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Sony’s Blu-ray Wins DVD ‘Format War’ over Rival Toshiba

February 19, 2008 at 6:40 PM EST
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Toshiba said Tuesday that it would stop developing its own high-definition DVD player, known as HD DVD, leaving the market to Sony's Blu-ray format. The Wall Street Journal's technology columnist explains the move and its likely impact on consumers.
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TRANSCRIPT

JIM LEHRER: And now a victor emerges in the battle over high-definition DVDs. Ray Suarez has our story.

RAY SUAREZ: After a long battle between Sony and Toshiba over the growing market for high-definition DVDs, consumers found out today they will have one choice available, the Blu-ray format made by Sony.

Toshiba’s decision to surrender that market to Blu-ray came after a number of major movie studios, retailers and the movie rental company Netflix all announced recently they would only carry Sony’s format for high-definition DVDs. Retailers said both technologies have been competing to offer consumers a sharper picture.

KEN SICKMEN, Owner, Belmont TV: Both the HD DVD disc, which is produced by Toshiba, and the Blu-ray disc produced by Sony, are high-definition discs which are 1080 lines of resolution compared to a normal DVD, which is around 480 lines of resolution. So it’s about two-and-a-half times the resolution.

As far as the comparison of HD DVD to Blu-ray, both of those formats are the same resolution and the end product, in terms of picture quality, are virtually the same.

RAY SUAREZ: So given that, why did Sony win this war and what does it all mean for consumers? Walt Mossberg, personal technology columnist for the Wall Street Journal, is here with some answers.

And, Walt, you write about this stuff for a living. If we’d fired up the competing systems on two side-by-side TVs, could you tell which was which?

WALTER MOSSBERG, Wall Street Journal: No, and neither could anybody except the most devoted videophile, Ray. And so this was not a consumer rebellion or a consumer decision as to who won this war.

This was really decided by the two ends of the distribution chain, the people that make the content — that is, the Hollywood studios who were wooed heavily by Sony and Toshiba, and in the end more successfully by Sony — and the distributors, the stores, like Wal-Mart and Target and services like Netflix, which were also heavily wooed, and they eventually came down on the side of Blu-ray.

But, really, their interest overall, I think, was to get something decided, because my advice to my readers — and I think the advice of most other reviewers — was to stay out of it until these guys settled it. And so the sales weren’t so great.

Winning support from studios

RAY SUAREZ: For a long time during this three-year process, both of them had their champions. One had a line-up of movie studios on its side. Blu-ray had another line-up on its side. What allowed Sony to pull ahead and finally win this thing?

WALTER MOSSBERG: Well, they flipped one of the big studios, and I think it's, in fact, the one that does the greatest number of discs, which was Warner Studios. And when Warner flipped -- and they did it very dramatically on the eve of the consumer electronics show in January, which is the consumer electronics industry's biggest event of the year -- they flipped.

When Sony got them to flip and commit to Blu-ray exclusively, I think that set off a chain of events, which in a relatively short time allowed a number of other dominos to fall and led right up to today's announcement that Toshiba was withdrawing its competing format.

RAY SUAREZ: Now, for people who haven't been following this closely...

WALTER MOSSBERG: Which is most people.

RAY SUAREZ: ... which is most, it should be stressed that these were not interoperable. You couldn't play a Blu-ray disc on an HD DVD machine and vice versa.

WALTER MOSSBERG: Absolutely right, and that was the problem. A couple of companies made machines that could play both, but they were extraordinarily expensive.

But you're right: These were two different technologies aiming to achieve the same goal. And that goal was to take a disc that to the naked eye looked like a CD or a DVD but could hold enough material to actually show you a movie or television program in high-definition, which requires more capacity for the higher resolution that your piece described.

And so they had two different approaches. At one point, they had negotiations about merging it, but they didn't. And there was no advantage to -- they each had a few features that the other didn't have, but really there was no fundamental advantage for consumers.

And so the public was -- except for hard-core videophiles, the mass public was sitting this out and waiting for this to get sorted out.

Meanwhile, Ray, regular DVD sales have plateaued and even dropped off a little. And, as you know -- and I think many viewers know -- the movie industry makes a ton of money from DVDs. So they were getting nervous about not being able to move on because we had this war going on.

Effect on consumers

RAY SUAREZ: Well, there were hundreds of millions of standard-def DVD discs out there. Will they play on the Blu-ray machines?

WALTER MOSSBERG: Yes, they will they play on the Blu-ray machines. They are backward compatible, and the HD DVD ones were, as well.

RAY SUAREZ: What about the million or so -- what marketers call early adopters -- who bought HD DVD and now have the machines in their home?

WALTER MOSSBERG: Well, you know, there's a danger to being an early adopter. And particularly when you know -- and I'm sure many, if not most of these folks are savvy enough to have known there was this format war going on.

And I wouldn't be surprised -- I'm not aware of this yet -- but I wouldn't be surprised if there were some lawsuits and some attempts to return some of the equipment and say, "Hey, you promised me that you were going to win, or that you were at least going to be viable for a long period of time."

RAY SUAREZ: Well, as far as you know, is anybody going to continue to produce content on HD DVD?

WALTER MOSSBERG: Well, I don't know about anybody, but I don't think any of the major movie studios are likely to continue to produce content in HD DVD given what we've seen.

And, you know, it's possible you could have HD DVD drives used in computers for data or something like that, but I think it's basically over. And it's unfortunate for the people that spent -- particularly the ones who spent money for an HD DVD player before the prices started dropping, because some of those folks paid, you know, $600, $700.

Competition from downloading

RAY SUAREZ: Well, the last clash of the formats, VHS won over Betamax, and had a pretty good run, over 20 years. Now that Blu-ray seems to have surpassed HD DVD, is it going to have a sizable market to itself for a long time?

WALTER MOSSBERG: Well, I think it will, but not for a long time, in terms of the success of VHS tapes and then the success of CDs and DVDs, which were measured in decades. I don't think this high-definition disc that is going to be Blu-ray now has decades of dominance ahead of it, and the reason is digital downloading.

This is something the other disc formats and tape formats in the past didn't have to cope with. There's a new way -- that's just getting started, I admit, but which I think will pick up steam -- there's a new way for people to get television and movies and all these things in HD. And that's downloading to their computers and other devices.

RAY SUAREZ: Walt Mossberg, thanks for joining us.

WALTER MOSSBERG: I'm glad to be here.