The High Def format wars heat up.

***Dave writes over on his blog about the recent announcement from Warner Bros. to switch from supporting both HD-DVD and Blu-ray formats to exclusively Blu-ray. This has caused quite a stir in the high definition enthusiast crowd because up until this announcement the two formats appeared to be at a stalemate. HD-DVD is exclusively backed by Universal Studios (and its subsidiaries), Paramount Pictures (ditto), and The Weinstein Company (also ditto). Blu-ray has exclusivity with Sony Pictures Entertainment, MGM (which Sony partially owns), Disney, 20th Century Fox, and Lionsgate. Warner Bros. Pictures and New Line Cinema were supporting both formats, but both have announced that they are switching to the Blue-ray camp:

“Warner Bros.’ move to exclusively release in the Blu-ray disc format is a strategic decision focused on the long term and the most direct way to give consumers what they want,” said Meyer. “The window of opportunity for high-definition DVD could be missed if format confusion continues to linger. We believe that exclusively distributing in Blu-ray will further the potential for mass market success and ultimately benefit retailers, producers, and most importantly, consumers.”

Warner Home Video will continue to release its titles in standard DVD format and Blu-ray. After a short window following their standard DVD and Blu-ray releases, all new titles will continue to be released in HD DVD until the end of May 2008. “Warner Bros. has produced in both high-definition formats in an effort to provide consumer choice, foster mainstream adoption and drive down hardware prices,” said Jeff Bewkes, President and Chief Executive Officer, Time Warner Inc., the parent company of Warner Bros. Entertainment. “Today’s decision by Warner Bros. to distribute in a single format comes at the right time and is the best decision both for consumers and Time Warner.”

“A two-format landscape has led to consumer confusion and indifference toward high definition, which has kept the technology from reaching mass adoption and becoming the important revenue stream that it can be for the industry,” said Tsujihara. “Consumers have clearly chosen Blu-ray, and we believe that recognizing this preference is the right step in making this great home entertainment experience accessible to the widest possible audience. Warner Bros. has worked very closely with the Toshiba Corporation in promoting high definition media and we have enormous respect for their efforts. We look forward to working with them on other projects in the future.”

It didn’t take long before New Line confirmed they’d do the same. The announcement came just days before the start of the 2008 Consumer Electronics Show and as a result the press conference the HD-DVD folks had scheduled has been canceled:

Based on the timing of the Warner Home Video announcement today, we have decided to postpone our CES 2008 press conference scheduled for Sunday, January 6th at 8:30 p.m. in the Wynn Hotel. We apologize for any inconvenience this may cause.

We are currently discussing the potential impact of this announcement with the other HD DVD partner companies and evaluating next steps. We believe the consumer continues to benefit from HD DVD’s commitment to quality and affordability – a bar that is critical for the mainstream success of any format.

Additional Toshiba, one of the companies that developed HD-DVD, put out a press release expressing their disappointment with Warner Bros. and subtly suggesting they might sue:

TOKYO, Jan. 4 /PRNewswire/—Toshiba is quite surprised by Warner Bros.’ decision to abandon HD DVD in favor of Blu-ray, despite the fact that there are various contracts in place between our companies concerning the support of HD DVD. As central members of the DVD Forum, we have long maintained a close partnership with Warner Bros. We worked closely together to help standardize the first-generation DVD format as well as to define and shape HD DVD as its next-generation successor.

We were particularly disappointed that this decision was made in spite of the significant momentum HD DVD has gained in the US market as well as other regions in 2007. HD DVD players and PCs have outsold Blu-ray in the US market in 2007.

We will assess the potential impact of this announcement with the other HD DVD partner companies and evaluate potential next steps. We remain firm in our belief that HD DVD is the format best suited to the wants and needs of the consumer.

While it’s true that the HD-DVD hardware had been outselling Blu-ray for awhile, Blu’s been picking up steam through the fourth quarter despite its hardware being more expensive than HD-DVD. You can get a Toshiba HD-DVD player for around $159 whereas Blu-ray players start at $229 and go up. As of December 10, 2007 the number of players for both formats stood at around 2.7 million Blu-ray players and 700,000 HD DVD players. The interesting thing is that 74% (roughly 2 million) of those Blu-ray players are in the form of the Playstation 3.

Warner says it was sales over the holidays that convinced them to make the switch. Nielsen/VideoScan reports that on Black Friday some 72.6% of all high def DVD sales were Blu-ray compared to 27.4% of HD-DVD. The clincher was the month of December during which Blu-ray players outsold HD-DVD players in spite of costing almost $100 more—Toshiba even had a special $99 price on some of their HD-DVD players at Wal-Mart—and Blu-ray discs outsold HD-DVD 2 to 1.

The announcement was a big enough deal to make the New York Times wonder if Warner Bros. just killed HD-DVD:

Richard Greenfield, the media analyst with Pali Research, wrote that this marks the end of the format wars: “We expect HD DVD to ‘die’ a quick death.” He noted that NBC Universal has not committed to backing HD DVD exclusively. Viacom’s studios — Paramount and Dreamworks — have an exclusive deal with the backers of HD DVD, but Mr. Greenfield wonders if there is an escape clause.

Mr. Greenfield further wonders if consumers, on hearing this news, will return their Christmas HD DVD players and exchange them for Blu-ray devices. I’m not so sure that many people pay that close attention to Hollywood. But I certainly wouldn’t spend money on an HD DVD player until this all sorts out.

Personally I wasn’t cheering for either format in particular as I don’t have a HDTV. I’m only in the Blu-ray camp because I own a PS3 and I figured if Blu-ray comes out on top then I’m already set with a PS3, but if HD-DVD ended up king then I’d eventually spring for one of its players in the future. As long as I have the PS3 then I’ll buy Blu-ray movies in anticipation of the day I do get an HDTV. The consensus on the gadget blogs I’ve been visiting is that this signals the death of HD-DVD and Warner themselves said the move was an attempt to finally bring the format wars to an end. I don’t know if that’s what will happen or not, but I wouldn’t be upset one way or the other.

Still, it’ll be interesting to see what the next move from the HD-DVD camp will be. I imagine we’ll likely hear something before the end of CES or sometime shortly there after. In the meantime kick back, pop up some popcorn, and watch the fireworks fly.