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Old 01-12-2008, 08:09 PM   #1
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"For all intents and purposes, the format war is over, and Blu-ray won."



Before Xmas when HD-DVD was on sale I saw alot of people buying them. I thought to myself, poor souls don't even know what is going on, all they see is a cheap HD player.

http://www.edn.com/article/CA6517962...&rid=608624453

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In the death-match between high-definition optical-disc formats, I'll admit upfront that my personal preference always leaned towards HD DVD, though I strived not to let this penchant unduly distort my coverage. This was not, mind you, because of any affinity for Toshiba/Microsoft, or conversely because of any aversion toward Sony/Sun. Rather, when I looked at the primary contenders as an engineer, I saw that HD DVD was the more evolutionary of the two. It leveraged already established and proven red-laser DVD technology, and it also leveraged existing red-laser DVD manufacturing facilities.

Blu-ray, by contrast was the more revolutionary of the contestants. I never disputed that fact. And yes, that meant that it delivered a higher per-layer storage capacity as a result. However, again looking at the situation as an engineer, "revolutionary" equals "risky," potentially leading to both schedule push-outs and cost overruns. And, although I acquiesced to Sony's point that higher per-layer capacity meant less likelihood that content-rich console games would spill over into a less desirable multidisc configuration, I felt that advanced video codecs like H.264 and VC-1 would enable a one- or two-layer HD DVD to deliver more than enough capacity for a feature film, plus extras.

You may have noticed by now that I'm using the past tense. That's because for all intents and purposes, no matter how much Toshiba might strive to keep up a positive face (note to Toshiba's execs; re-announcing players that you've been shipping for months doesn't count), the format war ended last Friday...in my humble opinion, of course, and subject to revision based on discussions I have in the coming days at CES (don't I sound like a politician?).

That's when we learned that Warner, the only major film studio previously releasing content in both formats, will be a Blu-ray-only backer beginning in May. This leaves Paramount (on a time-limited contract basis) and Universal as the only studios in the HD DVD camp. For how long is anyone's guess.

I saw this coming several months ago, when Toshiba started pushing player prices consistently below $200 (and even below $100 in some model close-out cases). Toshiba's hardware partner, Microsoft, began exhibiting the same behavior with its Xbox 360 HD DVD player peripheral. Why would Toshiba make such a move, when its Blu-ray player competition was at least twice the price? Why, indeed, unless the company was desperate to build up an installed base for HD DVD as rapidly as possible in order to cajole a major studio into not defecting from its camp? As I've said over and over again, in this format war, content is king. And the studios, therefore, hold all the negotiating cards.

So why did Warner go format-exclusive? One word: iTunes. The format war had turned into a stalemate. Red-laser DVD sales were flattening and, according to some analysts' reports, beginning to decline. With respect to DVD's high-def descendants, consumers were keeping their wallets in their pockets. And, particularly if video demand got stuck at the standard-definition (i.e. relatively small file size payload) level, online distribution had the potential to quickly become a substantial threat to lucrative optical disc sales.

Warner saw the fiscal damage that Apple and the iTunes Store had done to the record labels; my goodness, the power balance situation is so bad that folks are taking seriously the rumors that Apple's about to start its own record label! And Warner saw that this same trend was beginning to financially cripple the television networks. Does anyone seriously think that NBC is going to stay away from iTunes forever? The last thing Warner wanted was for the iTunes steamroller to crush it next. So it had to get off the fence, choose sides, and thereby encourage consumers to move forward into the high-def optical disc future (an evolution, I might add, that's particularly timely given that the NTSC-to-ATSC transition is scheduled to be complete in a bit over a year's time).

And if Warner needed to go format-exclusive, why did the company go with Blu-ray? Aside from the likely substantial payoff the studio received, you mean? The HD DVD camp may have sold almost 1 million players (including Xbox 360 add-ons) in 2007, but Sony sold 1.2 million PS3s from November 23 to December 31, in the United States alone. And Blu-ray has held an approximately 2:1 media-shipment lead over HD DVD, month after month, since this war started. Yes, "free disc" promotions constituted a percentage of those shipments, but both camps played that game.

And true, not every PS3 bought for gaming is also going to be a Blu-ray playback candidate, especially as Sony and its partners (presumably, eventually) finally assemble a decent game-title suite. But at least some of those PS3s will do double-duty. Maury Wright's son, an avid gamer, convinced him to bring a PS3 home for Christmas. I'll be curious to hear about any arm-wrestling over the TV that might occur in the future.

It's perhaps useful to keep in mind that this war, like all past format wars, has been fought on numerous fronts, but that fundamentally, it's about future royalty streams. Sony and partner Philips' patents constituted a substantial chunk of the CD pool, and both companies substantially profited from the situation. When red-laser DVD came to the forefront, it was dominant patent holder Toshiba's turn in the fiscal spotlight. Is it any surprise that the blue-laser battles pitted Sony against Toshiba?

And on that note, I'm still betting that Blu-ray's seeming eventual victory will end up being a hollow one. Both camps have splurged a tremendous amount of money to date: in technology development and manufacturing ramp, in player hardware and software development, in player production ramp, in movie-studio "financial accommodations," and in retailer and end-user promotional campaigns. How long, and at what equipment and media-run-rate assumption, will it take for Sony and its partners to recoup this substantial upfront loss? Will they ever?

To that point, remember that format uncertainty is only one reason that consumers haven't migrated to HD optical discs. As I 've (seemingly) pointed out innumerable times, a high-quality, upscaling, red-laser DVD player can output a picture virtually indistinguishable from its "true" high-def Blu-ray or HD DVD counterpart. How low will Blu-ray player and media prices need to go in order to force the DVD-to-HD transition? How much incremental financial impact will that additional price pressure incur?

And remember, red-laser DVDs aren't the only standard-def video content that's capable of being upscaled. With Apple (likely) poised to add rental capability to its online movie distribution service, are the studios' attempts to shore up their optical disc business a case of too little, too late?

The topic of blue-laser optical disc formats is an always-controversial one, and my past prose has generated no shortage of feedback and other comments. I trust, dear readers, that you'll not let me down this time, either. I look forward to your responses!
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Old 01-12-2008, 08:31 PM   #2
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Meh.. it's never over. They will sign some exclusive deals on something you or I want and make things tough. bah!
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Old 01-12-2008, 08:37 PM   #3
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ya blu-ray won since paramount switched to blu-ray im glad too but i think until it get's cheaper to make a blu-ray disc regular dvd is the best for right now
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Old 01-12-2008, 08:49 PM   #4
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Originally Posted by ArturoC View Post
Meh.. it's never over. They will sign some exclusive deals on something you or I want and make things tough. bah!
like motha fuking Halo. have fun playing that on a Sony made P.O.S.

i'd buy a blue ray player if it came in the xbox, but not from sony. and my HD tv with HD DVD's on my xbox360 is AMAZINGLY clear and i love it. cant imagine how anything could be better.
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Old 01-12-2008, 08:58 PM   #5
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... and my HD tv with HD DVD's on my xbox360 is AMAZINGLY clear and i love it. cant imagine how anything could be better.

Yeah. I doubt anybody could tell the difference if any. The only real difference between the two formats is the storage density. Bluray can store more data per disc. No biggie.
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Old 01-12-2008, 09:00 PM   #6
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Yeah. I doubt anybody could tell the difference if any. The only real difference between the two formats is the storage density. Bluray can store more data per disc. No biggie.
ya, like a DVD doesnt hold a whole movie

blue ray. i'll keep my money and be happy with what i got. and the best game in the world plays great on my xbox.
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Old 02-06-2008, 01:22 PM   #7
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Old 02-06-2008, 01:48 PM   #8
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fluff piece from the microsoft camp to stall. 80% of all players on the market are upgradeable through firmware updates :/:
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