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Wednesday, July 04, 2007
Europe Raises Antitrust Concerns Over Blu-Ray, HD DVD

The ongoing competition between Blu-ray and HD DVD to secure Hollywood's support, has been the focus of the European Union's antitrust regulator, who has asked studios to turn over information about their negotiations with the developers of high-definition DVD formats.

The European Union's antitrust regulator sent letters to the studios last month, trying to establish whether they have restrictive agreements to use one or the other of the standards, according to a report published on the The Wall Street Journal on Thusday. The regulator gave studios time to respond until the end of this week.

Blu-ray is supported by every major studio except Universal Pictures, which is backing HD DVD exclusively. Five studios are exclusive to Blu-ray: Sony Pictures Entertainment, Walt Disney Co., Twentieth Century Fox, Lions Gate Entertainment Corp. and MGM, which is owned by a consortium including Sony. Viacom Inc.'s Paramount Pictures and Time Warner Inc.'s Warner Bros. are backing both.

However, according to the DVD Forum representatives, the commission's recent letter to the studios, signals a shift in focus to the studios and possibly Blu-ray specifically. The Commission had also raised concerns about some studios, regarding statements made at the Consumer Electronics Show in January in Las Vegas about the exclusivity of studios to Blu-ray. Back then, the BD Association announced that the "HD format war" already had a winner (Blu-Ray), a statement based on the results of research provided by the "Understanding and Solutions" research company for Europe.

"Despite their comments at CES, we are still living," a DVD Forum representative told CDRinfo. "The specific EC letter is addressed to the Blu-Ray side," he added.

The HD DVD camp has been reportedly lobbying the commission to draw attention to Blu-ray's tactics, according to people familiar with the situation.

The Blu-Ray Disc Asssociation has not commented on the situation yet.

The battle between Blu-ray and HD DVD is expected to reach fever pitch in the fourth quarter of this year. Both the Blu-Ray and HD DVD camps have recently lowered the prices of their HD players, while free HD movies have also been offered with each HD player purchase. The Blu-Ray side has recently gained the exclusive support of the Blockbuster film rental firm.

On the other hand, the Blu-Ray format has been recently hit by reports about consumers who have bought Blu-ray movies incompatible with some currently available BD players, as well as other issues related to Blu-Ray discs that became unplayable after a short period of time. The latter was described by the online community as "Blu-Ray rot", directly linked to a similar situation reported many years ago for the movie titles released on the LaserDisc format. Theroritically, acryl, used in the BD Disc cover layer, could prove weak against humid environments. The Blu-Ray disc has a very thin cover layer of just 0.1 mm. Therefore, moisture could easily go through the cover layer and influence the recording layer. However, the specific incident could be considered as isolated, and the existence of such a problem could not be proven, at least not until further inverstigation occurs.

The HD DVD camp could also have another weapon against the Blu-Ray side. The incompatibility issues reported by consumers with the new interactive BD movie discs and BD players on the market. Though the BDA does not yet provide any disc verification activities for BD movies (due to lack of finalized specifications), these issues could also raise antitrust concerns.

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