CES: Blu-ray, my my, is HD DVD gonna die?
For all intents and purposes, the format war is over, and Blu-ray won. The deciding factor? iTunes.
By Brian Dipert, Senior Technical Editor -- EDN, January 8, 2008
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.
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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!
(Thanks for the headline inspiration, Neil.)
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The *real* reason the "Studios" went with Blue-Ray is because of DRM and Sony's pemchant for sneaking root kits onto thweir media.
Yeah I can buy a sub $200 Blue-Ray player for my dedicated DVR...
But, do I *really* want to risk a potentially destructive and privacy destroying root kit...
I don't think so..
Mike Sr.
Michael A. Druckenmiller Sr - 2009-2-1 07:46:00 PST -
as yourself so have i believed in the power of HD DVD rather than Blu Ray. the first thing that runed me off about Blue Ray was sony itself.
as i have several sony products i never really liked the company and its products - there were almost always inferior yet much pricier than their competitiors, whether it be a DVD Player, a TV, Stereo System or Digital Camera.
Sony just does too much and as they are good in a lot of the things they are just not the best at anything. Panasonic makes better TV's, Pioneer makes better DVD players, harman kardon better receivers and canon better cameras.
Sony has turned from a world class electronics leader to a world class mediocre electronics company yet much like microsoft in the 90's have turned into sort of an evil empire of the electronics industry. there's no reason for their products to cost more.
this brings me to the war between the 2 formats. i like high def - it's awesome and i disagree that upconversion resembles HD format. the difference in picture quality was very noticeable, especially in action based films.
i purchased my HD DVD player as an Xbox add on - i got it at a Comp USA store closing for like $100 and their movies were cheaper than blu ray. i was not going to invest $400-$500 in a blu ray player or a PS3 at the time.
HD DVD seemed much more mature. it was based on DVD technology and was an offshoot of the original DVD format - sort of like a migration from one format to another. blu ray was just starting from scratch in my perception - it's different technology which makes the hardware so much more expensive and the price of movies - well also much higher!
so that's it - i went HD DVD - i made my choice - it was the natural thing to do. but for the 6-7 months that i had it i saw many more movies come out in the Blu Ray format which really annoyed me - stupid studios and their lame policies.
anyway - i gave in this Xmas and purchased a PS3 cos i wanted to play some other games.
honestly the Xbox 360 and the PS3 produce the same sound and picture - it's the same thing really - just one's microsoft and one's sony. the xbox seems much more mature and it's simpler to do things - the PS3 is an overbloated PSP.
and that was it - the last blow was CES which really got me depressed. i am presuming that very soon my HD DVD movies are going to be collectibles and that my new DVD's will be blue boxed rather than red.
Aviad Stark - 2008-14-1 23:42:00 PST -
Yes I am a HDDVD fan, they have had there act on hardware together so much better. But seeing HDDVD, BluRay, Upgconvert, I say forget them both. Save $10-$30 a movie and buy DVD's and the HQV upconvert.
IMO any minor difference you can tell is not worth the cost. If you figure you don't have to replace $$$$ of DVD's(If you really are sworn on Hi Def), you will pay for that player multiple times from the savings on your existing collection. Already own DVD, new cost $0, HDDVD or Blu Ray $25-$40.00.
Thomas Clark - 2008-13-1 10:20:00 PST -
Here is my take on the Blu-ray/HD DVD topic.
If Warner Bros were smart, and acting in the consumers’ best interest, they would have dropped Blu-ray, since the Play Station 3 which contributed to the bulk of the Blu-ray sales was mainly being sold as a game machine.
Additionally, Blu-ray may have taken a commanding lead in the next-generation format war, but the group has a big problem looming: early supporters of the format will be left out in the cold when the Blu-ray Disc Association introduces BD Profile 2.0
Unlike HD DVD, which mandated features such as local storage, a second video and audio decoder for picture-in-picture, and a network connection from the very beginning, the companies behind Blu-ray took a different approach. Initial hardware players lacked these capabilities in order to keep costs down.
None of the Profile 1.0 players can be upgraded to Profile 1.1, which was finalized recently, with the exception of the PlayStation 3 -- whose update arrived in mid-December. Likewise, Profile 2.0 is expected to arrive in October bringing Internet connectivity that Profile 1.1 players lack.
The owners of Play Station 3 units would not have had as bigger lost as the standalone HD DVD player owners. After all, it is mainly a game machine and the game software for it is not being dropped.
Then, the cheaper HD DVD stand-alone players would have really got HD player sales moving with real consumer acceptance of it for a replacement of standard DVD players. That's what the Walmart and Future $99.00 HD DVD players clearly showed (over 100,00sold in three days0. What more evidence does one need.
Rod - 2008-11-1 17:59:00 PST -
I think optical discs are dead - full stop. The CD is dead - see MP3, the DVD will go the same way. I expect to buy everything solid state in the next few years. With the price of FLASH so low why spend the money and complexity of a disc drive ?
paul corbridge - 2008-10-1 00:12:00 PST
