm, in some cases.