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High-Definition DVD Wars Take Shape

BY Admin  January 8, 2006 at 5:00 PM EST

A Consumer Electronics Show in Las Vegas in early January showcased several high-definition products and gave the public its first glimpse of the battle lines being drawn between coalitions of major electronic manufacturers.

The momentum behind the conflict is a push to bring the home theater experience up to speed with the booming high-definition television industry. A 2005 Gallup Poll revealed that about 22 percent of Americans own a high-definition television, and that number is expected to climb as the costs of the sets fall.

The standard DVD-player uses a red laser to read the digital content on a plastic disc. High-definition DVD players substitute a blue laser that will read the data on eight micro-thin layers piled on top of each other. Blue lasers have a shorter wavelength than red lasers, meaning the player can read more densely packed data on a disc with the same dimensions as the regular DVD.

The massive storage capacity (up to 50 gigabytes) will allow manufacturers to present more content on one disc. Additionally, the improved technology will translate to a denser and finer screen image, providing the opportunity for even greater detail on high-definition television sets.

The two formats are incompatible with each other, but both would allow standard DVDs to play on high-definition players.

Even though they operate similarly, there are notable differences between the two formats. Blu-Ray is thought to have a larger capacity than HD-DVD, but the latter will be cheaper for manufacturers and consumers. High-definition DVD players are expected to cost between $500 and $1,000 retail.

The Blu-Ray consortium is led by Sony Corp. and includes fellow electronics companies Panasonic, Phillips and Samsung. Computer giants Apple and Dell also have committed to developing Blu-Ray technology. Sony owns entertainment companies Columbia/Tri-Star and MGM. In addition, 20th Century Fox and Disney have partnered with the Blu-Ray group.

Toshiba leads the group behind HD-DVD, and has major partners in Intel and Microsoft. Microsoft’s near dominance of operating systems for PCs gives the HD-DVD consortium the bargaining power to convince PC manufacturers to support the HD-DVD format. According to sources speaking with EETimes, Microsoft may be dangling financial incentives to PC companies that accept the HD-DVD software with the next generation operating system Vista. Hewlett-Packard recently announced it would no longer exclusively support Blu-Ray and would back the HD-DVD format as well. Dell, meanwhile, continues to fully support Blu-Ray.

Hollywood studios Universal, Paramount and Time Warner have already begun announcing DVD releases for HD-DVD.

Meanwhile, at the Consumer Electronics Show in Las Vegas, Toshiba unveiled a variety of HD-DVD players and announced it would be shipping 10,000 players per month to be on store shelves by March. Panasonic, Phillips and Pioneer also have publicized plans to release Blu-Ray players this summer or earlier.

The high-definition format wars also are playing out in the video gaming market. The expected 2006 release of Sony’s PlayStation 3 has been a significant point of leverage in convincing other companies to join the Blu-Ray group. The video gaming console, lauded to be more powerful than IBM’s famed DeepBlue computer, will play Blu-Ray DVDs.

Conversely, Microsoft’s XBOX-360, released late last year to capitalize on the holiday shopping season, is not HD-DVD compatible. At the CES, however, Microsoft announced plans to release an add-on optical drive so that gamers also can watch HD-DVDs on the console. No specifics regarding price or release dates were announced.

Some experts are calling the entire showdown a waste of money and technology, citing the growth in Internet downloads and video-on-demand. Comcast, with over 20 million subscribes, already offers thousands of movies and television programs to subscribers, and DirecTV’s 12 million customers may soon have a digital video recorder as part of their subscription. According to a poll by Starz Entertainment Group, 60 percent of those who use video-on-demand services are buying fewer DVDs.

Recent sales figures indicated that total DVD sales are not rising at the rates of a few years ago, according to the Digital Entertainment Group.

Sales of DVDs in 2005 rose 5 percent to $16.3 billion, the industry trade group said, a sharp slowdown from 33.6 percent the year before.

“While they fight, Rome is burning,” Robert Heiblim, a consultant to electronics companies, told the New York Times. “High-definition video-on-demand and digital video recorders are compelling, and people will say, ‘why do I need [a high-definition DVD player]?’”