How Universal, Paramount, Dreamworks and Toshiba could...

... still keep HD DVD competitive if they wish

If you're looking at my main page at JoeUser.com (http://terpfan1980.joeuser.com) then you'll see that the article just before this is about the announcement on 11 February 2008 that Netflix intends to drop support for the HD DVD format for future disc releases and will not replenish stocks (inventory) of the current HD DVD titles that they are carrying. They intend to go Blu-ray exclusive and leave HD DVD in the dust as they expect the format to die out and want to help hasten that death, despite insistence from Toshiba, Universal and Paramount (and Dreamworks along with them) that they aren't wavering in their own support of HD DVD.

How can or should the partners in the HD DVD consortium respond to this move by Netflix. Well, to borrow somewhat from what someone else already had suggested in forums over at HighDefDigest.com I would say go for broke, and go for the biggest and baddest trojan horse move you possibly can. Take the game that Sony played with the PS3 and go one better -- stop releasing content in DVD only format, and move to releasing content only in combo format (HD DVD on one side, DVD on the other).

Doing that would cost a little more, but those costs could be reduced by having Toshiba waive some fees from their share of DVD licensing/usage fees, and by having Toshiba and/or partner Microsoft help subsidize production of discs over the course of say the next 2 years. With such a move in place, start pumping out content from the vaults (library of films) from these studios, especially from Universal and Paramount. Get as many titles as possible out into the market, even if most are being sold as the latest iteration of a DVD release. Get 'em out there where customers will starting building up their collections 1 by 1 until they have 5, 10, 15 and 20 combo discs in their collections.

At the same time, keep bringing down the costs of the players (which have gotten down into the bargain range already really) and if possible keep giving away 3 - 5 titles in the HD DVD format for free for each player sold. Get the number of discs out in the marketplace to critical mass and in so doing you keep the format alive well into the future.

Failing to take these measures will most likely result in HD DVD continuing the death spiral that seems to be unstoppable.

Just my $0.02 (with some inspiration from forum members over at HighDefDigest.com)

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Why on Earth would the movie studios do it? They have nothing to win with a prolonged battle between Blu-ray and HD DVD. It is in their best interest if there is only one standard so consumers can start buying those devices in the knowledge they won't bet on a losing horse. None of the studios in the HD DVD group have a vested interest in its succes. Their support was bought, so don't expect them to go out on a limp to try to rescue HD DVD by giving up their own cash cows. Toshiba doesn't have the deep pockets to make such a move worthwhile for the studios, and if Microsoft had been really committed to HD DVD it had bundled it with the X-Box.

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Why on Earth would the movie studios do it?

Money.

Seriously, if Toshiba/Microsoft and the rest of the HD DVD group want to keep the format viable long term, they need to spend enough money now to get the format to critical mass. Once you are at critical mass you can stop pumping the money into the format and get back to normal licensing fees over time.

If combo format discs are available at the same price as standard DVDs and standard DVDs are no longer produced in any non-combo format, you can get enough HD DVD content out into the marketplace so that you can convince buyers that they really are missing something by not using the HD DVD side of many discs they already have.

Best guess - get the number of combo format discs in most buyers homes up into the 50 - 100 total disc count area and you'll be giving people more than enough reason to be replacing DVD players with HD DVD players. Once you do that, if you've added enough 'trojan horse' content available as web enabled updates and such you can start earning money via micro-transactions for things like ringtones, mini-games, and more.

Again, this really all depends on whether or not Toshiba/Microsoft/Universal, etc., want to spend what it would take to not just keep the format around (as they are currently doing) but want it to really be successful.

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