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titles and free up shelf space as title formats are combined onto one disc, we<br />

encourage a one-format platform. THD appears to be the best solution for retailers<br />

and consumers in the near term, to eliminate consumer confusion and fear of<br />

purchasing a player for using the eventual losing format. We view it as a solution,<br />

and so fundamentally this wasn’t done to try and create a new revenue stream.”<br />

The disc will store Blu-ray content in one side and the HD DVD version of the “same<br />

content and features” in the other side, with both sides capable of carrying dual<br />

layers, a feature demonstrated at the show, it will be made by replicators of the two<br />

formats, and will be the only high-def version that Warner will be releasing.<br />

Warner Home Video commented that the cost of manufacturing the product “isn’t<br />

going to be materially more” while consumer motivation in buying a player (on either<br />

format) increased due to the peace of mind that their movie choice will play<br />

regardless of the playing hardware.<br />

The price was not disclosed, but was indicated that will not be “prohibitively<br />

expensive”.<br />

Warner mentioned that Warner Brothers, New Line, and HBO will start doing THD<br />

discs in 2H07, instead of their HD DVD and Blu-ray disc releases, “Title names and<br />

pricing will be announced closer to the release dates” they said. THD is expected to<br />

motivate other studios.<br />

Licensing fees would have to be paid for both organizations as if the discs were<br />

manufactured in the two different formats.<br />

Format Market Penetration – CES 2007<br />

The HD DVD Promotions Group announced a projection of 1.8 million players sold<br />

within 2007, and that objective was considered “a minimum target”.<br />

Yoshihide Fujii, Toshiba Digital Media Network CEO and chairman of the International<br />

HD DVD Promotion Group, declared at CES:<br />

“If our resolution for 2006 was to bring HD DVD to the early adopter, then our<br />

resolution for 2007 is to bring it to the early majority.”<br />

In supporting that<br />

forecast Mr. Fuji<br />

mentioned that HD DVD<br />

studios plan $600<br />

million in HD DVD<br />

revenue this year, and<br />

he anticipates almost 50<br />

million <strong>HDTV</strong>s installed<br />

in consumers’ homes in<br />

the same period, 1.8<br />

million US players of<br />

that total is a<br />

reasonable forecast for<br />

the size of next-generation DVDs.<br />

249

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