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 November 1, 2006 The Format Wars or How I Learned to Love HD DVDI was a Blu-ray supporter from day one. The hi-rez video format’s specs looked so much better than those of its rival, HD DVD, that I just knew that Blu-ray had to be the next-generation video format of choice. However, that was before either format was launched, and before Sony and the rest of the Blu-ray group managed to fumble and foul at every turn. To feed my home theater a steady diet of high-definition material at the first opportunity, I turned to Toshiba’s very reasonably priced HD-A1 HD DVD player ($499 USD). It was then that my love affair with HD DVD began. From those first moments, the crisp high-definition images bouncing back from my 92" screen had me hungry for more. Sure, there were early problems with the player, but lots of attention from Toshiba customer service and a steady stream of firmware patches have fixed all but a few of them. Since then, I’ve learned to love a format I once ridiculed. But it was Sony’s inability to produce a decent picture from a format whose players cost twice as much as HD DVD machines that started me down this path. Is Sony in the process of building another Marketing 101 case study in how not to launch a product? It would sure seem so, but there’s still time for them to fix this mess they’ve made. Or not. The time to fix this mess was before either format was launched, thus avoiding another ridiculous format war that will end up hurting consumers, studios, and the electronics industry as a whole. However, there’s some history to deal with. Sony and Toshiba were already far down this road ten years ago, before the DVD format was released. If Lou Gerstner, then CEO of IBM, hadn’t stepped in and worked out a deal, we probably would have ended up with competing DVD formats. If the DVD hadn’t been released as a single standardized format, then it’s within the realm of possibility that we would still be watching VHS tapes today. I wonder what the impact, in the form of lost sales, would have been on studios and the electronics industry. And that’s not to mention the ripple effect: higher resolution and better sound have helped drive the demand for larger, higher-resolution displays and full surround-sound systems. Alas, this time history did not repeat itself. There was no Lou Gerstner to pull the parties together. Furthermore, Sony was reportedly never very happy with its share of the DVD compromise, and wasn’t likely to sign another agreement with Toshiba. There were rumors that Toshiba had tried to salvage the situation, but we have no idea if the terms were realistic or favorable enough to interest Sony. At this point, it doesn’t really matter -- we’re stuck with a format war, and too much money is at stake for either side to back down now. It’s a shame that the giants of the consumer-electronics industry have learned nothing from past mistakes, but it seems that the stupidity that so often accompanies excessive greed and pride knows no bounds.
Sony’s choice of MPEG2 to reduce costs probably has a little to do with the fact that Blu-ray discs are more expensive to manufacture, and will continue to be for the foreseeable future. HD DVD discs are similar enough to standard DVDs in most important respects that DVD production lines can be retooled at minimal cost, whereas the retooling necessary to make Blu-ray discs is extensive. Also, the top layer of data on a Blu-ray disc is extremely close to the disc’s surface, thus requiring a more durable surface coating to protect the data, which adds yet more expense. Where we are now Other factors tilted the playing field in Toshiba’s favor. The first bombshell Toshiba dropped on the Blu-ray camp was in being first to market with a capable player, thus forcing the Blu-ray camp to go to market before they were ready. The second was the price of Toshiba’s very first HD DVD player: $500. In the past, this kind of pricing has been reserved for second- and third-generation players, but this move put HD DVD within reach of the average consumer; Toshiba wasn’t counting only on early adopters. In comparison, the only Blu-ray player now on the market costs twice the price. What happened next is what will probably become that Marketing 101 case study in how not to launch a product. Sony has only recently begun producing dual-layer Blu-ray discs. This means that all of the first Blu-ray releases have been hampered by having lower storage capacity than their HD DVD competition, as well as by the disadvantages of an outdated video codec. The result is discs that produce a lower-quality image than the first HD DVD discs, but that can be played only on machines costing twice as much. To say that Sony has egg on its face would be a gross understatement. The negative talk on Internet forums and a deluge of bad press has severely hurt the initial positive image most people had of Blu-ray. This has given Toshiba a substantial early lead in sales of hi-def players and caused a number of Blu-ray supporters to wonder if Sony has what it takes to turn this launch around. Sony’s history of failed product launches over the last few decades hardly guarantees their success here. There has been other recent bad news. A shortage of the blue diodes Blu-ray players use has forced Sony to cut back on the number of PlayStation3 gaming consoles -- each of which includes a built-in Blu-ray player -- it had planned to make available for the Christmas shopping season, and will delay the European introduction of the next-generation console until sometime next year. This may have a significant impact this Christmas shopping season -- the Blu-ray camp has no other reasonably priced player to market. If it weren’t for a few factors that play in Sony’s favor, the Blu-ray disc would already be well on its way to an early grave. The war drags on . . . Both HD formats have plenty of capacity to contain crystal-clear, progressively scanned 1080-line (1080p), high-definition transfers of most feature films, so there’s no technical reason to select one over the other. The choice then comes down to cost, studio support, and the wild card of the PlayStation3 gaming console. As far as cost goes, Toshiba is way ahead of the game, with player prices recently dropping as low as $400 at some Web outlets. Sony plans to challenge that with a lower selling price for the PlayStation3.
The final factor is film-studio support, and Sony has an edge here as well, due, at least in part, to the fact that it owns one of the major studios, Sony Pictures (which includes Columbia and TriStar). Both formats have fairly wide support among studios, however. Exclusive studio support is mostly limited to Sony and Fox/MGM (Fox controls MGM’s distribution) for Blu-ray and Universal for HD DVD. Overall, the studios have thrown more weight behind Blu-ray, though the difference is not as great as you might think. Where do we go from here? It’s anyone’s guess where all of this will end up. The one thing certain is that the battle will be long -- Sony’s consistent bungling of Blu-ray’s launch has already lengthened it more than any of us expected. And other than the fairly brilliant move of introducing their first player at $500, Toshiba hasn’t done all that outstanding a job of marketing HD DVD. Rather, it’s been the mistakes of the Blu-ray camp that have given HD DVD, almost by default, more credibility and a more loyal following. I’m one of those who, despite early perceptions, have learned to love HD DVD. If Sony et al. ever get their heads out of their posteriors and produce a viable product at a realistic price, I might eventually learn to love Blu-ray, too. ...Jeff Van Dyne
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Early in this war, I was sure that
Blu-ray’s technical specs made it the format to beat, and so did just about everyone
else. With dual-layer Blu-ray discs coming in at 50GB capacity and HD DVD discs
holding only 30GB, surely Blu-ray would provide better images -- and, had everything else
been equal, no doubt this would have been the case. However, this was before I learned
that Sony was pushing to stay with the MPEG2 video codec -- even before I knew much about
VC1, the codec used for HD DVD. It turns out that MPEG2 is so much less efficient than VC1
or MPEG4 that an MPEG2-encoded disc needs a whole lot more storage than one encoded with
the newer codecs. This largely -- or maybe even completely -- negates Blu-ray’s
storage advantage. To be fair, VC1 is supported by Blu-ray, but the royalty costs
associated with the new codecs make them more expensive than MPEG2. 
My experience with DVD players as part of gaming consoles doesn’t give me
much faith that the PS3 will be a good Blu-ray player, but again, we must wait and see.
The fact that many of these PS3s will likely be hooked up to older, standard-definition
TVs is another reason to doubt the impact of the console. However, it will most certainly
have an impact on the sales balance -- and if it’s a good Blu-ray player, then
the impact could be enormous: impressed console owners might then start buying Blu-ray
discs.