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Amazon.com (Nasdaq: AMZN) and Microsoft (Nasdaq: MSFT) have come together to launch the 1,000 Indies Project, in which the online retailer will sell independent films in the HD DVD format via its CustomFlix DVD on Demand service.
The venture, according to Microsoft, is designed to lower the barriers to entry for filmmakers to produce and distribute movies in the HD DVD format by providing free authoring and setup services for as many as 1,000 selected indie titles.
"This collaboration with Microsoft is a great opportunity for independent filmmakers to reach Amazon customers with their films via the HD DVD format," said Peter Faricy, vice president of music and movies at Amazon.com. "By working together with Microsoft and leveraging the proven CustomFlix DVD on Demand model, we can lower the barriers to entry for independent filmmakers and dramatically increase the selection we offer our customers."
Joining the two companies, the Sundance Channel will review the high-definition features for possible broadcast on the pay-TV network. The channel has also committed to making its own original eco-series in high-definition, "Big Ideas for a Small Planet," that will also be available using the CustomFlix service.
Customized HD DVDs
CustomFlix, a subsidiary of Amazon.com, is a technology through which HD DVDs, DVDs and CDs are produced and shipped as they are ordered. Consumers trigger the automated process when they purchase a movie using CustomFlix. After purchasing the film, it is then burned onto a disk and any accompanying packaging is also produced at that time. The newly made disk is then shipped out.
The boon for independent filmmakers is that it greatly improves the cost structure for independent filmmakers by eliminating the need for costly inventory. They also get the benefit of using Microsoft's VC-1 HD DVD encoding technology and authoring innovative interactive scenarios with HDi, said Amir Majidmehr, corporate vice president for the consumer media technology group at Microsoft.
"From a technical standpoint, we found that the HD DVD format fits our business model perfectly," said Dana LoPiccolo-Giles, cofounder and managing director of CustomFlix. "With retail 
shelf space at a premium, our model eliminates the risk of carrying inventory and immediately expands the number of great HD DVD titles available to consumers."
Another Salvo
Blu-ray, a high-definition disc format backed by Sony (NYSE: SNE), lately appears to have been winning the lion's share of skirmishes in the high-def format wars, in part due to the inclusion of the player in the PlayStation 3 video game console, James McQuivey, a Forrester Research analyst told TechNewsWorld. In addition, Sony was able to straddle the line between consumer equipment manufacturer and movie studio to convince all but one of the major film studios to exclusively release their films on Blu-ray.
"They are the one player that is both a movie studio and a manufacturer," McQuivey pointed out. "They were able to speak the language of both sides. So they were able to get more manufacturers and more movie studios."
For Amazon, one reason behind their decision to go with HD DVD over Blu-ray was that authoring HD DVD is much cheaper than Blu-ray. More technology is needed to create the manufacturing line for Blu-ray disks than for HD DVD, Joshua Martin, a Yankee Group analyst told TechNewsWorld.
"It's completely different than standard DVD, and HD DVD is only a little different. With HD DVD you can use the same infrastructure, just change some of the parts," he explained.
However, Martin does not believe that the project will do much to boost the HD DVD format. "I don't think it really does a whole lot. If the big blockbuster movies aren't doing enough to resonate with consumers, independent films that have a small or niche audience wouldn't be compelling enough for consumers to pick one format over the other or even upgrade to that format at all."
The deal between Microsoft and Amazon.com is yet another episode in the tit for tat battle between the HD DVD and Blu-ry formats, which is really between the Toshiba/Microsoft camp and Sony, Van Baker, a Gartner (NYSE: IT) analyst, told TechNewsWorld. Last week, Blockbuster announced that it would expand its offerings of Blu-ray discs rather than the HD DVD format. With Amazon, however, it appears HD DVD has won the battle.
"Given Sony's struggles with PS3 sales , this could be a protracted battle, and that favor HD VOD over either physical media format," he explained. "The longer the battle goes on the less relevant both formats become."
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