EC Grills Hollywood Film Studios on High-Def Format Choices

The European Commission has asked major Hollywood movie studios to provide information about their choices of high-definition DVD formats as part of an informal examination for the possibility of antitrust activity.

The two competing standards -- HD DVD and Blu-ray Disc -- have each won exclusive support from different studios, causing concern that antitrust regulations may have been violated.

"I can confirm that we requested such information from the major studios in the context of fact-finding by the European Commission about possible discrimination towards certain formats," Jonathan Todd, the European Commission's spokesperson for competition, told TechNewsWorld.

Still Informal

No formal investigation has been launched so far, Todd added. That question will be decided after the collection of further information.

Todd declined to provide further details about which studios have been contacted, but noted that the studios have until Friday to respond. The EC sent out letters in June, he added, noting that the commission is undertaking this effort on its own initiative.

This new shift in focus onto the Hollywood studios follows the European Commission's launching of its broad inquiry into the competing formats last year. In August it began with inquiries directed at the Blu-ray and HD DVD originating groups, which are led by Sony (NYSE: SNE) and Toshiba, respectively.

Blu-ray Ahead

Both high-definition formats are designed to offer better quality than traditional DVDs, but which one to support is a decision faced by both consumers and producers.

Among the movie studios, Blu-ray appears to be in the lead, as it has gained the support of every major studio except Universal Pictures, which has committed to HD DVD exclusively.

Meanwhile, Blu-ray gained another vote recently from Blockbuster. After tests that found consumers with a choice rented Blu-ray discs more than 70 percent of the time, Blockbuster announced in June that it would be supporting the Blu-ray format in all its stores.

Toshiba lowered its sales target last month for high-definition DVD players and recorders because of disappointing sales figures in the United States.

Déjà Vu

The choice between Blu-ray and HD DVD is reminiscent of the one consumers faced years ago between VHS and Betamax, but so far, few consumers have committed to either format. Only about 105,000 homes have purchased Blu-ray players to date, compared with about 150,000 homes that have chosen HD DVD players, Tom Adams, president of Adams Media Research, told TechNewsWorld.

Of course, Sony's PlayStation 3 also supports Blu-ray, and there are about 2 million of those in consumers' hands, Adams added. However, few consumers use those devices to play movies, he said.

High definition will ultimately take over the market, Adams noted, but it will take some time. "Between the two formats, we're expecting that half of U.S. homes will have a high-definition player by 2012," he said, including game devices such as the PS3.

'Inevitable Evolution'

For the movie studios, "there is not a great deal of urgency," Adams added, since titles released in high-definition format currently bring in a fraction of what the traditional DVD versions earn.

"We're talking hundreds of thousands of dollars so far, or maybe a million for a big title, compared with a hundred million on traditional DVD," he said.

Nevertheless, "this is an inevitable evolution," Adams concluded. "It's still very early on."