STUDIOS
START TO WEIGHT IN ON HIGH-DEF DVD
Warner leads push for launch by late 2003.
By Daniel Frankel, Video Business Magazine 8/2/2002
AUGUST 2 | In a scene somewhat reminiscent of the DVD format's tumultuous adoption
by content providers in the mid-'90s, top executives at the major studios met quietly last
week in Los Angeles to discuss the opportunities and challenges for a high-definition
version of DVD.
The ultimate outcome of the meeting could mean that consumers could have
access to HD-capable DVD players and packaged media as soon as the fourth quarter of 2003,
according to several sources.
However, the decision of which technology is used and how quickly it comes
to market might once again become a battleground over issues that have more to do with
politics and patents than choosing the best technology.
The first reconvening in some time of the Hollywood Advisory Council, which
was formed in 1994 relative to the creation of DVD, was described as a first unofficial
step toward a unified approach in making sure the needs and desires of content providers
are made clear to technology developers from the earliest stage.
The HAC includes executives from virtually every major studio's home video
division but has no organizational structure and therefore no official spokesperson. Some
of those involved call it a "loose, ad hoc committee," a term that some say was
adopted by the group to avoid arousing the suspicions of government antitrust officials.
The July 31 HAC meeting at the Walt Disney Co. compound in Burbank will be
followed by a smaller sub-committee gathering within the next several months. The notes
will be passed onto the DVD Forum, the industry consortium that develops and maintains
official DVD specifications.
Last week's gathering "was really a kick-off meeting to discuss what
we'd like to see," said one studio official who attended. "Warren [Lieberfarb,
president of Warner Home Video,] gave a lecture, but not a lot was discussed or agreed
to."
Indeed, while the meeting lacked the discord surrounding the adoption of
DVD, consumer electronics analysts said Warner has once again taken a leadership position
for the sooner-than-later introduction of a new home entertainment format.
Although HDTV has been slow to take off--only 3 million homes currently have
sets--the Consumer Electronics Association reports record-high consumer satisfaction
levels for HDTV and estimates 30% market penetration by 2006. There's consensus among the
big studios that development of some form of HD-capable packaged media is a good thing.
There's also agreement that copy-protection standards must be much more
stringent than they were the last time everyone got together to work out a new format.
"The copy protection on DVD is a joke," said one studio official. "Looking
at a high-definition disc, if there's no meaningful protection, we're not going to put our
vaults in the public domain."
Warner also believes time is of the essence in getting an optical-disc HD
format to market since HD-capable Digital VHS, which is embraced by 20th Century Fox Home
Entertainment, is already in the hands of a small number of consumers.
Of course, with several HD-capable packaged media formats in development,
patents and other self-interests could prove to be divisive in deciding which one to
choose.
Warner is said to be pushing for the adoption of what is essentially a
souped-up version of the traditional red-laser-based DVD technology. Based on powerful
compression algorithms being co-developed by Microsoft Corp.--a participant that seems to
deliver a "what are they up to?" chill down the spines of some studio
officials--red-laser HD DVD uses what is essentially a DVD-9 disc.
Since it uses existing manufacturing technologies, red laser could be
employed into the consumer market by the end of 2003, according to Richard Doherty,
director of research for the Envisioneering Group, a consumer electronics consulting firm
based in Seaford, N.Y.
That would be beneficial to Warner, which owns not only a huge DVD
manufacturing operation, but also numerous patents related to that industrial process.
"Warner is clearly the biggest advocate of red laser," said
Doherty. "Warner has a proprietary interest in the existing DVD machinery continuing
for decades."
According to Doherty, unlike those talks surrounding the adoption of DVD,
early discussions between the studios about an HD disc have been civil. "They're all
trying to not make this as oppositional as the DVD wars," he said. However, although
it hasn't encountered harsh opposition yet, he said Warner could face a tough road in
getting all of its competitors on board specifically with red laser.
Fox, for example, has already indicated its support for D-VHS. However,
sources said the studio is showing early signs of supporting Warner's leanings, at least
verbally.
Meanwhile, Doherty said, Columbia TriStar Home Entertainment is likely to
support the Blu-ray Disc standard, an entirely new optical media technology endorsed by
the supplier's parent company, Sony Corp. Sony, along with Philips Electronics, was a
fierce early competitor in the DVD format wars with Toshiba Corp. and a consortium of
other consumer electronics companies backed by Warner before all sides eventually worked
out a hard-fought hybrid platform that is the current DVD.
Indeed, Blu-ray, which requires an entirely new manufacturing process, is
the optical-disc technology favored by the majority of the consumer electronics companies
that occupy the DVD Forum.
Able to hold six times the data of a traditional DVD, Blu-ray is capable of
well beyond the 19.3 MB-per-second bit rate the Federal Communications Commission has
established as the minimum for HD broadcast; a benchmark red laser falls well below.
"Clearly, the Warner argument is that we can get red laser to the
market faster," Doherty said. "But some of the other studios have wondered if
using this approach could result in a loss of picture quality that would upset artists and
directors. Those developing the red-laser compression algorithms say, 'We can get a pretty
good picture with a bit rate of 5 MB.' Well, the question is, how good is 'pretty
good?'"
