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HD DVD: Ding, dong, the disc is dead

Toshiba has publicly admitted what everyone already knew: Sony's Blu-ray has won the high-definition DVD format war. But how much does the victory mean, with high-def downloads gathering steam?

By Brian Dipert, Senior Technical Editor -- EDN, 2/19/2008

One month and eleven days ago, I called it, and today Toshiba made it official. The company's throwing in the towel on HD DVD, thereby contractually freeing its various partners (Microsoft, and studios such as Paramount and Universal) to embrace Blu-ray and, by ending the format war, propel the high-def, blue-laser, optical-disc market into full stride.

Blu-ray versus HD DVD is a struggle, and a conclusion, that business schools will use as a case study for decades to come. To wit, how did the combination of bundling a Blu-ray drive within a next-generation game console and forging partnerships with (and making substantial "loyalty" payments to) key movie studio and computer partners (such as Dell) enable Sony to surmount an arguably superior format competitor? After all, HD DVD, as an evolutionary technology, had the inherent advantage of embracing and leveraging red-laser DVD's on-hand technology and manufacturing maturity.

This format finale is one that few would have imagined several years ago. Hewlett-Packard had defected from the Blu-ray-only ranks. The PlayStation 3 was expensive (both absolutely and relative to its Xbox 360 and Wii competitors), late to market, and cost-strapped by its Blu-ray inclusion. And the whole idea of a game console that also played movies as a "Trojan Horse" to get Blu-ray into the living room seemed archaic. Granted, it'd worked for the PS2 with respect to its red-laser DVD drive. But this was a different era:

1. The evolution from VHS tape to red-laser DVD proved substantially more compelling than the subsequent jump from DVD to either blue-laser optical-disc alternative
2. The HD DVD camp had its own game console "Trojan Horse," the Xbox 360 bundled with a drive peripheral accessory, and
3. In the red-laser DVD days, no format war compelled consumers to keep their wallets in their pockets, thereby voting "no" on both candidates.

Plus, of course, Sony was having substantial bigger-picture fiscal problems beyond the gaming division. To the company's credit, it remained stubbornly committed to its anointed format, in no small part by making the tough decisions to repeatedly "de-feature" the PS3 in order to reduce the console's bill-of-materials cost (and therefore price). As a result, Sony will collect lucrative patent-license royalties for years to come.

This has got to feel like sweet vindication to oft-criticized CEO Howard Stringer, and it represents the first time since the audio CD (in partnership with Philips) that Sony has scored a major format victory. Remember:

1. JVC's VHS surmounted Sony's Betamax,
2. Toshiba acquired the bulk of the patents (and therefore the royalties) for the red-laser DVD, and
3. Nobody won the DVD-Audio versus Sony-developed SACD format war (except for digital downloads, that is).

Perhaps the wisdom of Sony's 1989 acquisition of Columbia Pictures Entertainment and subsequent purchase of MGM in 2005 is now fully apparent. Never before, to the best of my recollection, has the synergy between content and hardware under a single corporate umbrella been so compellingly played out.

So what's Toshiba's plan now? Not clear. Atsutoshi Nishida, Toshiba's president and CEO, noted in the company's press release, "We carefully assessed the long-term impact of continuing the so-called 'next-generation format war' and concluded that a swift decision will best help the market develop." But Toshiba didn't state that it would directly participate in the Blu-ray market going forward, and frankly, its former competitors might be cool to offering it (timely) license access to the Blu-ray patent pool. Instead, the press release specifically lists a number of other developments that Toshiba hopes to harness:

Toshiba will continue to lead innovation, in a wide range of technologies that will drive mass market access to high definition content. These include high capacity NAND flash memory, small form factor hard disk drives, next generation CPUs, visual processing, and wireless and encryption technologies.

Congratulations, Sony. I've certainly been critical of you at times in the past, but your shrewdness and long-term-view perseverance with respect to Blu-ray are rare and impressive. However, your ultimate success has yet to be determined. With Apple TV and a host of other online high-def content delivery schemes (both currently in existence and soon to come) contending for consumer mind-share, how big will the Blu-ray ecosystem end up being?

I'll certainly keep a close eye on developments in this area. Readers, how are you calling the optical disc-versus-online race, both near- and long-term?

Author information

Senior Technical Editor Brian Dipert covers mass storage, multimedia (audio, displays, 2-D and 3-D graphics, and still and video imaging), and PCs and peripherals. You can find him in his blog, Brian's Brain.

He offers this link to explain the allusion in this column's headline, my pretties, for you and your little dogs, too!