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Warner and its studios does all their encoding in-house
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Not entirely. A good portion of their DVD and Blu-Ray production is contracted out to other companies (and freelancers). Smaller studios, whose work is distributed by WB, often use the cheapest software available (and, in some cases, trial versions of that software). You'd be amazed how completely disorganized that part of the industry is.
Windows Media 9 (which I'm well aware is VC-1) is a great codec. I use it quite a bit for internet distribution - but it pales in comparison to the flexibility (and popularity) of h.264/avc, which I can use to encode to many more file formats. Flexibility is the keyword here, and I believe with the inclusion of "digital copies" (as Fox calls them) on Blu-Ray discs, making multiple encodes of the same movie - using a single codec - will be much easier (and cheaper), than switching back and forth.