"If you're Best Buy, you want people to keep coming to your store for the packaged media — not just the player," Doherty says. "Same thing with Target. And there's no exit strategy for (the DVD format split) that is consumer-friendly. The one who'll be left holding the bag is the retailer."
Here's where things stand:
Blu-ray and content
The Blu-ray camp says consumers buy movies — not formats — and will go with whoever has the best selection.
If it's correct, then there's no contest: Now that Warner has signed on, studios backing Blu-ray accounted for more than 66% of last year's DVD rentals and sales.
Disney and Panasonic are making that point to consumers, and featuring Blu-ray's gee-whiz high-def pictures and bonus features, in a show-and-tell presentation at eight major shopping malls called "Disney's Magical Blu-ray Tour." The studio also will promote the technology in October when it releases its first classic animated flick on Blu-ray: Sleeping Beauty.
Viewers less interested in family-friendly fare may be swayed by the leading distributor of porn DVDs — an important, if often overlooked, force in home video.
"We're going to be phasing out HD DVD and going straight to Blu-ray," says Ali Joone, founder of Digital Playground, which says it accounts for more than 80% of the adult videos sold in high-def.
It wasn't just because of Warner. The makers of the software that Digital Playground uses to prepare its DVDs and menus said last month that it will continue to develop enhancements for Blu-ray but not for HD DVD.
"It's going to be much more painful to stay in the HD DVD arena than going into the Blu-ray arena," Joone says.
HD DVD and price
But the HD DVD camp says Blu-ray supporters pay too much attention to Tech Alley and not enough to Main Street.
"The real competitor here is that consumers are satisfied with DVD," says Toshiba's Sally. "It's really price that's the motivating factor for consumers" to buy either high-def DVD format.
To address that, and to try to create a groundswell of consumer support for HD DVD that Hollywood and retailers can't ignore, Toshiba on Jan. 13 slashed the price of its high-def disc players.
The least expensive one costs $120 — about $200 less than the cheapest Blu-ray model — and comes with seven free HD DVDs; The Bourne Identity and 300 come with the unit, and consumers can pick five others from a list of 15.
"I know for a fact that since we made our price move, our weekly sales are twice the rate of the weekly average that they were in 2007," Sally says.
Will consumers consider that money badly spent when they start to see more high-def movies released on Blu-ray?
Not to worry, she says.
The studios will continue to release all of their movies as conventional DVDs. And HD DVD players — as well as Blu-ray ones — use a technology that can convert them to what she says is almost high-def quality.
That may work just fine for people who don't have elaborate home-theater systems.
"If you have a 37-inch TV, you probably wouldn't see a huge amount of difference because the screen size is so small," says Paul Erickson, director of DVD and high-def market research at research firm DisplaySearch. "As you start getting to 46-inches, sure, you can tell a difference."
But Blu-ray supporters say that it's a dead-end strategy to sell a high-def DVD player as a jazzy conventional DVD player.