Warner Delays HD DVD Role Out

Warner Home Video has said that it’s delaying the release of movies in the HD-DVD format because of technical problems, raising concerns that players in this high-definition format may have little content to play when they come out at the end of this month.

The entertainment company had set March 28 as the launch for its HD-DVD movies, but Warner Home Video division president Ron Sanders told Reuters the outlook was “tenuous.” “We may be a week or two later,” he said. “We just don’t know.” Parent company Warner Brothers declined to comment. The delay comes after Toshiba and other hardware makers pushed back the launch date of players to Spring 2006 from their original goal of rolling them out during 2005.

 The postponement could be a problem for Toshiba-backed HD-DVD, which has been locked in a battle with the competing Blu-ray format, backed by Sony. Both want to rule the $40-billion market for high-definition video players and discs. HD-DVD had been planning on a two-month head start over Blu-ray, which was expected to begin releasing discs in May. The latest delay could narrow the gap (see Blu-ray to Shine in May).

There’s another problem. Other HD-DVD-backing studios such as Universal and Paramount still haven’t come up with a fixed date for the release of their HD-DVD movie titles, which they announced in January. This could leave Toshiba’s first HD-DVD players very lonely on launch day. Toshiba, HD-DVD’s biggest backer, said in January it would release its first players by the end of March. The players are expected to cost $500 and $800 apiece, depending on the model.

A Toshiba spokesperson did not comment on any delays in the release of software for the movies. “We continue to work with [Hollywood studios] to coordinate the launch, and I cannot comment on behalf of the software industry,” said Jodi Sally, vice president of marketing at Toshiba. Ms. Sally said Toshiba players will launch as originally scheduled. But some reports said only 10,000 Toshiba players are currently being shipped to retailers, indicating low sales expectations.

In Need of Software

Josh Martin, an analyst with research firm IDC, said if none of the studios release content at the time of the player launch, Toshiba might have to push back its player release date. “From a business perspective, it doesn’t make sense to release players when there is no software,” Mr. Martin said.

This news bodes well for rival Blu-ray, whose players and software are expected to launch in the summer. “It works well for Blu-ray because the gap between the two launch dates is getting closer from a time-to-market perspective,” Mr. Martin said. However, the bigger question is whether the delay will be weeks or months, and whether other studios may also have delays, Mr. Martin said. One of the reasons for the push-back could be the AACS (Advanced Access Content System) content protection system, which allows limited sharing and copying of the next-generation DVDs. Both formats plan to implement the new system.

Hollywood studios could still be finalizing the specifications of the AACS system to ensure their content is protected in the best possible way, Mr. Martin said.
If that is the case, Blu-ray will also face similar delays, he said.