Warner Insists Dual-Format THD Disc Effort Looks Ahead, Not Back
Contrary to reports that Warner developed its dual- format “TotalHD” (THD) flipper disc to jump-start slow initial sales of Blu-ray and HD DVD hardware and software, its THD effort is ahead of the curve rather than reactive, Warner Home Video Senior Vp Steve Nickerson told Consumer Electronics Daily.
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THD was to get its ceremonial CES kickoff late Tues. (after our deadline) at a Warner news conference at the Bellagio. Warner and affiliated labels including HBO Video and New Line were to discuss THD packaging concepts and present the results of consumer research that show the value of offering THD in Q4, Nickerson said. The event was to feature testimonials from Amazon, Best Buy, Circuit City and Trans World Entertainment lending their support to THD, Nickerson said. Also expected was Cinram, Warner’s lead replicator, which is believed to have done feasibility tests showing THD could be produced in quantity at a small increase in cost, Nickerson said.
Nickerson doesn’t dispute that 2006 sales of next-gen players and movies were below original expectations. But that was because hardware makers couldn’t deliver product on schedules they set a year ago -- not because early adopters were sitting out the format war, Nickerson said. Given the unexpectedly low hardware availability, Warner is satisfied with how Blu-ray and HD DVD movies sold last year among early adopters, Nickerson said. THD was devised from Warner’s growing belief that both formats “are here to stay,” and possible confusion among “early majority” and later mass- market consumers called for action, Nickerson said.
Warner will devise a logo with the term, “THD Total Hi- Def,” Nickerson said. At CES, it’s showing “concept” packaging with a red and blue case, but this isn’t final, he said. Asked whether Warner informed other studios in advance of its THD announcement, Nickerson said: “There are some who knew, those who support both formats. Talking to those who support only one format will be the next stage.” Managing the retail situation with 2 formats is important and difficult, Nickerson said. “When the transition from VHS to DVD occurred, it was easy for retailers to make incremental space,” he said. “But with the addition of HD formats to DVD, space has become a huge issue for the retailers.”
Product plans remain an open question, Nickerson said. “It’s not certain that we'll release only on THD,” he said. “There are some differences between the formats, so we might publish some titles on one format, some on the other, depending on what feature sets are appropriate to the specific content.”
As for THD pricing, it’s too soon to talk about that, Nickerson said. Warner has yet to do comprehensive “price- elasticity” surveys, but preliminary results of consumer research has shown there’s little difference in reaction to various price points $25 or higher, he said. A large majority of consumers polled said THD would give them the “security” to buy if 2 formats existed, he said. Most surprising about the research was that 1/2 the consumers polled said they also like THD for the “choice” it would offer in a hardware purchase, he said. That might pay dividends down the road if a consumer wanted to buy a PS3 for the living room and an HD DVD player for the media room, he said. Warner believes that any cost of THD above a Blu-ray or HD DVD will be offset by the company’s not having to produce multiple formats, he said.