CES: Blue-laser wars
Third-party olive branches don't (at least yet) staunch the bloody flow of words and widgets.
By Brian Dipert, Senior Technical Editor -- EDN, January 9, 2007
Format wars between various optical-storage candidates are a big deal in my editorial beat, so much so that the current Blu-ray versus HD DVD battle has prompted threefeaturearticles and a whole bunch of blogposts in the last 3.5 years. Before diving into the latest skirmishes from the in-progress CES show, let's first step back and review how the previous format war ended, as a possible model for how this one may turn out.
DVD-Audio versus SACD marked the last time that the DVD Forum grappled with the Sony/Philips alliance. Neither side ever budged; the eventual emergence of so-called "universal" players from third parties, which (at incremental bill-of-materials cost) comprehended both formats, led to a de facto détente. But the image damage had been done; neither of the high-end-audio formats came close to its backers' initial sales projections. The fact that most folks' ears couldn't discern any benefit from large audio sample sizes and high sample rates didn't help either format's fortunes, either.
Now fast-forward to the present. I've discussed on numerous occasions why I believe that most folks' eyes, specifically in conjunction with their screens' sizes, types, viewing distances, and ambient lighting conditions, won't be able to perceive the higher resolution and other potential image-quality advantages of Blu-ray and HD DVD. I also claimed one month ago that we were "a long way from the Universal Player" that would bridge the digital divide between Blu-ray and HD DVD.
I could attempt at this point to convince you that by "a long way" I meant "one month," but I won't try. However, when you see the price tag and feature set of what just got unveiled, you may decide that my prognostication still holds true. LG Electronics has announced two universal units under the "Super Multi Blue" moniker, one a standalone player and the other a PC drive. The BH100 player will be in production by the end of this quarter at the jaw-dropping price of…wait for it…$1199.
For that substantial chunk of change, you'd expect the BH100 to support not only Blu-ray and HD DVD but also conventional DVD and CD, and you'd be right—all except the CD part. That's right, an $1199 optical-disc player can't even play audio CDs, according to an article in Monday's TWICE-published CES Daily magazine, which quoted an unnamed LG spokesperson. This, even though the Broadcom chip driving the BH100 touts audio-CD support. And oh, by the way, the BH100 also doesn't support picture-in-picture or any other enhanced HD DVD features, either.
The GGW-H10N Super Multi Blue PC drive, which will also ship by the end of this quarter at "under $1000," doesn't exhibit the inherent limitations of its standalone counterpart because it relies on PC-based software to implement the various Blu-ray and HD DVD playback functions. It also supports the burning of single- and dual-layer Blu-ray media, along with writeable CDs and DVDs—but not writeable HD DVDs.
The prices for both the BH100 and GGW-H10N are significantly higher than their single-format alternatives. For example, a TigerDirect advertisement email yesterday listed Samsung's first-generation Blu-ray player at $599.99 and a Lite-On Blu-ray burner drive at that same price. Toshiba's first-generation HD DVD player is now running around $400, and while I couldn't extract an exact price for the newly introduced SD-H903A HD DVD burner (PDF) from the Toshiba representatives I had breakfast with Sunday morning, they assured me that it would significantly undercut Blu-ray alternatives.
The other détente announcement, from Warner Studios, is less earth-shaking. The company, along with Paramount Studios, has to date released movie titles in both blue-laser formats. Warner has apparently figured out, and per an invitation in my email inbox will later tonight night explain in more detail, how its unified "Total Hi-Def" disc can comprehend both the Blu-ray and HD DVD formats. I suspect this will occur via a similar approach to the one taken by DualDisc, which fuses a two-channel audio CD image on one side of the disc and a DVD-Audio or DVD-Video image on the other.
Total Hi-Def pricing details, either absolute or relative to the standalone Blu-ray or HD DVD alternative, aren't known at this point. Also unknown are any capacity impacts of the dual-format inclusion; with early DualDiscs, the audio CD image delivered only around 60 minutes of playback time versus 74 minutes for a conventional audio CD (this limitation was later eliminated).
Finally, I'll be sure to ask Warner representatives about any potential player incompatibility issues. Again referencing the DualDisc experience, both the audio CD layer's thickness (thinner than Red Book Audio CD specifications) and total girth (thicker than a CD) precluded DualDisc's successful use with some playback equipment. I see Total Hi-Def as an inventory simplifying win for Warner and, depending on how the company prices it, an acquisition-simplifying win for consumers as well. But because Warner is already straddling both formats, Total Hi-Def doesn't cast a solid vote in either direction.
Hostilities continue
Meanwhile the verbal potshots and unveiled products from the Blu-ray and HD DVD camps continue at a furious pace, with no sign of either the compromise or concession that would put an end to the incompatibility craziness.
First, let's look at HD DVD. Sunday night at the Microsoft keynote, Bill Gates and Microsoft president Robbie Bach revealed several interesting tidbits:
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Microsoft has to date sold 10.4 million Xbox consoles worldwide, seemingly meeting the company's earlier projection of 10 million units sold by the end of 2006. The reason I've emphasized "sold" will soon be apparent.
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Without providing specific sales statistics, Bach proudly proclaimed that the company is making as many HD DVD peripherals for the Xbox 360 as it can, and that the drive continues to sell out at retail.
An HD DVD Promotional Group briefing (PDF) later that evening further fleshed out the format story. "As of January 5th, there are estimated to be more than 175,000 HD DVD players sold in North America," proclaimed the press release, encompassing both standalone players and the Xbox 360 peripheral. And by the end of 2007, HD DVD promoters predict that in North America, they'll have an installed base of "more than 2.5 million players." Low-cost Asian manufacturers such as Alco, Jiangkui/ED Digital, Lite-On, and Shinco have joined the HD DVD fold.
And in the latest iteration of spec one-upmanship, HD DVD developers are working on tri-layer media which, via a combination of an added storage layer and denser per-layer capacity, will enable 51-Gbyte discs—1 Gbyte bigger than Blu-ray's current dual-layer capacity.
Toshiba's press briefing provided additional HD DVD details. On top of the second-generation $499.99 HD-A2 and $999.99 HD-XA2 players, unveiled last September and now in production, the company has added an intermediary $599.99 HD-A20 model, slated to ship this spring. And in North America alone, Toshiba plans to single-handedly ship (and hopefully sell) 1.8 million players this year.
You gotta believe the Blu-ray camp won't take HD DVD's challenge lying down, right? In fact, just to show you how many different ways it's possible to cut a given set of data, the Blu-ray gang claims (in promotional vehicles such as a 28-page glossy piece of propaganda being vigorously passed out at the show) that it has already won the format war. The linchpin of the Association's argument is the PlayStation 3. Although analysts believe that Sony only shipped (and, pragmatically, sold) around 250,000 PS3s in the retail channel in time for Christmas, the Blu-ray Association now touts more than 1 million units shipped in North America. And in Japan, Blu-ray reportedly has captured 96% of the HD player market.
Although some readers of might think I have a vendetta against Sony, that's simply not true. The company had a rough 2006, mind you, but its brand is still in amazingly solid shape, and many of the products it designs are best-of-breed. With that said, Sony sometimes makes it hard for me to be impartial. Notice the emphasis on shipped in the previous paragraph, versus sold in the earlier Microsoft data? With the PS3, Sony's playing the same numbers game (pun intended) it has long played with the PlayStation Portable. Shipped to the retail channel does not automatically equate to sold to customers (unless you're Nintendo, at least at the moment, that is).
As I've recently pointed out and others have also noticed, the grey market for PS3s on Ebay and elsewhere has collapsed. Initial resale price premiums are no longer attainable and, as a result, folks who stood in line to buy once-rare PS3s are now returning them to point-of-purchase for refunds. PS3s are readily available (albeit with occasional, brief sellouts) at online outlets such as Amazon, Best Buy, and Circuit City, as well as in bricks-and-mortar stores, where numerous reports on Digg and elsewhere indicate burgeoning inventory stockpiles.
I've long suggested that a $500 or $600 consumer-electronics device, even one as feature-rich as the PS3, is unpalatable to the vast majority of consumers. The market reaction to the PS3 is proving me right.
To that point, neither Blu-ray nor HD DVD is the clear winner at this time, in my mind. Toshiba's latest players, you'll note, are also $500 or higher in price. And recently collected data by the Consumer Electronics Association, albeit with unclear statistical significance, backs me up. As published in the January/February issue of the CEA's Vision Magazine, the Association recently surveyed a group of consumers (sample size unreported), whose technology-enthusiast categorization was evident in the fact that 85% of them were already aware of one or both of the next-generation, high-resolution optical formats. Before presenting the data, I'll re-emphasize that these are enthusiasts, presumably with much higher-than-average probability of pulling out their wallets each time some cool new tech toy appears.
|
Price point |
Percentage of enthusiasts surveyed who would buy a high-definition DVD player |
|
$1000 |
2 |
|
$750 |
3 |
|
$500 |
8 |
|
$300 |
28 |
|
$200 |
60 |
|
$100 |
76 |
Granted, the PS3 is an atypical candidate. It offers both Blu-ray playback and other features (gaming, browsing, playback of other multimedia, Linux support, etc) at a comparable price to a dedicated player, because it's subsidized by what Sony hopes will be vigorous, profitable future game-title sales. But it's still at or above the price threshold where, the above data suggests, any double-digit percentage of consumers will vote with their dollars.
Toshiba's current players are, in effect, costly embedded PCs, and the PS3 is similarly complex. Blu-ray players are lower cost, at least with respect to their semiconductor content, but with notable feature tradeoffs. The semiconductor suppliers are poised to help both camps' causes; an earlier writeup pointed out some of the vendor options available at the time I wrote it, and in a conversation with Sigma Designs' Ken Lowe at lunch yesterday, he claimed it was basically a two-horse race between his company and Broadcom for both Blu-ray and HD DVD sockets.
Add another horse to the race, though. At a briefing yesterday afternoon, STMicroelectronics repeatedly reiterated its focus on the blue-laser-playback market with the newly introduced Sti7200, which has a dual-stream decoder that enables PIP (picture-in-picture) capabilities that Blu-ray currently lacks. And further to the pricing issue, remember that the Xbox 360 HD DVD peripheral is $199.99 or less. Now revisit the data in the table above. Of everything I've seen from anyone in either the Blu-ray or HD DVD camps, Microsoft's product approach still makes the most sense to me. Those 10.4 million Xbox 360 owners either already are or will soon be ready to scratch the next inevitable tech-consumption itch, and a sub-$200 HD DVD add-on is a compelling candidate.
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Fawad, I did, in my follow-on writeup a few days later: www.edn.com/blog/400000040/post/1540006354.html
Brian Dipert - 2007-16-1 06:23:00 PST -
It's interesting to note that no one mentioned what impact the Adult Entertainment Industry's adoption of HD-DVD will play in the future of the HD Disc wars.
Fawad Qadri - 2007-15-1 14:29:00 PST -
First, let me say I work for Microsoft so please consider this in that context.
Second, Bill, it is good to run into you here :). As if we don't argue enough on AVS Forum. Anyway, as you know, your comments about Meridian are wrong. They are 100% behind HD DVD. Here is their official statement:
"International CES 2007, Las Vegas, NV, January 11, 2007—Leading British audio/video manufacturer Meridian (South Hall 1, Booth 20538) is pleased to make the following statement to clarify the situation regarding reports on its involvement in HD-DVD.
“Meridian is a company renowned for state-of-the-art digital audio and video technology, and we are delighted to be working with Microsoft on the development of high-end players. Meridian has for some time been deeply involved in some of the core audio technology in HD DVD and at CES 2007 we are pleased to announce that we have now joined the HD DVD Promotional Group."
No high-end company has blessed BD. That should tell people who they believe produces the best picture quality and has a reputation they want to be associated with.
Third, I agree that BDA once again declared themselves a winner. But like last year, they will be proven wrong again. This business is not about announcements or claims. It is about delivering good product and great value and letting the customer decide who is the winner. We have done this with HD DVD and will continue to do so.
Forth, there was no real news at CES for BDA. Sure, their studios announced titles but that is what they were supposed to be doing all along. In contrast, HD DVD announced a number of new CE companies such as Onkyo, Lite-On, and Meridian adopting HD DVD. We announced partnership with Broadcom for reference platform for a lot more companies to do the same. And the fact that some 40 studios/distributors worldwide publishing in HD DVD. We also announced having 600 titles by year end.
Fifth, one of your exclusive CE companies, LG, decided to support HD DVD. This is big news as it is going to lead more companies from BDA to support HD DVD. Instead of being fearful, they can just follow in the shadow of LG. If LG, who knows all about BD plans and prospects feels that it must support HD DVD, one can reasonably assume that BDA’s declaration of winning the war must not be based on real facts.
Sixth, alliances can change overnight. A studio executive could decide to support HD DVD and have titles in store next month. In sharp contrast, you can not solve the manufacturing problems of BD format overnight. Some 8 years of research has not yet yielded a reliable process for making BD-50 discs. And even production of BD-25 is limited as evidenced by Adult industry not being able to use BD format at all, because only a few companies can produce them and they are unwilling to publish their content. So they have thrown their support behind HD DVD.
Seventh, HD DVD dwarfs BD in the area of dedicated players. Toshiba alone ships more than all the BD companies combined. Reason is simple and what Brian mentions. Namely, value matters. Toshiba players routinely sell in the $350 range and for that price, you get a great upsampling DVD player and of course, ability to play the superb image quality of HD DVD. In contrast, there is nothing in that price range from BD companies.
Eighth, HD DVD players and titles have so much more functionality. Every HD DVD player ships with networking built it. Every player ships with Secondary video decoder so that you can have real Picture in Picture (PiP). Every player decodes advanced audio codecs such as Dolby Digital Plus and 5.1 TrueHD lossless audio. Every player ships with persistent storage so that you can have bookmarks, downloaded trailers or additional languages. In contrast, not a single stand-alone BD player supports all of these features.
Ninth, essentially all HD DVDs use VC-1 advanced video codec as opposed to ancient MPEG-2 codec used in many BD titles. With proven quality, people can buy HD DVD titles without waiting first for reviews of BD titles as is commonly the case.
Tenth, HD DVD studios have been far more committed to the format than BD studios. Look at how Universal published King Kong last year and Sony did not do so with Spiderman. Makes you wonder which studio really believes in these formats.
Net, net, BD is still struggling to catch up to HD DVD in functionality, user satisfaction, quality of the A/V experience, ease of manufacturing and most importantly, value. So if you want to declare yourself the winner, be our guest. We want nothing better than you all overestimating your success in the marketplace :).
Amir Majidimehr - 2007-13-1 09:57:00 PST -
Bill Sheppard, while I certainly appreciate your postings on my various blue laser format writeups, I think it would behoove you to reveal that you're an upper-level manager at Sun Microsystems (I strongly suspect you're THAT Bill Sheppard, although I don't know with absolute certainty). Since Java-based interactivity is at the core of Blu-ray, you're not exactly an impartial observer and analyser, are you?
And on that point, what of the BD-J based title 'The Descent' that both Samsung's player and the Samsung-developed, Sony-relabeled player are currently UNABLE to play? Why shouldn't I conclude that other pending BD-J titles will have similar problems, fixable only when the Blu-ray camp rolls out the same consumer-unfriendly firmware upgrades that you were so critical of when Toshiba implemented them on the HD-A1?
I appreciate everyone's feedback on my writeups, very much so. I have three fundamental opinions that guide my analysis on this market;
a) that very few consumers will be motivated to pay an incremental pricetag for a high def version of a title they're interested in buying, esp if they don't already own a high def player
b) that they're even LESS motivated to re-buy a high-def version of a title they already own, and
c) that very few consumers will be motivated to buy ANYTHING $500 or higher, regardless of its degree of functional integration, unless it's a full-blown computer (and note: the PS3 is NOT a computer in consumers' eyes).
So I agree that the HD DVD camp needs to secure more studio backing in order to win big going forward. But I don't think the initial PS3 sales surge is sustainable without a significant price drop on the console, thereby muting the Blu-ray camp's arguments. And if ANYONE'S going to buy a high def drive in significant numbers (which again is unclear to me given points a) and b) above), it's someone who's already bought an Xbox 360 and is therefore looking at a fairly palatable $200-or-less upgrade.
At the end of the day, I think that we're seeing the beginning stages of a replay of the DVD-Audio versus SACD wars. And yes, the ultimate winner will probably be high-def downloads. See why I'm so closely following the fiber deployments?
Brian Dipert - 2007-13-1 07:59:00 PST -
NPD Numbers for year-end 2006 came out. According to NPD, which
only reports USA sales, not worldwide sales, and doesn't include Wal-
Mart in their reporting, PS3 sold just under 700,000 units from Nov.
17th to Dec. 31, 2006.
According to NPD, PS3 sold 687.3 thousand units.
So it is likely the PS3 has sold somewhere in the neighborhood of
800-850 thousand units in North America in those two weeks, since,
as I mentioned before, NPD doesn't report Wall-Mart sales or Canada
and Mexico. By the time you wrote what you wrote about Sony's one
million units being shipped, not sold, they likely sold them, since
supply issues have been worked out and there is now stock in the
stores.
NPD reports Xbox 360 sold 4.5 mm units in the same time period, but
the HD DVD Forum admitted they've only sold a little over 175,000 HD
DVD drives, a number which includes standalone players and computer
drives as well.
If we say that 100,000 of those units (more than half, which seems a
bit much to me, but will do for our purposes) were XBox 360 add-ons,
we see that the tie ratio between the 4.5 million Xbox 360s and the
add-on unit is very small, almost to the point of being trivial at 45:1
compared to the impact of the built-in Blu-ray player of the PS3, which
of course has a natural tie-in ratio of 1:1.
The 360s HD DVD drive really isn't going to have an impact compared
to the trojan nature of the PS3 with numbers like that. I think Toshiba
should be looking at alternate strategies if they want to survive. They
cannot hope that Microsoft is going to bail them out with the XBox 360
add-on.
Add-ons for gaming consoles do not have a history of great tie-in
numbers. In fact, in the history of gaming consoles, add-on
peripherals are usually failures.
They need the studios. When nine out of the 10 top grossing films
from 2006 are on Blu-ray, and six are exclusive to the format, where
as only 1 of those films are exclusive to HD DVD, they show the
weakness of the format. The same goes for the top 10 movies of all
time. Only one is HD DVD exclusive, (E.T.) and seven are Blu-ray
exclusives. If they don't get some studios to switch to support both
formats, they are doomed long-term. Toshiba can't make their own
movies, so they need to start making deals. I only hope they aren't too
late now.
They need and advertising and marketing plan that makes sense, and
they need to put the dollars behind it. They have failed so far. You
have to make people want to make the effort to pick one of these
things up. Only the PS3 offers that sort of "trojan" purchase. People
have to actually want an HD DVD player to buy it.
Toshiba could still pull this out, but the more the Blu-ray camp looks
like a huge co-op of the all the big manufacturers and studios as one
big, happy unified force, (like they did at CES) and the more HD DVD
looks like Toshiba and Universal's proprietary format against the world,
with Microsoft in the background pulling the strings, (although we
know Microsoft's ultimate goal is no disc format at all in the future) the
worse it looks for HD DVD.
Pari Barnes - 2007-12-1 00:36:00 PST
