Warner Home Video is about to solicit orders from its retailers for the first three HD-DVD titles to hit distribution. We’re talking about the first high-def movies ever to be made commercially available on optical discs in the history of the world, and the Video Business Wire says retail outlets are scrambling. “Batman Begins,” “Million Dollar Baby” and “Harry Potter and the Goblet of Fire” will be distributed in late March and early April, and Warner will be distributing pricing info and order due dates to the channel soon.

Steve Sechrist
Senior Analyst and Editor
of Projection Monthly &
Microdisplay Report

This appears to be the first concrete news of order placement for either of the new high-definition optical formats, with the HD-DVD camp landing the first blow against rival Blu-ray. While the Blu-ray camp enjoys stronger Hollywood studio support and ­- perhaps - a technology edge over HD-DVD, the blue disk group may be stumbling when it comes to marketing execution. At CES, the HD-DVD camp seized the marketing high ground with solid product announcements from Toshiba that included relatively low-cost pricing for HD-DVD players, as well as early delivery dates and sales channel plans for movies. All was unveiled at a big press event, with follow-up on the show floor. In short, we were seeing good marketing execution from the HD-DVD team at the most important consumer electronics show of the year.

On the whole, the Blu-ray camp at CES was by comparison lethargic, taking a “wait until the technology is ready” approach that bordered on aloofness. While Blu-ray players were seen at all partner manufacturers booths, the lack of price, distribution and ship-date certainty gave the technology an almost vaporware status by comparison.

No one understands this first-to-market strategy better than the IT camp headed by Microsoft and HD-DVD partner Toshiba. They are masters of mind-share and will use all the clout an operating system monopoly (with zero licensing fees for HD-DVD implementation), a huge Xbox gamer install base and a first-generation low-cost player (less than half the cost of announced Blu-ray players on the basis of current announcements) to induce early adopters to choose HD-DVD as their standard.

Warner Home Entertainment is also supporting the Blu-ray camp, and , in a further hedge-your-bets move, has struck a deal with Bertelsmann in Germany. This deal calls for peer-to-peer downloads of video content, including new releases. The idea is to offer consumers an alternative to optical storage media (DVDs), allowing them the option of downloading files that can reside permanently on their PVR hard drives.

Bertelsmann says this is a full-blown “download sales” service that will launch in Germany next month as the companies are convinced that all the piracy issues are sufficiently handled using the Microsoft content-protection format.

The studios are reportedly more willing to consider this option, even in the face of cannibalizing the DVD sales that often top theater box office receipts - in part because of the recent success of Apple’s on-line video service offerings. The Warner service in Germany is based on a Bertelsmann file-swapping technology that can be readily ported to the US when the company is ready to throw the switch.

And that time may be sooner rather than later. With the shrinking cost of gigabytes on hard drive, some people are asking who needs optical disc storage? While cable networks can support streaming of HD video content, IP networks can’t to it today, as bandwidths are too limited. That’s why the Bertelsmann service will feature only SD versions of these movies and not HD versions. While most think download services may take years rather than months to gain wide adoption, a protracted battle between competing optical disc formats could significantly push forward the adoption curve of download sales by offering consumers a viable alternative to HD optical disc storage.