Warner Remains Loyal To Dual HD Formats

Denver — Despite reports that Warner Home Video has been offered lucrative payments to follow Paramount’s path and become an exclusive HD DVD high-definition disc provider, the company’s president Ron Sanders told TWICE at CEDIA Expo that the company has enjoyed strong sales in both formats and will likely continue to support both until that changes.

Sanders also revealed that Warner will be releasing all four “Harry Potter” movies on high-definition discs in time for the holidays, and confirmed reports that Warner’s plans for its TotalHD flipper disc remain on hold.

TWICE: What is the status of your plans for TotalHD?

Sanders: We’re concerned that as the only one publishing on it, it would be hard to make it go. We’re still looking at, though. We’re still talking to retail, but it’s kind of on hold right now.

TWICE: With plans for THD on hold, what do you think about the new dual-format players on the market?

Sanders: I’m excited about dual-format players. It takes out that worry about picking the wrong format, and with the studios lining up on one or the other format it’s kind of a nice solution, but until the price points come down — they are still around $1,000 — it’s not going to be a mass product. As more and more drives go into computers for both formats, I think that will drive the price down for drives going into set tops.

TWICE: Have you received offers from HD DVD or Blu-ray to be exclusive with either format, as Paramount recently did with HD DVD?

Sanders: We’re talking to both sides and it’s crazy right now. We remain committed to both for the time being. We’ll see how the fourth quarter plays out. The consumer is still kind of divided, and we still believe that we should offer the content in both formats. Now, we will watch the marketplace very closely, and see how it plays out, but for now we are supporting both.

TWICE: Do you actively encourage retail accounts to stock both formats?

Sanders: We do. There are no special incentives to support both but they will chase the consumer, and the consumer wants both. In software, new release titles are selling around 2-to-1, Blu-ray to HD DVD. But it varies by any given title. On “Planet Earth” we sold more HD DVD than Blu-ray and on “300” we sold more Blu-ray than HD. It’s probably two-thirds to one-third, but you’re going to give up a third of that. We’re about returning the best profit on the asset of a film, and it’s hard to give that up. So, let’s see where it all plays out.

TWICE: What do you expect will happen?

Sanders: It’s really hard to handicap. I can’t tell, which side, if any, will win. Right now it’s like a Mexican standoff. If the consumer continues to support both formats, the industry will as well. It will be really pivotal what Toshiba does this fourth quarter in hardware. If they sell through everything they ship, and it’s a big number at the price points that are coming out, then I think [HD DVD] will be around for a long time. If they don’t, then it could go Blu-ray’s way. But Toshiba is getting very, very aggressive on pricing, which is putting pressure on Blu-ray player manufacturers to bring prices down. As a content company we just want more hardware in the homes. So what ever drives more hardware is good to see. Right now it looks like there is price pressure on both sides because there are two formats — more pressure than there would be if there was only one format. So, for our interests, more razors means we’ll sell more razor blades down the road.

TWICE: What will be the hot WHV high-definition releases for the holidays?

Sanders: We will have new versions of the complete “Harry Potter” catalog, I through IV, coming out this Christmas in high definition, we’ll have “Oceans 11” and “12” coming out in both high-def formats this fall with “Ocean’s 13”, and we’ll have popular TV series releases including “Nip Tuck” in high-definition this fall with more coming.

TWICE: How are you finding HD disc sales so far?

Sanders: “We have 60 titles released in Blu-ray already and we will be cranking that up further. We are just thrilled at how well they’ve been doing. Our top seller to date has been “300,” and before that it was “Planet Earth,” and before that was “The Departed.” We have had the top-selling HD title since we released “The Departed” at the Oscars.

By Christmas, we’ll probably do half a million units in high definition for “300,” so the marketplace is off and running. It’s becoming meaningful on a title basis.

TWICE: What reaction have you observed to the Web-enabled extras you’ve included in select HD DVDs and what are the plans to add similar capability to Blu-ray?

Sanders: I think with Blu-ray 2.0 coming this fall, we are going to see a lot more Web-enabled content coming from everyone. Consumers want it. We’ve had quite a number of downloads of ringtones on our “300” connected DVD and HD DVD. We don’t know where it’s going to go. We are kind of in the nascent stage of what is possible, but I think it’s going to be great. I think there is going to be a pent-up demand that is going to be very interesting to watch once [Web-enabled Blu-ray] products launch into the market.

TWICE: Will you differentiate the extras between the formats in any way?

Sanders: We plan to do exactly the same thing with both formats. The only thing we can’t do with Blu-ray yet is the connectivity

TWICE: Do you have any concerns about content security for either format as the market evolves?

Sanders: None. DRM is robust on both sides. There is no appreciable difference.