Format War

I remember the last big format war: Beta versus VHS. It's the thing that kept my parents from buying a VCR until the path forward was clear. It kept the video recording industry from exploding until 1985, when VCRs could have become big three or four years earlier. But who was going to spend $400 on a machine that could become almost instantly obsolete if its format lost the war? (A friend's father bought a Betamax machine in 1983, gambling that Beta, as the superior video format, would emerge victorious. By 1987, his player was scrap and he had to purchase a VHS recorder.)

The electronics industry has not learned its lesson. Or maybe those who remember the mid-'80s are no longer working in the industry. But it appears we're about to go through the same thing with high def DVDs. As Yogi Berra is often quoted as saying, "It's déjà vu all over again."

For those who haven't been keeping up, here are some of the basics. There are two incompatible formats being developed for high def DVD. The first type is called Blu-ray, and has the support of most of the major electronics corporations, including heavyweights Sony, Panasonic, Philips, JVC, and Sharp. The second camp, wedded to something named (appropriately enough) HD-DVD, includes Toshiba, NEC, and Sanyo. Studios have also divided down the middle, with Disney, Columbia/TriStar, Fox, and MGM aligning behind BR; and Paramount, Warner Brothers, New Line/HBO, and Universal siding with HD-DVD. On the computer front, Dell and HP are for BR; Microsoft has tentatively fallen on the HD-DVD side. (Although no one doubts that Bill Gates, who loves to be on the winning side, will jump ship if he becomes convinced he's backing the wrong format.)

Technically, BR is superior, offering 50 GB of storage on a double layer disc. HD-DVD offers only 30 GB, although there has been talk of using a triple layer disc, which would boost the storage up to 45 GB (but introduce potential problems). From a cost perspective, the word is that HD-DVDs will likely be slightly cheaper (probably on the order of a couple of dollars per disc), since the current DVD manufacturing equipment can eaily be converted to make HD-DVDs. Blu-ray requires a complete overhaul in the manufacturing process.

HD-DVD plans to have players on store shelves before Christmas, and to begin shipping titles in the November/December time frame. Initial offerings will include the likes of Braveheart, Forrest Gump, The Polar Express, Batman Begins, Apollo 13, the three Harry Potters, the LOTR trilogy, and one of the Star Trek movies.

Plans for the BR deployment are more nebulous, with the "most likely" date being 1Q06, but delays until next spring are possible. No titles have officially been released, but you can bet that the six Star Wars movies will feature prominently in the catalog. (Rumors have it that Fox is lobbying George Lucas to make the "un-enhanced" versions of the original trilogy available as extras on the BR discs as a marketing ploy.) The ace up BR's sleeve is that Sony's Playstation 3 uses BR, and gaming units currently make up a large portion of DVD players bought and sold. So even if customers are undecided on a format for their high def DVDs, they may end up with BR by default because they want a Playstation 3.

The cons are obvious. Until there is a unified standard, if you want all of the titles, you'll have to buy two players - one HD-DVD and one BR. Until a winner emerges, there will not be mass acceptance of high def DVD. Everyone will be content to wait (as they did with Beta/VHS), relying on their standard DVDs to keep their movie collection up-to-date. (By the way, both HD-DVD and BR are backwards-compatible, meaning that they will play all standard DVDs.) And, once there is only one left standing, those who bought titles in the losing format will have to re-buy them.

There are some pros, although they are outweighed by the negatives. Nevertheless, the initial competition and need for an edge will result in underpriced machines and titles (at least initially). Had there been a unified format, the players likely would have started around $1000. As a result of a war, they'll probably be closer to half that. And it's unlikely that high def movies will sell for more than standard DVDs. There will be massive pressure from both the Sony camp and the Toshiba camp to get consumers to commit.

A format war could end quickly or it could go on for a long time. The marketplace will make the determination. Several summits have been held attempting to reach a compromise, but cooler heads have not prevailed (at least not yet). I'm undecided how I'm going to proceed. Likely, after a short period of fence-sitting, I'll take the plunge and hedge my bets. Or maybe someone will make a dual-format player - one that will accept both BR and HD-DVD. (It will likely be damn expensive, though.)

Do I have a gut feeling which format will win? Yes, although even the most knowledgable pundits admit it's too close to call. But I think BR will prevail. Despite having Microsoft as a backer and getting the early jump, HD-DVD's technical limitations will be its partial undoing. And with so many electronics corporations backing BR, it's hard to believe Toshiba is going to prevail. But the PS3 will seal the deal. It's on the horizon and greatly coveted by gamers, and it will make BR widely available. Even an HD-DVD X-Box 2 won't be able to trump this.

Considering how tightly contested this battle is, however, I reserve the right to change my opinion in six months.

---