I think Toshiba's HD DVD will triumph over Blu-ray in the hi-def disc format war, but I also believe both formats are here to stay. Here's why:
HD DVD has a fundamental advantage in the high-def market. When people think of high definition, they think of the abbreviation 'HD', obviously. When people think of the newest and greatest disc format, they think of DVD's successor. It's obvious to such people that the product with the familiar 'HD' and 'DVD' in the title is the one they're after. With such knowledge, they can simply walk into their local electronics retailer and say, "I want an HD DVD player." I suspect they're unlikely even to think that Blu-ray is something they should be concerned about.
So, HD DVD gets the first point: its simple name makes Joe Public feel smart. He knows an HD DVD is what he wants, and he's comfortable telling a retailer, "No, I don't want a blue ray, I want an HD DVD, please."
HD DVD's significantly lower price point, both for the hardware and software, is an obvious advantage. Even knowing that both HD DVD and Blu-ray are hi-def formats, most people will pick the cheaper option. Blu-ray may have more quirky features, like the ability to pause a movie, select a product you like the look of and choose a direct purchase option so it arrives at your door the following day, but let's ask the question: "Who cares?"
I think this is an example of something that has no useful place in the market and will only be utilised by people with the means to buy items that require a film-maker's budget. It's a useless feature that's promoted as a reason to buy an expensive version of a competing product.
One of the reasons interest-free credit is so popular is because it allows people to spend more money without realising how much they're spending.
To those people who look at the the, it looks like a fantastic deal. And it is! Around £130 for an HD DVD player has to be better than a stand-alone Blu-ray player costing over £900.
These people have already spent a few hundred pounds on the 360 -- the processing power behind the drive. The drive itself is actually very expensive for what it is, but because it's being sold separately from the real hardware behind HD, it appears to be much cheaper. This is why so many people have fallen (or will fall in love) with Microsoft's extra drive -- it's an HD DVD player for a barely three-figure number.
Now, the PS3. It's a great console, on its own, and it's a great Blu-ray player, on its own. But the two are unfortunately being sold as one unit, so it costs a small fortune to buy -- £425. This hasn't appeared to put people off, but so far only the truly die-hard PlayStation gamers have bought the consoles. Ask how many of them bought the console primarily for the Blu-ray player and you'd get a very small number of people putting their hands up.
The snowball effect
The low price of HD DVD means the adoption rate will be greater. The more HD hardware sells, the lower the price will subsequently fall. Then the further price reductions will entice more people to consider purchasing HD DVD, and then the sequence starts over. This snowball effect will bring down the price of the hardware just as it did with DVD. Like with all new ventures, you have to speculate to accumulate.
Sadly, to further rub salt into the wound, Sony has said we may never see significant price cuts on the PS3 because of its high manufacturing costs. No snowball effect for Blu-ray, unless it's someone trying to roll a snowball up the hill.
Here's my shortest argument yet: the porn industry has chosen HD DVD.
One of the big advantages Blu-ray has over HD DVD is its significantly higher storage capacity: 50GB compared to HD's 30GB. However, Toshiba is now saying that adding a third layer to the HD DVD disc could bump the format's storage capacity up to 51GB. For all intents and purposes this puts HD DVD and Blu-Ray physically on the same level, regardless of price differences.
Can Sony put three layers on Blu-ray? Probably, but likely at further expense to itself and the consumer.
Adding this third layer to HD DVD may make current hardware incompatible with future discs, but this is the risk early adopters take when investing in expensive new technology. Also, so early in the product's lifespan, it is not likely to cause logistical problems because current players would just quickly be replaced without any significant price increase.
Could Sony safely do the same? Not really. The added expense may go unnoticed since Blu-ray is already a punch in anyone's wallet, but what about those hundreds of thousands of PS3s already sold? What's going to happen to them? It could be solved with a firmware update but this hasn't been confirmed. What is confirmed is that rendering first editions of the PS3 useless would upset a lot of people. It'll upset them further when they buy the Lord of the Rings trilogy on a single Blu-ray disc only to have it crash after The Two Towers because their poor PS3 can't access the third layer.
Most Blu-ray films are only shipped on 25GB discs, so it may not even be an issue. But if someone does decide to add a third layer to both disc formats, the Blu-ray guys are going to suffer more than the HD DVD guys.
No-one really likes proprietary media
What do UMD, MiniDisc and Blu-ray all have in common?
Sony introduced MiniDisc in 1992, but it never really took off as a format. It sustained decent market share for many years because of its ease of use, support from many manufacturers and because it's great for recording voice on-the-move. It was also used in the recording industry inside consumer-level multi-track recording equipment. Even radio stations used hundreds of MiniDiscs -- it was a huge time-saving medium and entire playlists could be pre-ordered on a few discs.
Sony had great ideas for the format but it never really became widely used, and then portable MP3 players took over. Digital, media-less options were favoured for the low cost and skip-free nature, plus they were even quicker to use than Mini Disc. Then the iPod came along and MiniDisc raised its white flag.
Sony introduced UMD in 2005 as the primary medium for its PlayStation Portable console, but it never really took off as a format outside the distribution of PSP games. Some argue that the price tag of movies released on the format were way higher than they ought to be. Others say that the lack of blank media and its low storage capacity for its size hindered its adoption. During 2006, media retailers pulled movie UMDs from their shelves and sold off remaining stock at ridiculously low prices. The format is now confined to PSP games.
Sony introduced Blu-ray in 2006... and so on and so forth.
Hybrid drives and hybrid discs are effectively a workaround, not a solution to the problem. LG has made fantastic strides in providing a technology that takes the stress out of choosing a disc format for consumers, but sadly it's not going to be the long-term solution. The discs themselves still require additional expense, and it's an expense many companies aren't going to want to incur.
In the short term, many people are claiming the war is over now hybrid drives exist. Indeed, DVD-ROM drives that supported DVD+ and DVD- did solve that problem, and both formats are still sold side-by-side as blank media.
People have never been made to choose between pre-recorded movies on DVD- or DVD+. DVD-R won, but was also five years old when DVD+R came along. Should they have been released at the same time, we'd be sitting here more seriously comparing the HD DVD versus Blu-ray battle to the DVD-R verus DVD+R battle in the same way we compare it to Betamax versus VHS, or if we go further back, the battle between cassettes and cartridges.
The future for Blu-ray and HD DVD
I believe HD DVD will dominate as the next-gen disc format. Prices of hardware will drop faster than prices of DVD players dropped after 2001. Triple-layer HD DVD will be used primarily in HD DVD computer drives, as a mass-storage medium. Many people will have an HD DVD player under their televisions, and a rewritable HD DVD drive in the PCs. Under-the-TV hardware may never support the triple layer because it's just not needed yet, but the more expensive PC drives will, and so the triple layer format may fit into a small market niche.
Blu-ray will follow the path of UMD, being widely used as an exceptionally versatile format for storing videogames for the PlayStation 3. Movies will sell on the format for 12 months or so, before fading away to give way to the cheaper and more widely adopted HD DVD.
Blu-ray will remain a strong competitor in the PC market, with its 50+ GB discs being used widely for computer media storage, including downloaded HD content. The content will be supported on the PS3, and will be fairly widely used. A triple-layer version of the disc may arise, offering almost 100GB of removable storage. This will be adopted much less widely, but will appeal to hardcore downloaders, backup-addicts and indie-film makers.
Both are great formats in their own right, but I think they'll walk down different paths. I will be buying an under-the-TV HD DVD box in the next six months, and a Blu-ray PC drive within the next year. I feel both formats will succeed in different ways, just as tape drives and DVDs coexist today.