Next-gen DVD war could be messy--or not

At the fourth annual DisplaySearch HDTV: The Future of Television conference here, analysts, HD DVD and Blu-ray manufacturers, retailers, studio executives and software makers offered different theories as to how the format competition between HD DVD and Blu-ray will play out.

Ross Young, founder and president of DisplaySearch, the conference host, said both formats and their respective camps of supporters "appear ready to slug it out long term."

But Jim Taylor, senior vice president of the advanced technology group of Sonic Solutions, a maker of DVD-authoring software, speculated the conflict could end in "detente."

There are currently four next-generation DVD players available--three HD DVD and one Blu-ray. However, the next six scheduled for release are all Blu-ray. In the first six weeks of sell-through for each formatted player, 33 percent more HD DVD players units were sold than Blu-rays. However, Blu-ray player sales resulted in 42 percent higher revenues, according to DisplaySearch.

The Blu-ray format, which can pack seven hours of video content onto a single-layer disc, has the support of seven major Hollywood studios, 11 consumer electronics companies, four major IT companies, and leaders in the gaming and music industries, such as Electronic Arts and Vivendi Universal.

A single-layer HD DVD has four hours of playback, which is double the capacity of a standard-definition DVD. The format has the backing of five movie studios, but only Universal and The Weinstein Co. exclusively.

Naturally, HD DVD and Blu-ray backers are rooting for their own side to emerge as victor in the next-generation battle as it begins full force this fall and holiday season when more movie titles and players are released. But all sides agree: as high-definition TVs become more popular, consumers will want HD content that will make the investment worthwhile. As screen sizes increase, so does the need for better resolution.

The declining growth in the DVD market, which peaked at 20 million units sold in 2003, means the market is "ripe for a technology transition," said Young.

But are consumers ready? Sonic Solutions' Taylor believes the transition will be relatively smoother than the change-over from VHS to DVD. Since consumers are already familiar with DVDs, and as they see the increased quality of the picture and level of interactivity, choosing to switch to either HD DVD or Blu-ray will be an easier process than the switch to round, shiny DVDs from clunky plastic videocassettes.

Eisuke Tsuyuzaki, vice president of Panasonic R&D Company of America, said the adoption will be quicker due to the nature and speed of today's media, which is viral and ubiquitous. Video enthusiasts, analysts and news outlets will speed adoption rates of next-generation formats more quickly than 30 years ago, he said. Panasonic is due to release its first Blu-ray player in the U.S. in September, and Tsuyuzaki believes Blu-ray will be the ultimate format winner.

However, there are several factors that could slow the adoption of the new DVD format, chief among them the presence of two competing formats. "It won't be an overnight transition," Taylor of Sonic Solutions warned. An example of the detente he mentioned would be the rise of a dual-format player, a drive that supports both HD DVD and Blu-ray.

The format duel, all seem to agree, will be decided first and foremost by content. Consumers will choose their preferred format based on what movie they've been dying to rent or buy. Mark Knox, adviser to the HD DVD Promotion Division for Toshiba America, said he expects 200 HD DVD film titles by 2007. Sony anticipates adding to its roster of 20 current Blu-ray titles soon. The titles, not the technology, are what attract consumers. As Taylor put it, "People go to buy 'The Matrix' or 'Finding Nemo' (because of the title), not because they like a particular data rate or disc capacity."

Tsuyuzaki of Panasonic rejects the format war hype, particularly comparisons to the Betamax-VHS battle of the late 1970s and early '80s. The world, and especially media, have changed, he insisted.

One of the most marked differences is the philosophy of today's next-generation formats. HD DVD and Blu-ray are duking it out "to create an HD world" that works on consumer electronics hardware, IT and any other devices.

"I have no doubt (the next-generation format) will take off," said Tsuyuzaki. "The question really is can we create a healthy market and quickly...There will be kinks, but it will be fine."