Most of the discussion is focused on MPEG-2 versus VC-1 encoding, not on the disk technology itself. I have seen some people argue the HD DVD has thicker plastic than Blu-ray, while others acknowledge Blu-ray uses a much tougher coating material. Nobody questions whether Blu-ray will have higher storage capacity.

Sony and Microsoft compete in the entertainment marketplace, and Sony’s desire to use MPEG-2 encoding may have more to do with its competitive positioning with Microsoft than in the quality of video output. Players will handle multiple decoding schemes, and even if Sony sticks with MPEG-2 encoding, other producers will easily make the switch to newer codecs.

There are actually many codecs that can be used within the standards. For lossless compression, here’s a list http://www.compression.ru/video/codec_comparison/mpeg-2_2006_en.html

Alpary
ArithYuv
AVIzlib
CamStudio GZIP
CorePNG
FastCodec
FFV1
Huffyuv
Lagarith
LOCO
LZO
MSU Lab
PICVideo
Snow
x264
YULS.

Each codec has unique characteristics of file size, quality in certain conditions, etc. The underlying Blu-ray disk provides a better platform for entertainment providers to use advanced encoding methodologies to deliver HD video. Blu-ray also uses laser technology that allows for much higher capacity for data storage.

That is absolutely true at high bit rates (> 25 MBps for HD).

I am Encoder and Decoder developer.

$ony is worse than M$ when it comes to standards. Their licensing fees are aweful. That is what killed beta; JVC invented an inferior standard to avoid paying $ony fees and licensed it relatively cheap to every else.

So history if going to repeat itself and HD-DVD will win out.

I see Blu Ray as the iPod of home entertainment. The iPod does not offer the highest quality, in fact you can easily tell that there is a significant drop in sound quality compared to other hard drive music players. Yet iPods are most popular because they offer the most non-technical specs… in other words the only thing the consumers see.

The majority of consumers will never know that Blu Ray uses MPEG 2 instead of a higher, more efficiant codec. All they will see is the 50GB or 100GB marker on the product label, compared to the 30GB on the HD DVD label. And most people, not knowing the difference in video quality, will most likely select the more capacity.

Again, look at the iPod. It is not the cheapest 20Gb player, yet people still buy it. There are other 20Gb players that are cheaper and of higher quality but thats not what the people see. The people see the label. And as much as I want HD DVD to come out on top, this will be a tough battle.

“Advanced (formats) don’t necessarily improve picture quality. Our goal is to present the best picture quality for Blu-ray. Right now, and for the foreseeable future, that’s with MPEG-2.”

If the Senior VP of Sony Pictures advanced technology says “for the foreseeable future, that’s with MPEG-2″ What else are we left to believe?

Unfortunately MPEG2 is a bigger stumbling block than the disc space. While I readily admit larger discs will allow Blu-ray titles higher bit-rates, it won’t solve the entire problem. You have to remember, they still need room for the advanced audio tracks, and then there are the extra features to consider.

Blu-ray’s achilles heel is the antiquated MPEG2 codec, they have to address this if they really want to compete with HD DVD on video quality.

Take the WMV HD discs for example, HD movies (up to 1920×1080) on a standard DVD. That kind of eliminates the larger disc capacity is required for HD resolutions argument. Now obviously the bit-rates of WMV HD discs aren’t what we want to settle for, but it does show what advanced video codecs are capable of.

I was playing around with a bit rate calculator last night, the little app that helps you pick the highest bit-rate your movies run time will allow for on DVD, what I found kind of floored me.

No matter how I adjusted the calc I couldn’t figure out how on earth a high bit-rate MPEG2 encode on a long movie, extra features AND lossless audio tracks could fit on either the 25GB or 50GB discs, MPEG2 just isn’t efficient enough.

I just don’t see MPEG2 full length movies, lossless audio tracks and even the most minimal set of extra features fitting on these discs, that is unless the bit-rate is scaled back significantly, is that what everyone wants? HD-lite?

Now the upcoming Warner Blu-ray titles may very well be AVC or VC-1 encodes, but that still leaves the Sony titles, (the titles everyone points to as part of their studio advantage) I’ve seen zero indication that these titles will use advanced video codecs any time soon, if ever.

This is absolutely true. I saw Joe at Samsung’s booth at INFOCOMM in Orlando last month, and he had a number of different programs on a HTPC in different resolutions. We looked at both codecs, and the difference between VC-1 and MPEG2 was VERY readily perceivable.