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Toshiba takes European lead over Sony in HD
Aficionados of European cinema who would like to watch films such as Roberto Benigni's award-winning The Tiger and the Snow in high definition, may, for the time being at least, have to buy a HD-DVD player rather than a Blu-Ray Disc machine.
A number of European independent film studios and DVD production companies are opting for Toshiba's HD-DVD format over the rival Sony technology, thanks to a strong support programme by the HD-DVD camp and concerns over the price of Blu-Ray technology.
Sony and Toshiba are locked in a bitter battle over which technology will become the standard for next generation high-definition DVD content, reminiscent of the 1980s battle between VHS and Betamax.
Early indications from the US are that Sony's Blu-Ray discs are outselling HD-DVDs by as much as two to one. However, in Europe, HD-DVD still appears to have the upper hand.
About 35 European films are available on the HD-DVD format, compared with less than 10 for Blu-Ray. The larger European studios such as Studio Canal and Pathé in France, Filmax and DeAPlaneta in Spain, and Imagion and Nixbu in Germany have all announced plans to use the HD-DVD technology.
Although most commentators agree that the deciding battles in the format war will be fought in Hollywood, analysts such as Richard Cooper at Screen Digest say the importance of European independent studios should not be underestimated. European independent films account for only 30 per cent of the market in the UK, but 50 per cent in France, 40 per cent in Germany and 35 to 40 per cent in Spain.
Toshiba and Microsoft have launched a large support campaign for European Studios adopting HD-DVD.
Rodolphe Buet, head of business and marketing at Studio Canal, says: "I have met much more commitment from partners involved with HD-DVD than Blu-Ray. I met Sony in mid-2006 but the support was far below what was offered by the HD-DVD partners."
David Walstra, vice-chairman of the Europe's Blu-Ray Disc Association, admits Sony has concentrated its efforts on the US, and has felt it too early to work with European studios.
Cost is a key issue for European studios, which have smaller audiences for their films, often limited by language. They are keen to maximise their small audiences by producing for the format that has the largest installed base. So far, HD-DVD player sales have been ahead of Blu-Ray in Europe, although the launch of Sony's PlayStation 3 games console, which comes with an inbuilt Blu-Ray Disc player, may change this.
Many European film companies believe that the prices of HD-DVD players will fall faster than those of Blu-Ray players, with Chinese manufacturers expected to begin producing HD-DVD machines later this year.
The cost of production is also an issue. Normal DVD production lines can be upgraded to produce HD-DVDs, whereas for Blu-Ray, companies need to buy completely new equipment.
"A HD-DVD replication line costs about €800,000 ($1m) and you can make 40,000 discs a day on it. A Blu-Ray replication line costs €1.7m or €1.8m and you can make 10,000 to 15,000 discs a day," says Laurent Villaume, chief executive of Qol, a French DVD replication company. "The risk is just not the same."
Although Blu-Ray discs have higher capacity than HD-DVD discs, with a maximum of 50 gigabytes, many film companies say space is not as big an issue for European films. The recently released HD version of Benigni's The Tiger and the Snow, for example, fitted on to a single-layer HD-DVD without any problems.
"European films don't need so much space. Additional capacity will be needed when we produce additional content but that is years away. Italian movies will never have the kind of special effects, stunts and car chases that are used in US movies. The expense is prohibitive," says Alex Ponti, chief executive of DS DVD, an Italian DVD replication company.
Instead, European studios are interested in the fact that the HD-DVD standard – unlike Blu-Ray – mandates that all players must have an internet connection. Many feel this would be a more effective and low-cost way to provide extra features, such as discussion forums between fans and the film directors.
Despite HD-DVD's small lead, however, it is clear that the battle in Europe is only beginning. Even studios such as Studio Canal, which have a long line-up of HD-DVD releases planned, admit they could change their allegiance.
"I am totally agnostic," says Mr Buet. "All the work we are doing on high definition will be useful for making Blu-Ray discs if the Blu-Ray standard wins. It will be easy to change position."
Copyright The Financial Times Ltd. All rights reserved.
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