Pali: Sony (SNE)'s Blu-Ray Wins DVD War; Hollywood Loses

Pali Research’s Rich Greenfield has good news for beleaguered Sony (SNE) boss Howard Stringer: His company’s Blu-Ray format will win the next-gen DVD format war. The bad news for Hollywood: The existing DVD business is in permanent decline, and the next-gen format won’t help anytime soon — if ever.

Rich predicts (reg. required) that the costly format war between Sony and Toshiba/Microsoft (MSFT) will end in 2008, when Time Warner’s (TWX) movie studios stop supporting the HD-DVD format, forcing NBC ‘s (GE) and Viacom’s (VIAB) studios to fall in line. But Hollywood was counting on this format war getting resolved years ago so it could replace slowing conventional DVD sales.

Now, Rich says:

Even with a single next-gen format by mid-2008, we still believe consumer spending on DVD sales will be down about 3% in 2008 compared to 1% in 2007…With the DVD “halo” gone and digital distribution still in its infancy, studios need to make profitable movies; catalogue will no longer save them (particularly, as we suspect most consumers will not be re-buying their existing catalogue in next-gen DVD, soon-to-be-known, simply as Blu-ray.

Update: Nice call, Rich.

Don’t miss a minute of SAI! Sign up for our free daily email newsletter here (no SPAM), or add our real-time RSS feed to your reader.

Followup: Stringer: US Economy Down; Sony Sales Up

Related: Transformers Director:  I Hate MSFT, HD-DVD, Again
Sony’s Stringer: Forget Blu-Ray. I Want A Time Machine

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.