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I’m glad the format war has ended. It means a slight return to sanity for consumers wondering how to spend their dollars at the check out counter. It certainly goes a long way toward the everyday consumer adopting an HD disc-based format. According to an analyst at ABI research the end of the format war was not the true measure of consumer demand when it came to the choice of HD format. The true decision was made by Warner brothers decision to jump ship to Blu-ray. The decision to switch may have been principally decided not by which format the consumers of Warner’s preferred, but by a nearly $120 million payoff from Sony. That payoff created a signal that retailers like Wal-Mart and rental companies like Netflix followed. Consumer sales did not overwhelm one side or the other. Consumers didn’t receive a benefit or feature that made one format superior to another. A simple back room corporate deal seems to have ended the war. This is not how a consumer demand driven marketplace should work.

“Consumers spent [only] about $170 million on high-def DVD in 2007 and Fox, for one, is hoping that jumps to $10 billion in 2008,“ noted ABI Principal Analyst Steve Wilson.

It seems very unlikely to all concerned that a jump in sales will equal $10 billion in that short period of time.

“Consumer spending on DVD sales and rentals was pretty flat in 2005 and 2006 at about $22 billion. It dropped last year for the first time, by about 3 percent,“ Wilson said today. The studios really need the new high-def format to catch on so they can drive revenues back up,“ said WIlson.

That may be what the end to the war may really be all about. Movie studios saw the general interest in DVD began to wain and concern over what impact a format war would have made them eager to end it quickly. It seems they have a winner now and this may or may not be the choice the consumer wanted.

Read [Beta News]

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