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Disney Backs Sony's Blu-Ray for New DVD Format
Technology - Reuters
Disney Backs Sony's Blu-Ray for New DVD Format
Wed Dec 8,11:59 PM ET Technology - Reuters
LOS ANGELES/TOKYO (Reuters) - Walt Disney Co. said on Wednesday it would support the Blu-ray standard for next-generation DVDs backed by Sony Corp (NYSE:SNE - news) (news - web sites)., but kept open its options for a rival format championed by Toshiba Corp.
Sony, Dell Inc. and several other giants of the electronics and computer industries developed Blu-ray technology. Toshiba, with NEC Corp. and Sanyo Electric Co. Ltd., is backing a competing standard dubbed HD DVD.
The HD (high-definition) DVD and Blu-ray technologies use blue lasers, which have shorter wavelengths than conventional red lasers and allow discs to store more data, producing the clearer and sharper pictures of high-definition films and TV.
Disney said it would start releasing movies on the Blu-ray format as soon as players became available in North America and Japan, which strategic planning chief Peter Murphy said he expected in 2006.
"Everyone is looking for the right format ... to release their content. That is a combination of consumer adoption of the players and the platform, content protection, and adequate capacity. We think Blu-ray is there," Murphy told Reuters in a phone interview.
Murphy said the agreement with Blu-ray was non-exclusive and that Disney would release content in other formats if they met the studio's criteria for consumer adoption, content capacity and copyright protection.
CLSA Asia Pacific Markets analyst Carlos Dimas said the announcement could be viewed as a positive for Blu-ray, but not a slam-dunk.
"It's positive, but it has not put Sony significantly ahead of the HD DVD standard. It continues to be a contest," he said.
Disney's announcement comes nearly two weeks after Toshiba said it had won support from Warner Bros, New Line Cinema, Paramount Pictures and Universal Pictures, representing about 45 percent of Hollywood's U.S. sales of prepackaged DVDs.
Support from U.S. film studios is vital in the format battle, just as it was when the VHS standard prevailed over Sony's Betamax two decades ago.
Blu-ray also has the support of Sony Pictures and the tacit backing of Metro-Goldwyn-Mayer Inc., recently acquired by a Sony-led consortium.
It is also counting on Fox Entertainment Group Inc.'s Twentieth Century Fox, which recently joined the Blu-ray Disc Association board, but a Fox spokesman said the studio was still evaluating both formats and had not committed to either.
Assuming Fox's support and adding Disney with its market share of 17.2 percent, Blu-ray would have 47 percent of Hollywood's prepackaged DVD sales, according to industry data provided by Toshiba for the six months to June 30.
Disney said it would become the 15th member of the Blu-ray Disc Association (BDA), which promotes the format.
"This is a big step for the BDA," said Sony spokesman Taro Takamine.
Shares of Sony were boosted by the news, rising 1.05 percent to 3,840 yen by the midday break and outperforming the Nikkei average's 1.22 percent decline. Toshiba was unchanged at 444 yen.
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