HOPE REKINDLED FOR HIGH-DEF TRUCE
Talks for unified format possible
By Paul Sweeting 4/1/2005
APRIL 1 | Signs of a recent thaw between leaders of the rival high-definition hardware camps are rekindling hopes in Hollywood that a single, unified disc standard could still emerge and avert a full-scale format war in the marketplace.
According to sources with knowledge of the situation, recent changes in the senior executive suites of Sony and Toshiba have changed the political dynamic between the companies and led to a softening of the brinksmanship that has kept the industry bitterly divided over choosing a successor to the DVD. Although no formal talks have taken place yet between the companies, studio executives who have followed the situation closely say they are hopeful discussions could get under way by summer.
The new developments come at a critical time for the industry and for the rival camps.
Toshiba announced in January that it will introduce HD DVD players in the U.S. by the fourth quarter of this year, and three studios, Warner Home Video, Universal Studios Home Entertainment and Paramount Home Entertainment, said they would begin releasing movies in the format to support the launch.
That would virtually guarantee a format war given the commitment of Sony, Panasonic and other leading hardware makers to the rival Blu-ray Disc format. Sony Pictures Home Entertainment and Buena Vista Home Entertainment have said they will release movies in Blu-ray as soon as that hardware reaches market, probably by the second quarter of 2006.
Doubts have recently been raised about HD DVD's fourth-quarter timetable, however. The six member companies of the Advanced Access Content System consortium had expected to complete work on the technical specifications and licensing scheme for the format's copy-protection system by the end of March.
Work has been slower than expected, however, and sources who have followed the progress say it could be well into the summer before final specs are ready.
Without final specs, hardware makers cannot start building machines and replicators cannot start stamping out discs. Unless the copy-protection system is ready in the next couple months, manufacturers will be hard-pressed to get product into the market by Christmas.
Although the prospect of a delay might have made the HD DVD camp more open to talking with its rival, recent comments from a high-ranking Sony executive also have sparked hope in Hollywood.
Speaking to reporters in Japan on March 23, Sony's incoming president Ryoji Chubachi said, "Listening to the voice of the consumers, having two rival formats is disappointing, and we haven't totally given up on the possibility of integration or compromise," according to the IDG News Service.
Chubachi's pending promotion to president of Sony, replacing Kunitake Ando, comes as Sir Howard Stringer takes over as chairman and CEO of the Japanese conglomerate, replacing Noboyuki Idei.
Although the changes are not thought to be directly related to the high-def format battle, sources say the new management is less personally invested in the long-running contest with Toshiba and its allies and more sensitive to Hollywood's keen interest in having a single format.
As part of the reshuffling at Sony, executive deputy president Ken Kutaragi was stripped of his board seat and had his executive portfolio narrowed to concentrate on Sony's PlayStation business. That took him out of any direct role in the format battle.
"Idei, Ando and Kutaragi were the three guys who were most dug in on Blu-ray," said one source who has followed the situation closely.
A spokesman for Sony in New York cautioned against reading too much into Chubachi's remarks.
"There may have been some misunderstanding of his comments," the spokesman said. "He was speaking to the need to be focused on the customer, and in that context, he said a single format would be better for the customer."
Toshiba also has undergone a change at the top.
In February, the company named Atsutoshi Nishida to succeed Tadashi Okamura as president and CEO, effective in June.
"I think it's great that you've got two new heads at these companies," said a source hoping for a unified format. "Hopefully they won't be so arrogant."
It's too early to tell if the new tone will lead to a substantive breakthrough, but the recent movement carries a striking echo of the struggle over the current DVD standard.
Idei took over as chairman of Sony in April 1995, when the electronics company was still pushing its Multimedia CD format as the replacement for videocassettes.
At the same time, Toshiba and Time Warner were promoting the format that eventually became the DVD.
Although it looked initially as if the too were headed for a format war, Idei's elevation helped change the political dynamic, as he was able to tap his previous relationship with then Warner Home Video president Warren Lieberfarb to broker a compromise.
Idei had previously headed Sony's optical media unit, where he had worked on the earlier generation of videodisc with Warner and other studios.
Studios on both sides of the current format divide are encouraged by the recent signs, but no one has gone so far as to change their plans.
Warner, Universal and Paramount all say they plan to push ahead toward the planned fourth-quarter launch of HD DVD.
Any backing away at this point, in fact, could prove embarrassing to the studios, adding another political wrinkle to any unification talks.
The HD DVD studios are on record proclaiming that the sooner the industry moves to a high-def standard the better, although some of those comments were probably meant as much for the Blu-ray camp as for public consumption.
Any serious unification effort could push a plausible launch date back by as much as two years.
Still, the studios might accept a delay if it meant avoiding a format war.
