HD-DVD & Paramount

Paramount shook up the marketspace a bit by indicating a refreshed 18 month deal to do distribution in the HD-DVD format, that made some news.

People do not get that a big supply-side quagmire was caused in part by a Blue Laser shortage by supplier and patent holder http://www.nichia.com/ . Just look at the press, its all about lawsuits to firms trying to supply the gap. The "shortage" due to mfg yield and across the board costs did some 2006 damage, and revised deals, hammered Sony... on and on. The muck of all that is drying up now, enough for larger players to walk on anyhow, and this is making way for china and korea to push out mass market items.

Hence the $199 HD-DVD player is coming soon (A2 = $229 ) to a store near you. This is the price-point in my opinion that enables a critical mass of players, and therefore a demand curve for HD-DVD. Although its kind of a shame in a way that the PS3 and its player brethren did not gather more player coverage in HDTV equipped homes, it was in a way predictable that game engines would be purchase justified for media playabiliy and then in actual practice used mostly for games.



Here is the real rub in all that. VC-1 codec on HD-DVD is just too damn good, it has no filesize bloat for quality, so blu-ray claims of more storage area just doesnt hold water or matter, since it is not needed in a VC-1 authored 1080p. Although i have not got a fully produced VC-1 longform in house, i have made enough 1080p VC-1 to say without a doubt that 25 gigs is plenty enough. And to make matters worse for percieved price performance, my focus group could not tell any difference in the play of either HD-DVD or Blu-ray format for quality of image presented.

So... has Paramount pushed the HD-DVD adoption path? Perhaps, but really its more like they are following the smart road that is already there, with the coming season of inexpensive HD-DVD player availability, and the benefits of packaging that deal with some of thier titles.

Are HD-DVD's being ripped and burned into market by those scummy little copycat replication houses selling knockoff copies of HD movies? Not really. No impact from crackable DRM at this time, no issues with 2gig segment-splits or downloads of feature full length films either. All that noise was from a small crowd to a small crowd. Mom and pop middle-america has no interest in hacker antics or in massive downloading. They just want to see a movie, have it on a $199 player, and pay 25 bucks to own it. Merry christmas to whomever supplies that to them.

We do Ad-hoc stuff based on interviews. Anecdotal reactions:

Is there any such thing as format or brand loyalty? Sorry , focus group responses are near zero brand-centric. They are price-performance and content-centric at a 90% confidence level across all demographics. Blr-ray claims of better in the eyes of the customer doesnt seem to matter to actual real people confronted with a choice... hence the choice is a filter: can i take this home and play it?

Technology responses were:
NO tech issues or need for tech awareness.
http://www.thelookandsoundofperfect.com/ Click on HD-DVD interactivity on the left.
The groups as a whole didnt care much about the "extras". The size of the Pause and Play buttons mattered. Biggest gripes: enforced trailer play at load, universally hated. ...when in the mood for action thriller, they dont want a face full of chickflick or shrek.

A crappy movie story in pristine 1080p will not compete with a slightly fuzzy broadcast copy shown in a 720p plasma screen of a great filmwork. Good news for the great feature film biggies, since interest in well produced bigbudget stuff is very high, they still rule even when the box office is also the local bestbuy & wallmarty shelf-space, refreshing the demand for HD format re-releases. Some offers are actually pretty good.
http://thelookandsoundofperfect.com/_pdf/perfectoffer_advert.pdf

Bottom line of the moment seems to be ease of use, availability and pricepoint.

Fore me personally, I love the "extras" and rich feature-set. I would like a really good slo-mo option, not all players seem to manage that.

The Blu-ray camp has to get off the highhorse here and stop being so self-absorbed, see the pricepoint situation unfolding and cost-enable the distribution. In all honesty the Paramount thing is just a case of being smart in the moment, and not as a tech thing at all, its in the numbers on main street america. People arent going to go HD-DVD because of paramount, they will be looking at Paramount films because the player has the right price and it had a couple of thier films bundled in the brick-and-mortar holiday deals.

Once the high-end geekweenies and techsavvy market-buys approach saturation (soon like about now actually), the paradigm shift to mid-upper class buy-patterns will clobber all the crap decision-making that got a nod in last years boardrooms. All that self-serving attitude will dissappear with the bottom line. Anyone who has not re-written the margin profile for a line item or product will be in trouble. Know this for sure ... marketing quality will be the means to the next moves, and content producers should be the winners in the next round.