Executives hoping that the weak consumer embrace of high-definition discs will strengthen during the holiday season thanks to clarity on format and hardware issues suddenly face this rude awakening: It’s the economy, stupid.

The format war is over, hardware prices are falling and studio marketing efforts finally are taking hold with retailers. Yet the economic downturn has become a chief reason for fearing that holiday sales of Blu-ray Discs will prove more naughty than nice.

Hollywood is counting on Blu-ray — winner of a bloody format with now-failed HD DVD — to become the next-generation format of choice for home entertainment, compensating for a DVD cash cow that’s starting to run a bit dry. But consumer concern about the worsening economy couldn’t have spiked at a more inopportune time: the cusp of the holiday gift-buying season.

“The economy is the biggest challenge, because there are just so many pieces to the Blu-ray puzzle that consumers face,” said Lori MacPherson, GM of domestic home-entertainment at Disney. “You need the high-definition television set, you need the player, you need the cables, you need the software . . .”

MacPherson still believes Disney’s seasonal slew of new releases and catalog titles in the Blu-ray format will help stir previously resistant consumers to check out the HD format. But industry colleagues participating in a panel discussion Tuesday at the HD3 conference in Century City agreed that the onset of recession won’t help.

“The economy is hitting everybody,” said Danny Kaye, executive vp research and tech strategy at Fox. “But we still look forward to a great fourth quarter.”

If that sounds a bit like whistling past the HD graveyard, it should be noted that there also are distinctly positive bits of news on the home entertainment horizon.

“I know the economy is tough right now, but the manufacturers are really bringing down the price of their HDTV sets,” Paramount vp marketing Chris Saito said.

Blu-ray player prices also are heading south, though perhaps not as quickly a recession-minded consumers might like. Although several manufacturers are flirting with the $200 price point long considered key to platform launches, most Blu-ray players still sell for considerably more.

Then there are the discs. Movie releases on Blu-ray sell for upward of $25, whereas most DVDs retail for $15 or less.

“We’re all constantly looking at (disc) pricing,” Sony vp business development Rich Marty said. “What it amounts to is that we’ll wait until after the fourth quarter and see how it goes.”

Blu-ray backers can take heart in the relatively modest negative impact of economic downturns on tech rollouts, said analyst Tom Adams of Adams Media Research in Carmel Valley, Calif.

“It may slow adoption down a little bit if there’s a recession brewing,” Adams said. “But in the adoption of other successful technologies over the next 50 years, it hasn’t been more than a speed bump.”

In any event, Blu-ray proponents shouldn’t panic over the prospect of a longer slog toward broad consumer embrace than some might have hoped for, Fox’s Kaye said. “It never happens overnight,” he shrugged.

Contrarians have suggested the spread of HDTV sets might not prompt a corresponding rush to Blu-ray if consumers opt instead to boost DVD image resolution via so-called upconverting technology. But those kind of image manipulations fail to match Blu-ray standards and won’t pass muster with the majority of consumers, MacPherson said.

Dell is bringing the big screen to the PC screen, making it easy for users to build a personal digital library of their favorite Hollywood blockbusters.

Dell and Sonic Solutions have teamed to make downloading and recording DVD movies easy with the first PC-based Qflix™ drives. Using an intuitive application, Roxio® Venue, movie collectors can search and select from a variety of major Hollywood hits available from CinemaNow, download them on their PC, transfer them to multiple digital devices in their home, and then create a permanent and portable DVD-format copy on Qflix DVD media.

(EON)

It’s hard to imagine now, but when DVD first launched, its success was far from guaranteed. Back in 1996, there were even anti-DVD fanboys, and recently we ran into a rant–sarcastically retitled as “Why DVD would fail”–that struck us as eerily familiar to the current arguments against Blu-ray. Considering that DVD was such a huge success, it’s worth looking at exactly how similar the two formats are at this early stage, and what that means for the future of Blu-ray.

(CNet)

In the DVD industry, flat growth is exciting because it means you’re not dead yet. But alongside the growth of on-demand movies and the increasing irrelevance of buying a shrink-wrapped box, there’s something of value that’s getting left behind: DVD extras and special features. And that’s a shame, but it’s also an opportunity.

(NewTeeVee)

The movie-rental service Netflix Inc. is closing a small unit that finances independent movies, partly to avoid competing with Hollywood studios with which it partners for DVD and Internet distribution.

The financial impact on the company will be small, and only four out of about 400 employees are losing their jobs.

(Associated Press)

Six major Hollywood studios have agreed to place antismoking public-service announcements on all DVDs of new, youth-oriented films featuring tobacco use.

The agreement — signed onto by Sony Corp.’s Sony Pictures; General Electric Co.’s Universal Studios; Time Warner Inc.’s Warner Bros.; Viacom Inc.’s Paramount Pictures; Walt Disney Co.; and News Corp.’s Twentieth Century Fox — runs through the end of 2009. It comes after years of lobbying by antismoking groups against the glamorization of tobacco use in Hollywood movies.

(Wall Street Journal)

You may be itching to buy a Blu-ray DVD player now that the format has won the high-definition disc standard war, but you may want to hold off a bit before scratching that itch. By waiting a few months, you could save yourself some irritation - and a few bucks to boot.

(Sydney Morning Herald)

Blu-ray may have won the format war, but hasn’t won over many consumers.

Now was supposed to be the boom time for the young video technology, pitched as a high-definition replacement for the DVD. In January, consumer electronics company Toshiba dropped support of rival format HD DVD, ending a competition over which technology would take root in living rooms.

Both technologies were designed to take advantage of the picture resolutions offered by new, high-definition TV sets with a level of image quality that the standard DVD is not capable of producing. The new players for both technologies can also play DVDs, and each format uses media that look like the same silver discs movie fans have been popping into their DVD players for years.

But both require users to upgrade their movie collections and buy the more expensive new discs if they want to enjoy the benefits.

(The Star)

Pornography is too graphic for the Blu-ray disc player because it may be too graphic even for the porn industry. Over the years it seems that x-rated material has seen distribution over just about every possible medium but it may just be that the Blu-ray disc player is just too real for the industry.

The problem is that the Blu-ray is so realistic, it’s almost like being there. In magazines and on video cassettes, the industry found that not every wrinkle was visible and the little imperfections were more hidden. Not with Blu-ray, even taking steps like camera angles and lighting effects still reveal more than the “artists” want to reveal. Little things like razor burn and other imperfections still stand out.

Instead the industry will be using the HD-DVD format because it’s not quite as good graphically as the Blu-ray. One of the other reasons is that Sony has stated that in keeping with a longstanding policy, it would not mass-produce pornographic videos on behalf of the movie makers. That will also slow down the industry a little bit. But some wonder if either format might be a little too real for the typical viewer.

The x-rated industry has stated that there will be no porn DVDs for the Blu-ray disc player, so does this spell the doom of the Blu-ray?

Disney has revealed details on the kind of features it plans to incorporate in the next generation of Blu-ray Discs.  A new technology known as “BD Live” will open up Internet connectivity options and other advanced features, of which Disney is apparently poised to take advantage.

To date, confirmed BD Live capabilities have been picture-in-picture video features, online polls and downloadable content.  Those are all features that the now-defunct HD DVD format had from day one.  But now Disney is expanding that technology to new horizons.

(TG Daily)