A shotgun marriage for Blu-ray and HD DVD?

More than any other factor, slow sales for movie players may help the two sides overcome irreconcilable differences.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
3 min read
The key number in the battle between the Blu-ray and HD DVD camps is 250,000.

That is the number of players for both formats that the Computer Electronics Association has said likely shipped in 2006, the first year of global sales. Earlier, the organization had anticipated 750,000 players would ship for the year.

Consumer fears about buying the wrong piece of equipment--combined with high prices and other factors--have crimped sales of the next-generation movie players and prompted the beginning of a thaw in the standards battle. Earlier this week, for instance, South Korea's LG Electronics formally announced it would release a combo Blu-ray/HD DVD player after months of flip-flopping on the issue. It plans to provide details on Sunday, the eve of the Consumer Electronics Show in Las Vegas.

Component manufacturers such as NEC and others have begun to prepare parts that could be used in combination players. Hitachi, which has announced a Blu-ray camcorder, said in October that it wants to look at the issue again.

Meanwhile, Time Warner has said it will promote an alternative format, called Total HD, that can be used in either Blu-Ray or HD DVD players.

"There have been gradual signs of a thaw from the hinterlands," said Stephen Baker, an analyst at NPD Techworld. "Sales have not met expectations. Even the early adopters, who you would think would storm the beaches on something like this, have said 'Ehhh. I'm not going to do this.'"

Blu-ray and HD DVD are high-definition, high-density optical disks. Blu-ray disks can store more data, which will allow studios to add more behind-the-scenes information, say backers. HD DVD advocates, however, say their technology better leverages the DVD infrastructure. Thus, the players will be cheaper.

Taking sides
Sony, Philips, Panasonic and others back Blu-ray. Microsoft, Intel and Toshiba back HD DVD.

Various studios have lined up behind one format or the other. Some have agreed to support both, but the customer confusion angle continues to exist. Consumers have to remember to buy a particular disk for their particular format.

Make no mistake: the arguments and competition continue. Last month, Sony Electronics President Stan Glasgow said that combination players can be technically difficult to design and that a combination player would likely be prohibitively expensive.

In October, Kazuhiro Tsuga, an executive officer at Matsushita, which backs Blu-ray, characterized the possibility of a combo player as "stupid," largely because of the high price tag such a device would have.

Engineering one-upsmanship aside, combo DVD players will likely be costly, at least initially. Standard Blu-ray players cost $600 or more, and HD DVD players go for $400 or more. The lasers used in Blu-ray players also remain in tight supply. That limitation played a role in Sony's PlayStation 3 shortage as the game consoles--which contain a Blu-ray player--went on sale late last year. A combo player would have duplicative or more specialized parts and thus cost even more.

Another factor adding cost is royalties. Manufacturers that build combo players have to pay fees to both the Blu-ray and HD DVD organizations. Although LG has said it will ship its combo player in the first quarter, it won't reveal the price until Sunday, a spokesman said.

The Total HD disc likely faces similar barriers to acceptance. Studios would have to agree to adopt it and many have already invested in Blu-ray or HD DVD.

Still, history shows that resolving standards issues helps sales. The DVD world had to contend with different recording standards. Sales for recordable DVD drives accelerated and prices declined after multiformat technology emerged.

A lingering standards war would also likely create more headaches than normal for consumers. PC makers are starting to bundle the drives with computers and, predictably, many are taking sides.

As a result, some consumers may not want to buy a particular brand of PC because the manufacturer supports Blu-ray and the consumer owns an HD DVD player, or vice versa. Returns and customer service calls would become inevitable.

NPD Techworld's Baker, though, added that not all of the problems can be attributed to the standards war. Many of the early high-definition players have had problems. Many potential customers also have older TVs still that can't showcase the benefits of the new players.

"This has been a difficult transition," said Baker.