The Melee Over Movies
A dreaded format war is looming over the next generation of DVD players like the ghost of Betamax past. But now it seems this battle might actually benefit high-definition-TV fans long stymied by the lack of decent programming for their eye-popping sets: The competition could force the new disk players to plunge in price faster than any previous home electronics product has.
On one side of the battle is Blu-ray, named for the blue-colored laser in the machine that makes it possible to store much more data on a disk than the red laser used in today's DVD players. On the other is HD DVD. Both offer the same quality of crisp, high-definition picture, though Blu-ray offers more memory space for additional clips and extras.
But Blu-ray and HD DVD devices can't play each other's disks. Sony is backing Blu-ray, while Toshiba is pushing HD DVD. This standoff echoes the 1980s videocassette recorder fight between Sony's Betamax standard and the more open format of VHS, a dispute that slowed the sales of movies on videotape for years until VHS finally won. "We've seen these format wars before, and they're a pain," says Bjorn Dybdahl, whose San Antonio store had demonstration models of both new DVD flavors. "I just wish one would go away."
This time, Sony--which lost with Betamax--has the upper hand. Blu-ray recently gained momentum when it won the support of MGM and Warner Bros., meaning five of the six major Hollywood studios endorse Sony's standard. Only three studios are backing HD DVD, and only one of those--Universal--is exclusively committed. "The studios have decided the war is over," says Richard Doherty, a research director at Envisioneering Group, and Blu-ray has won. So HD DVD appears to be on the ropes in the entertainment arena.
Bargain battle. That's where things get juicy for consumers. Toshiba's best hope is to grab the market first, and HD DVD players are expected to go on sale early next year, several months before Blu-ray's. Reports suggest Toshiba might flood the marketplace with cheap players, using Chinese manufacturers to conquer market share before Blu-ray can even get its boat docked. "It will accelerate the flight to the bottom [of prices]," says Ted Schadler, a market analyst at Forrester Research. "That's just crazy for manufacturers."
But it's great for consumers. Cheap labor at Chinese factories drove down the price of DVD players, which now can be found for less than $30. The first HD DVD players will still be expensive, at $1,000. The first Blu-ray player, meanwhile, will be built into Sony's PlayStation 3 game console, due sometime next spring at an unannounced price.
All of the next-generation devices will also play old-style DVD s. "We expect DVD s to be around a long time," says Andy Parsons, a Blu-ray spokesman and Pioneer Electronics executive. DVD s, by the way, emerged after the same adversaries hammered out a last-minute compromise on a compatible format. But talks to unify on a high-def format broke down and don't appear likely to resume. At this point, a single standard would also mean a delay in getting players out, and neither side wants downloadable, high-definition shows and movies available on the Internet first. High-definition programming remains too bulky to download now, but that will change soon, and the disk makers must move quickly, says Forrester's Schadler: "They're grabbing at the tail of a rocket ship."
BLU-RAY VS. HD-DVD
Sony aims to avoid a repeat of its VCR-era Betamax defeat.
THE GOOD: The PlayStation 3 game machine will have built-in Blu-ray DVD capabilities.
THE BAD: HD DVD players could be the less expensive choice by the time Blu-ray arrives on store shelves.
Backed by Toshiba, this standard will be the first high-def format to hit stores.
THE GOOD: The players could be more affordable because of low-cost manufacturing.
THE BAD: The major movie studios appear to be more committed to Blu-ray right now.
This story appears in the November 28, 2005 print edition of U.S. News & World Report.