Blu-Ray Poised to Win the High Def Format War

Earlier last week, Warner Bros. studios announced that they would back Sony Corporation's "Blu-Ray" as their choice for the next generation DVD. Last year, Blockbuster announced they would be carrying only Blu-Ray. Now, reports are that Paramount and NBC Universal are beginning to move in the direction of Blu-Ray at the expense of Toshiba Corporations' HD-DVD. These were the last two of the 6-major studios to be backing the HD-DVD format.

Toshiba, for its part, has reaffirmed its commitment to the HD-DVD format. Were Toshiba to cancel HD-DVD, Paramount and Universal would be released from their commitments to the format and Warner Bros., whose agreement with Toshiba for HD-DVD extends through May.

This is critical because while Blu-Ray appears to be reaching the critical mass to become the next generation DVD format, time is not on Sony's side. Last year, sales of DVD's declined and by lining up behind one format, Hollywood hopes sales will rebound with the high-definition format. With a format war, consumers hesitated to make a choice, and bought their HDTV's without an HD DVD-player. According to the LA Times, 28% of consumers said they weren't going to buy a player due to the battle of the formats. Besides the confusion between the formats, with an HDMI cable, most standard DVD players will convert signals to something approximating HD. With consumers having built a collection of DVD's, there would seem to be little interest in replacing those discs when there is a far less expensive option - particularly since the least expensive of the televisions have a resolution far lower than "full" HD, at 740p the upverted signal looks just fine. Added to that, last year 32-Million DVD players were sold and of that only 4% were High Definition - 578,000 Blu-Ray, 370,000 HD-DVD.

This victory may be pyrrhic, though, as online services, such as NetFlix, move into an on-demand digital delivery for movies. Consumers will be moving away from a disc based delivery of movies, and moving toward their cable company's DVR delivery. The combination of that with consumer ambivalence - with heavy emphasis on the idea that most consumers simply don't see the need to spend additional money on a new player and convert their collection - may obviate the need for DVD's at all.

The opportunity to make a push during a Christmas season is now 10 months away, consumers will remain generally confused over the formats for some time - DVDs have only really become affordable within the last 7 years or so; some of us have only recently disconnected our VCRs - and the DVD's we've got seem pretty okay. Lastly, if we're really all that interested in High Def content, we're getting direct downloads or on demand from our cable companies. So, Blu-Ray may have won the battle with HD-DVD, but that victory may just be too little, a little too late. Sony, the company behind betamax and the memory stick, may finally have built a standard that others could get behind, but it may well be a standard for a product no one needs.

REFERENCES:

http://www.latimes.com/business/la-fi-dvd5jan05,1,1196793.story?ctrack=1&cset=true

http://www.variety.com/article/VR1117978760.html?categoryid=20&cs=1

http://computerworld.com/action/article.do?command=viewArticleBasic&taxonomyName=hardware&articleId=9056898&taxonomyId=12&intsrc=kc_feat