Just two short weeks ago a dagger was lodged between my heart and lungs when Warner Bros. announced that  it was defecting to Blu-ray exclusivity. Alot has been written since then about other major studios, Paramount and Universal, jumping on the defection bandwagon as well. Obviously I am biased towards HD DVD, for no other reason than it is a completely finished reasonably priced spec – compared to BD’s half-finished over-priced schema. Having time to read blogs, press releases and rumors it is clear to this author that the decision by Warner was bad for Warner and bad for next-gen optical formats. Ultimately, however, as I have previously stated, I think this move by Warner and others will hasten the delivery of on demand downloadable HD content; effectively switching the retail point to downloads. Here is why:

1) Consumers have not decided. Despite Warner’s assertions, consumers have not decided on a next Gen optical disc format. DVDs have only penetrated 4% of the marketplace. This is a pittance of any kind of marketshare and hardly enough to base any kind of marketing decision on. Here is a quote from Warner’s press release:

Warner Bros.’ move to exclusively release in the Blu-ray disc format is a strategic decision focused on the long term and the most direct way to give consumers what they want …

 How is Warner privy to what consumers want? I also thought consumers wanted choice.

…The window of opportunity for high-definition DVD could be missed if format confusion continues to linger. We believe that exclusively distributing in Blu-ray will further the potential for mass market success and ultimately benefit retailers, producers, and most importantly, consumers.

Yeah, the window of opportunity will be missed because Microsoft and even Netflix have moved more towards HD video downloads as the true next gen platform; that will sure benefit retailers.

Consumers have clearly chosen Blu-ray, and we believe that recognizing this preference is the right step in making this great home entertainment experience accessible to the widest possible audience.

So a portion of the 4% of the home video market indicates a clear choice? Someone tell me I am wrong here, but I don’t think either format has enough market penetration to establish a preference. This is like predicting Mike Huckabee will win the GOP nomination because he won Iowa- just stupid. If Warner banks its long term success on figures related to only 4% of the home movie market and uses the same numbers to determine that “customers have decided” then they have sealed their own fate.

2) Improper Influence on the Marketplace. Warner’s move was dictated by increasing rumors and speculation on the internets that the format war would be over if a major studio announced an exclusive format decision. Clearly, Warner thinks that by going blu-ray it can effectively determine which products the marketplace will use in the future. From their press release:

Today’s decision by Warner Bros. to distribute in a single format comes at the right time and is the best decision both for consumers and Time Warner.

Says who? Warner thinks its best for consumers? What’s best for consumers is a complete product at an affordable price – exactly what Blu-Ray is not.

A two-format landscape has led to consumer confusion and indifference toward high definition, which has kept the technology from reaching mass adoption and becoming the important revenue stream that it can be for the industry …

No. No. No. A two format landscape leads to competition which, in turn leads to better products and better prices. What has led to more confusion is this decision by Warner. Prior to the announcement by Warner people were leaning either way – many fence sitters I know were leaning HD DVD or Blu-Ray. I heard more about indecision and indifference about the format war after Warner’s decision than I did before. At least with the competition each format had a fighting chance.

Additionally, it is arrogant to think that Warner can “win the war” for one side or another; that they can sling their big sack around and the lemmings will follow. Warner would benefit regardless of which format won, they would sell their movies in HD DVD or Blu-ray. Warner just decided lob tis sack around and tell the consumers which format to support

3) Keeps Prices High. Less competition means higher prices and less quality. Supply, dmand and prices are driven by market forces. when a third party intervenes to affect the natural market forces pandemoneum ensues! Well, maybe not pandemoneum, but higher prices and less competition for sure. Warner has done just this. By prematurely using its big sack to attempt to end the war Warner has intervened and stated what format it thinks is best for the consumer. In a free-market, however, the consumer should decide. Ultimately, with higher prices and shittier quality, the consumer will suffer and will likely shift their money to the more affordable format: downloads.

4) DRM – This is one of the unsung factors in Warners decision. Blu-ray is a more DRM driven format. Blu-Ray imposes multiple DRM schemes including country coding. Publishers and content owners like this, consumers do not. HD DVD has a AACS scheme, but it lacks a country code (optional) and has already been ‘cracked’. Consumers like this. With Paramount and Universal rumored to be jumping on the Blue-Ray bandwagon one can only assume that the big draw is massive consumer hated DRM. How’s is that for what consumers want Warner?

By elevating Blu-ray to the winners position, you are in effect supporting the spread of DRM. This may ultimately backfire with a grassroots campagin against Blu-ray and its DRM scheme.

When Blu-ray takes over and HD DVD is gone from the landscape (if that occurs) I don’t want to hear any of the fan boys bitching about how locked down Blu-ray is. You had your chance, until Warner took it away.

If Paramount and Universal do go exclusive Blu-ray it will be a sad day for the marketplace, competition and consumers. Such a move would signal a certain death for HD DVD. Additionally, the rise of DRM in the home video market will be fodder for bloggers and pirates all around the world.

5) Horrible Trade Name. “High Definition Blu-Ray Disc” is a horrible name. First, why exclude the ‘e’ from Blu. Digg searches reveal that many that submit stories to Digg think its spelt “Blue-Ray“. Additionally, it adds consumer confusion to a marketplace that understands DVD to stand for “Digital video Disc” (it relly means Digital Versatile Disc). Further, HD DVD speaks for itself – High Definition DVD. Blu-ray is a crappy … crappy tradename. They can’t use DVD until the DVD forum let’s them. Ha ha.

Let me know what you think about my opinions. Writing this froma wooden shack in northern California does not mean I am correct. It just means I will hate your opinion. But I want to hear it anyway.

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