Another Stupid War is About to Begin

A new war will shortly begin for the hearts and minds of people around the world. No, this one is not in the Middle East, nor is it political in nature. This war is for control of the future of the $26 billion dollar DVD market. The war is similar in nature to the battle between Betamax and VHS video tape recorders that occurred in the early 1980's. But this time the scope has widened to include not only DVD manufacturers, but Hollywood studios and computer software and hardware makers.

The war is between those folks that support the two new DVD formats that hold more data than the current DVD's...thus allowing the release of movies in the High Definition (HD) format to play on all the new HD-TV's now on the market. As we have discussed here before, the future is all about High Definition Television. By 2010, most of us will probably have them in our homes. And naturally, when you spend the big bucks to buy an HD-TV, you want HD content.

The two competing formats are called "HD-DVD" and "Blu-ray." HD-DVD was developed by Toshiba and NEC, while Blu-ray was developed by Sony. And when I say the real war is about to begin, it is because the first HD-DVD players and movies are about to be released in the next few days.

Now, like most wars, there have been in-depth "peace talks" to attempt some peaceful resolution to stop the war before it begins. But neither side was willing to give much or come to any compromise, so the peace talks are over and the outbreak of real hostilities is upon us. Interestingly enough, both sides do realize that the war is stupid and will only hurt them both as consumers will put their feet down and not purchase either type in any meaningful volumes until there is a clear winner.

As mentioned earlier, this war goes beyond the manufacturers. Now, movie studios and computers companies have lined up behind one or the other of the contenders. HD-DVD is backed by Time Warner (Warner Bros., HBO and New Line), Universal (DreamWorks), and Paramount. Blu-ray has Sony-owned Columbia Tri-Star behind them, plus Sony just bought 20% of MGM. Twentieth Century Fox and Disney have also committed themselves to Blu-ray.

For us consumers, this means that certain movies will only be available in HD-DVD versions while others will only be available in the Blu-ray disks. I ask you...does it make sense to go out and buy a Toshiba HD-DVD player when at least half of the movies on the market won't be playable on your player? Of course not! This war is pure economic idiocy. What are they thinking?

As for who will win...who knows? Both players produce excellent quality video, so that isn't an issue. Blu-ray was the leader early on and most analysts were predicting its eventual victory because it holds 25 Gb of data vs 15 Gb of data for HD-DVD. But Blu-ray has been (and still is) plagued by long delays in getting products to market. Now, the first HD-DVD player from Toshiba will be released in a few days with a price tag of $499. The first Blu-ray player (Samsung) is still months away and it is has a list price of $999. Now that is a big price difference that could easily swing the tide of battle all by itself.

The first handful of HD-DVD movie will also be released to coincide with the release of the Toshiba player. And because of the Blu-ray delays, two major computer companies have switched allegiance from Blu-ray to HD-DVD. Microsoft and HP are now squarely in the HD-DVD camp. HP will in the next few month, begin supplying HD-DVD players in their laptop computers. Some analysts say that these two defections have swung the tide of battle from Blu-ray to HD-DVD and that more defections are imminent. They might just be right as two days ago, Disney Studios now says they are strongly considering switching to HD-DVD.

In addition, if you are a Netflix customer, you can now set up your rental queue to add HD-DVD discs. And, when those titles become available, Netflix says they will not charge any additional rental fees.

The good news is that two companies, Korean-based LG and Fujitsu-Siemens say that their machines (when released) will handle both formats. But, they will probably cost more as they have to pay double royalties to the two inventors.

My solution? Sit back and watch to see who will win and wait for the prices to fall. Currently, you can buy a regular DVD player for as low as $50 and the quality is pretty darn good, especially when compared to cable TV or VHS tapes. As DVD manufacturers and movie studios realize the economic stupidity of their current stances, an eventual winner will shake out. Enjoy the ride.

If you would like to stay up-to-date with the latest news from the battlezone, I can recommend a good website:
http://www.hddvd.org/hddvd/