Media Wonk

Why are Iger and Murdoch dissing Viacom? - September 19, 2007

I assume Disney chairman Bob Iger and News Corp.’s Rupert Murdoch are kicking themselves because their studios did not get the same kind of pay-out from the Blu-ray camp that they accuse Viacom of taking from HD DVD.

Speaking at a Goldman Sachs investor conference in New York Tuesday, Murdoch blasted Viacom for dropping Blu-ray and embracing HD DVD exclusively (at least for the next 18 months).

“Paramount switched out the other day. God knows why,” Murdoch said, according to Daily Variety, which added, “then he said, essentially, that he did know why--a $100 million payout to DreamWorks Animation and a $50 million check to Par.”

Iger didn’t put a number on it in his remarks but was even harsher in his criticism of Viacom.

“We believe it's a no-brainer that the industry should be behind Blu-ray,” Iger said, adding, “We haven't taken any money [to choose Blu-ray] because we think it's far and away the best business,” Iger said.

Once upon a time, of course, Disney didn’t think it was such a no-brainer. The studio actually owns a piece of the IP in HD DVD, having collaborated with Microsoft to develop the HDi interactive layer used in the Toshiba format before changing its mind (God knows why?) and embracing Blu-ray.

At one time, moreover, nearly all the major studios were looking for cash to sign up with one format or another.

News Corp. has never wavered in its support of Blu-ray, once it decided to go that way, but Murdoch’s stated reason for Fox’s decision is a little hard to credit.

“The public is going to want Blu-ray,” he said. “The public can tell the difference.”

The public may decide it wants Blu-ray, but it’s unlikely much of it can really tell the difference between the formats.

Both use the same encoding formats, both can output at the same resolution and each is as likely as the other to be connected to a 720p HDTV set, which is incapable of displaying the players’ full-resolution anyway.

If anything, HD DVD is apt to look better to the consumer overall, at least for the time being.

More HD DVD releases are encoded in VC-1, which some experts claim is superior to the older MPEG-2 format more common on Blu-ray releases. HD DVD’s interactive capabilities have been available from the start, while Blu-ray is still wrestling with different “profiles” and incompatibility between some discs and some players on interactive features.

HD DVD players are also significantly less expensive, again, for now.

Blu-ray may have greater long-term potential than HD DVD, as its backers claim. But consumers today can tell the difference?

Not so much.

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