Format Faceoff: Bringing the DVD War Home

[jamz]

By NICK WINGFIELD
June 20, 2006
Posted on Wall Street Journal

Format Faceoff: Bringing the DVD War Home

Blu-ray Player and Titles Hit
Stores, Taking On HD-DVD;
Is It Time to Choose Sides?
By NICK WINGFIELD
June 20, 2006

A little over 30 years ago, Sony Corp. introduced the Betamax, kicking off a long battle with the rival VHS recorder. When Sony lost, consumers were left with clunky, outmoded Betamax machines and movies.

Here comes the latest format war.

This week, U.S. consumers will get their first opportunity to buy movies and players based on Blu-ray -- one of two new technologies now battling to replace DVDs with a format that plays movies in clear high-definition video.

Sony -- determined to avoid a repeat of past failures -- has corralled an arsenal of powerful partners to its side in backing Blu-ray, including electronics makers such as Matsushita Electric Industrial Co.'s Panasonic and Samsung Electronics Co. and Hollywood studios like News Corp.'s Twentieth Century Fox and Walt Disney Co. that are putting out Blu-ray hardware and movies.

Today, retail and video-rental outlets like Netflix Inc. will begin offering seven titles from Sony's own studio, Sony Pictures, including "The Terminator," "House of Flying Daggers" and "The Fifth Element," while a Samsung Blu-ray player, the BD-P1000, will be in stores later this week for $1,000.

The new Blu-ray products will face off against hardware and movies that support a competing high-definition optical disc format called HD-DVD. That one is backed by Toshiba Corp., Microsoft Corp. and Hollywood studios like General Electric Co.'s NBC Universal. While both camps claim various benefits for their video formats, HD-DVD players clearly have an edge on price, at least initially.

Toshiba has been selling a player in the U.S. for several months, the HD-A1, for $500 -- half the cost of Samsung's competing Blu-ray player. Consumers who decide to buy one of the players now must do so with courage. In the worst-case scenario, they could end up with a contemporary equivalent of a Betamax machine, for which it becomes harder to find movies as studios shift their allegiance to one high-definition format.

Analysts say the industry politics that led to the current format battle will likely end up keeping most consumers on the sidelines for awhile. "From the consumer standpoint, it's very unfortunate," says Vamsi Sistla, director of broadband and multimedia research at ABI Research, a market analysis firm in Oyster Bay, N.Y.

"The consumer is still very confused. If you spend $500 to $1,000, you don't know which studio is going to continue to support content on that particular format." Many early-adopters may be willing to stomach the risk, though, because of the rewards both video formats offer.

Movies in Blu-ray and HD-DVD display pictures with noticeably more clarity and detail than conventional DVDs, as long as users are watching them on high-definition television sets. In one demonstration, the Blu-ray camp has shown scenes from "Lawrence of Arabia" on a split-screen: one side shows Blu-ray's capabilities, with a team of horsemen crossing the desert in finely etched detail. The other side of the screen shows the same scene in standard-definition where the same horsemen appear as a dusty, undifferentiated mass.

Analysts say that the two high-definition technologies offer comparable visual quality. Initially, the selection of Blu-ray and HD-DVD movies will be limited, with only a little over two-dozen titles available for HD-DVD through retailers and rental stores. The slate of Blu-ray titles will expand throughout the summer from Sony Picture's initial line-up of seven movies as more studios join the fray.

Movies in either format typically command a premium over current conventional DVD prices. The HD-DVD version of "The Bourne Supremacy," for instance, currently costs $24.49 on Amazon.com, compared with $13.88 for the standard DVD version of the same movie.

Complicating matters, selections of movies will also be determined by which format various Hollywood studios are supporting. Twentieth Century Fox, Disney, Lionsgate Entertainment Corp. and Sony are supporting Blu-ray, Universal is supporting HD-DVD and Time Warner Inc.'s Warner Bros. and Viacom Inc.'s Paramount Pictures are putting out movies in both formats.

Some electronics companies, including Korea's LG Electronics Inc., are considering offering "dual-format" hardware that plays movies in Blu-ray and HD-DVD, a step that could allay consumer concerns.

Because Blu-ray has amassed more Hollywood support, some analysts give that format an edge over HD-DVD. Blu-ray is also more complex than its rival. Due to technical snags, the first Blu-ray discs will be limited to half of the 50 gigabyte storage capacity that its backers have touted for the technology. That means that Hollywood studios initially won't be offering Blu-ray movies longer than two hours or so, which rules out longer epics like those from the "Lord of the Rings" trilogy. At the moment, movies on HD-DVD can run a bit longer than those on Blu-ray (the longest right now, is "The Last Samurai" at just over 2-1/2 hours).

Benjamin S. Feingold, president of world-wide home entertainment, digital distribution and acquisitions for Sony Pictures Home Entertainment, says the higher-capacity Blu-ray discs will be available by the fourth quarter of this year. That is also when Blu-ray is expected to get a big boost from PlayStation 3, Sony's new game console, which will start at $499 and contain a Blu-ray player.

HD-DVD's supporters believe their less-expensive players will give them an advantage. Jodi Sally, vice president of marketing at Toshiba of America's digital audio video group, says the company's HD-DVD players have been selling out in some locations since they went on the market, though quantities have been limited. Ms. Sally says the company has sold in the "tens of thousands" of the players.

It is possible, too, that consumers could decide to side-step the confusion of the high-definition format battles altogether. Ted Schadler, an analyst at Forrester Research, says some consumers may not think the image quality of the new discs is worth all the hassle when conventional DVDs look "pretty good" on high-definition television sets.

[jamz]

wow .. $1,000 for a player ..

[jeremy96gase]

Originally Posted by jamz

wow .. $1,000 for a player ..

Too much for my blood.

Originally Posted by jamz

LG Electronics Inc., are considering offering "dual-format"

Insted of buying one or the other I'd wait for the Dual-Format one. But the price is going to have to come down a lot before that happens.

[Formula92]

I'm perfectly happy with DVDs, but even if these things are better and awesome, I am definitely going to wait to buy one when the price goes way down AND it is going to be around for a while for sure.