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Far from declaring a stalemate in the high-definition disc format war as Sony's CEO Howard Stringer recently did, Walt Disney Home Entertainment president Bob Chapek told TWICE during a recent Blu-ray Fest promotional event here that the Blu-ray camp's inevitable victory was only delayed slightly.
He said the surprise announcements of Paramount and DreamWorks this summer to exclusively back HD DVD temporarily confused the market, but Blu-ray's momentum continues unabated, and it should be revealed as the obvious victor during the coming year.
The following is a brief Q&A interview with Chapek during the studio's sendoff for the DVD and Blu-ray Disc releases of "Ratatouille":
TWICE: What's your assessment of the progress of the Blu-ray Disc rollout so far?
Chapek: I think it's going according to plan. Some people were surprised, and some weren't about the announcements that took place with competitive studios in the HD DVD camp a few months ago. But, to me, that was the last act of a desperate format trying to pull itself out of a nose dive. It was too little, too late. Consumers are voting with their dollars in anywhere from a 2:1 to 3:1 ratios for Blu-ray domestically, and even higher than that internationally. We have 90 percent market shares in Australia and Japan and anywhere from 70 to 80 percent market shares in Europe.
In my mind, the artificial extension of the format war, through whatever incentives were given, was counter to the consumer. The consumers made their minds up what format they preferred by some pretty large margins, and [the Paramount and DreamWorks decisions to back HD DVD exclusively] just served to extend what's an unnecessary format war, and confused the consumers and put at risk those who may now buy a format that will become obsolete very shortly.
Aside from that little momentary distraction, consumers continue to buy Blu-ray Discs as more players come on the market and discs become more prevalent and start to gain dominance at retail. When Blu-ray first came out it was getting 50/50 shelf space with HD DVD, and now the shelf-space has clearly turned in the favor of Blu-ray, and that means the sales will only continue to slide towards Blu. That will make the already inevitable outcome seem even more inevitable.
TWICE: You sound pretty confident. Any guess for when that might be?
Chapek: I would have said it would be over by the end of the calendar year, but that was before the surprise announcements [from Paramount and DreamWorks]. My guess is that within the next year it will be clear in everybody's mind that Blu-ray is the ultimate successor to DVD.
TWICE: What is Disney's current plan to bring BD Live Web-enabled interactivity into the Blu-ray market?
Chapek: We [Disney] are targeting late Spring for our BD Live applications, and it will be profound when we do it. As examples of what we can do, think of the Liars' Dice computer game that was part of "Pirates of The Caribbean II: Dead Man's Chest." Now imagine that we are playing each other through our Blu-ray players — You're in New York and I'm in L.A. Or, think of "Sleeping Beauty" when the first Disney Platinum title comes out in Blu-ray. Let's say we make an appointment that every Tuesday at 5 o'clock Sleeping Beauty comes out and engages in a live chat. You can ask her questions and she will respond to you. The possibilities are limitless.
TWICE: Many of the Blu-ray Disc players on the market now do not have the necessary hardware to utilize those forthcoming BD Live capabilities. Do you have any concern for those who have purchased, in a sense, obsolete products so early in the game?
Chapek: I would say the people who have bought a Blu-ray player, particularly a set-top box, up to this point are early adopters and early adopters thrive on buying not only the first player that's out on the market, but they understand that there's a lot of churn. When I buy the first Blu-ray player that comes out, I know that there are going to be features and benefits to come along two years out that are going to be superior to what I have. I think that amongst the group of people who have already bought it, it won't be too much of an issue, but we are doing everything we can to encourage the CE manufacturers to rapidly evolve their players to full functionality so there are fewer people impacted. But that is up to the CE manufacturers. We just encourage them all the time.
TWICE: A number of Blu-ray studios and manufacturers recently pooled their resources on an "I Do Blu" national advertising campaign — but not all are participating. Why was that?
Chapek: The Blu-ray group's strength is that it has 170 companies. The Blu-ray group's liability is that there are 170 companies. Trying to get 170 companies to unanimously agree to anything is really, really tough. Given that there are certain companies that are naturally inclined to step up and fund the marketing efforts, certain companies quickly said "yes" to co-marketing, and that allowed us to move very quickly. But all were invited and all are welcome to participate.
TWICE: 20th Century Fox recently announced that it will add a "Digital Copy" version of "Die Hard 4" to a two-disc special-edition DVD release due on Nov. 20. Purchasers can use the WMV version to transfer to PCs and portable media players without breaking CSS copy protection. Will Disney offer similar options?
Chapek: Absolutely. We plan to begin that around the middle of next year. I think you can look at it one of two ways. It's either a half-step to a true digital rights management managed copy world, or you can say if two of the biggest problems with downloading movies is storage space and download time, it solves both of those pretty well. Either way you look at it, it is going to be a real nifty interim step, or it is going to be the way the majority of consumers get their digital content.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.