Random Thoughts

On July 1st, I posted a piece on the Blu-Ray/HD DVD format war, which showed pretty effectively why HD DVD was on the losing end of the format war. With today’s announcement that Paramount and Dreamworks had been convinced to exclusively support HD DVD, I wondered what the impact would be on the overall picture. While this definitely muddies the waters, Blu-Ray supporting studios still have an advantage when looking at the numbers overall.

In order to update the charts, I did a few things. I converted anything that Paramount and Dreamworks were involved with to HD DVD exclusive. I then mapped out all the films that Steven Spielberg directed for Paramount or Dreamworks and converted them to dual support, since Paramount’s press release finished off with the following quote: “2007 YTD Grosses as of August 19, 2007Today’s announcement does not include films directed by Steven Spielberg as his films are not exclusive to either format.” Note: Only those films DIRECTED by Spielberg were remapped. I also updated the all-time and YTD charts to reflect the films that have released since my original post, because some significant releases have occurred (most notably, Transformers).

With those changes, the mappings for the top 100 films YTD have changed significantly. In the original chart, HD DVD exclusive studios (at the time, just Universal and The Weinstein Company) accounted for just 10% of the YTD grosses. 37% supported both formats, and 52% supported only Blu-Ray. With the Paramount/Dreamworks change (and the increase in revenues from June 29th to August 19th), the HD DVD exclusive percentage has increased to 32%. 21% now support both formats, and 46% of the grosses now belong to Blu-Ray exclusive studios.

The HD DVD increase can be attributed to two major factors, the first, of course, is Paramount and Dreamworks moving to HD DVD exclusively. The second is the release of Transformers, which is the fourth highest grossing film of the year and is, with this announcement, an HD DVD exclusive.

In taking a look at the all-time charts, we can see that, as expected, the biggest impacts are to the dual-format support slice of the pie. WheAll-Time Grossesreas previously, on the non-inflation adjusted top 100 of all time chart, Blu-Ray studios represented 46% of the total, dual-format supporting studios supported 40%, and 12% supported HD DVD exclusively (2% hadn’t chosen a side), we can see now that Blu-Ray studios haven’t changed significantly, representing 45% of the grosses, while 26% now support HD DVD exclusively. 27% of the grosses are represented by dual-format supporting studios, and the remaining 2% still haven’t chosen a side.

Finally, when looking at the top 100 films of all-time as adjusted for inflation, we see that not too much has changed for Blu-Ray again, with studios exclusive to the format representing 59% of the gross, as opposed to 58% previously (the increase is due to Spider-Man 3 and Pirates of the Caribbean 3 sneAll-Time Grosses Adjusted for Inflation August 2007aking into the top 100, even when adjusted for inflation) while the grosses for HD DVD exclusive studios rises from 12% to 26%. The dual-format camp is where the hit is taken, obviously, as it drops from 28% to 13%. 2% remains undecided.

Of course, in looking at the figures, it appears that if any format is going to “win” this war, it’s Blu-Ray, so why would Paramount and Dreamworks opt to make this move? Obviously, the answer is money. They were offered more money to go HD DVD exclusive than they could make by staying with their dual format strategy.

The problem is that this is very short-term thinking. By doing this, Paramount and Dreamworks have inevitably extended the format war, and as a result, consumer confusion and frustration around HD on disc will remain. It’s quite possible that digital downloads will become a viable option (provided someone can figure out a way to get HD into the living room quickly and painlessly) before this war is over. This is no good for anyone, because the restriction on downloadable content will always be bandwidth. As such, downloadable films will be more compressed and will contain fewer options than their counterparts on disc. Thing about it, do you think Microsoft’s version of 300 available on XBox Live as a 5.3GB download is going to look and sound as good as 300 on a 30GB or 50GB disc? Even stripping off the extras, the film itself will be 20GB on disc, and this means less compression and better picture and audio quality.

Also, since studios are so fond of reselling us the same films over and over, why not force a “winner” in the current disc war, and dip into the consumer pool with HD on disc, then re-sell again as a download in future? It makes no sense to essentially bog down both new formats when your current format (DVD) is rapidly losing momentum. Assuming HD on disc could have a 10 year life cycle or more, that leaves pleny of room for digital distribution to figure out its DRM issues, bandwidth issues and compression issues.

Now, I have no idea if the Blu-Ray camp has similar arrangements with Fox and Disney (Sony owned studios will remain Blu-Ray exclusive for the foreseeable future for obvious reasons), but I suspect they don’t. The reasons for Fox and Disney supporting Blu-Ray likely have more to do with the extra layer of content protection than anything else. Those two studios are

terrified of the prospect of perfect HD digital copies of their movies making their way around the Internet, as they’ve made an art form out of reselling consumers the same content over and over. They know digital downloads are the future, but for right now HD on disc is the best option, and a clear format winner is the obvious path to selling that content again in the meantime.

Unfortunately, it looks like both formats are here to stay, at least for a while. Dual-format players may be the wave of the future (once prices come down, of course – right now it’s cheaper to buy separate HD DVD And Blu-Ray players).

3 Responses to “By The Numbers II: The Paramount/Dreamworks Impact”

  1. Random Thoughts

    [...] By The Numbers II: The Paramount/Dreamworks Impact August 20th, 2007 [...]

  2. McGrath Dot Ca

    Thanks for the update. I had a few titles from Paramount but most are still from Fox. :D

    And when you see that Doom9.net “picked”, for a lack of a better word, HD-DVD, you wonder what Paramount/Dreamworks were thinking. Are they saying:” Go ahead! We have less protection on HD-DVD ,so copy use all you want because we got 150M in the bank. Ha! Ha! Those HD-DVD group people have money to burn. We join you(BD) in 18 months anyway with Transformers 1 and later with 2 ;)

  3. Why I won’t go see movies in theater made by Universal, Paramount and Dreamworks | McGrath Dot Ca

    [...] you want to know why I still prefer Blu-Ray, just read the updated By The Numbers II. Blu-Ray has still more overall content. I also made my position clear on my blog. I also commented [...]

Proudly powered by WordPress. Theme developed with WordPress Theme Generator.
Copyright and Copy; Random Thoughts. All rights reserved.