My Choice in the Format War – One Year Later

April 7, 2007

hd movie titlesI thought it would be fun to revisit a post I made one year ago today, (thanks for the suggestion James). It’s on a subject I haven’t commented on much as the months have progressed, but one I’m still very interested in. Yes, its time to revisit my ‘My Choice in the Format War’ post from April 7th 2006. Wow, a lot has changed (including some of my thoughts on the subject) since last April but just as much remains the same, what’s changed you ask?

Well after HD DVD got off to a better than expected start and Blu-ray perhaps worse than expected, that paradigm shifted once again to Blu-ray’s favor as the initial software encoding problems were sorted out and in large part due to the launch of the PS3. In the months since the PS3’s launch Blu-ray software sales have indeed picked up but just as the Blu-ray camp didn’t cry-uncle and give up when HD DVD enjoyed a 3:1 sales lead over Blu-ray, the HD DVD camp doesn’t appear particularly concerned at Blu-ray’s current 2:1 sales advantage.

Several of my original points of contention surrounding Blu-ray have indeed been rectified, BD-50’s (50GB discs) have been utilized, the movies themselves look much better than the several initial runs and of course the all important ‘Trojan Horse’ the PS3 has launched in Japan, the United States, and Europe. But before I get ahead of myself I want to get this out of the way, if you’ve been scouring the battlefield for the HD DVD camp to surrender put down your binoculars, that flag won’t be flown this year.

More accurately that flag of surrender may never be flown at all. This war (I’ve taken to italicizing the word war in reference to HD discs, no one is dying here) is turning into something very different than Beta vs. VHS. At the risk of making an obvious observation, you couldn’t stick a VHS cassette into BetaMax player, you can however place a HD DVD into a Blu-ray player and vice versa (i.e. they share the same basic physical dimensions), getting them to actually play however is the tricky part. Well it looks as if LG and Samsung have apparently figured out how to accomplish it.

No, no I’m not advocating that dual-format players will solve the format war (although I’m not advocating they won’t…..) my point is entrenchment; one side has already arguably established it and the other is nipping away at their heels. What am I blathering on about you ask? Entrenchment is nothing more than a descriptor to establish when a particular format, technology, or feature-set has gained enough traction among consumers to warrant other otherwise uninterested CE manufacturers to include support for said format/tech/feature in their equipment. Simply put whichever format (or both) reaches entrenchment first, or at all, is pretty well sheltered against obsolescence.

Indifference a Bigger Concern than Obsolescence:

This (obsolescence) is really the gist of my post today. I’m not necessarily here to prop one format up while pushing the other off the mantle, I simply want to illustrate that if you want to objectify this, neither is going anywhere, anytime soon. So with that, lets take a look at some prior and recent milestones from both camps. As mentioned before the PS3 is out in the wild and for the most part, especially considering its price-point, enjoying relative success. Sure Sony would have preferred for it to have sold better but most of us who reside this side of normal-town knew it wouldn’t fly off the shelves.

It has however gone a long way toward entrenching Blu-ray but the PS3 hasn’t exactly leveraged it’s 1.75 million unit, installed-base advantage against HD DVD in any significant manner. There are roughly 2.5 million PS3’s in the wild versus roughly 200k HD DVD players, yet Blu-ray only managed a 2:1 lead over HD DVD software last month (March) with April’s numbers expected to show HD DVD regaining some of that ground. But, and here’s the million dollar (ok more) question, what happens when the recent MSRP reductions, in-store disc promotions (what’s good for the goose is good for the gander), and farther down the road the oft rumored $150-$200 Chinese HD DVD players, entice another couple hundred thousand fence-sitters to go ahead and jump in?

I guess this is around the time that Sony launches their answer to the HD-A2, at $599.00, or one hundred dollars more than what a comparably equipped Toshiba HD-A20 goes for right now. My point? Both sides are well into the flag-pole-phase of their market research campaign, as in they’re both running ideas up the flag-pole to gauge reactions. A month or so ago the ‘BDA’ ran a point-of-sale promotion with Best-Buy for buy one get one free Blu-ray discs. A few weeks later it was 50% off select titles at Amazon.com. Now we get word that the HD DVD promotion group and or Toshiba directly are running a similar deal with Circuit City. Expect these cat-and-mouse games of where’s Waldo the consumers wallet to continue well on into the summer. Shocker here folks, price matters.

But promotions, incentives, and rebates aside we’ve seen other noteworthy developments in the hi-def disc market, actual hardware/software developments no less. According to Andy Parsons of the ‘BDA’, “There was a grace period between the launch of the first generation Blu-ray launch and October. After October, [manufacturers] must conform to the full range of specifications.” Contrast this with Warner Brother’s decision to release ‘The Matrix Trilogy’ on HD DVD this May versus a Matrix Blu-ray release of “later this year.” It would seem as if the HD DVD having a more mature, finalized interactivity specification paid of in the form of a temporary exclusive.

New HD DVD Features:

Speaking of interactivity, instead of playing catch-up to interactivity already encoded on discs, Toshiba recently released a firmware update for first generation players that will allow those early adopters to take advantage of something coming in the next round of HD DVD titles from Universal. While the first usage of these ‘network-connected features’ are limited in scope, they lay the groundwork for movies that evolve with additional downloaded and streamed content right through the mandatory (optional with Blu-ray) Ethernet jack.

For example in this screen-shot from the up-coming HD DVD title ‘Smoking Ace’s’, you’ll be able to track the assassins as they hunt down their target via an animated Google map overlay of the city in real-time, and even get additional information, like odds of them succeeding. Obviously this in of itself could hardly be considered a killer-app but its implications could go much farther, as a proof-of-concept this could spark new ideas and new implementations of interactivity that has the potential to transform the way we currently watch movies into something entirely new.

As mentioned in previous posts, in the past DVD’s were static in as much as once they were mastered and released to the public, that was it; they were/are forever the same. This networked interactivity with HD DVD’s opens up all sort of scenarios. Things like cast biographies that can be updated after the disc is released to reflect films they’ve stared in since that disc was released, or even up-coming films that weren’t announced at the time of the discs release.

We could even see live-event, day-of interviews or introductions with the cast of a particular disc to coincide with its release. Again with networked interactivity we’re no longer bound by the content on the disc the day it left the mastering facility. Finally the DVD can enter the PC era and offer things we never really considered in the past.

Another interesting new feature to be introduced with Universal’s ‘Smoking Ace’s’ HD DVD is the “Clips” feature. Clips goes above and beyond the already present book-marking feature and allows users to save their favorite parts of a movie and then play them back-to-back. Handy for demonstrations, no? You even get a time-line, much like the current chapter viewer on many HD DVD releases.

Speaking of interactivity on recent releases, Universals ‘Children of Men’ featured the ability to zoom in and read the posters and newspaper headlines, giving you a bit more background on the events that were unfolding in the movie. In addition to this, if you saw the movie in the theater or on DVD you no doubt noticed some of the futuristic billboards and electronic side-scrolling advertisements peppered throughout the city, with the disc’s U-Control you can zoom in and see those advertisements in full detail. Again, perhaps not killer apps today but the possibilities down the road are intriguing.

Perspective:

There are a couple of things I really want to make sure everyone understands, the format war won’t be decided this year. There’s a good chance it won’t be decided next year and there’s a reasonable chance it will never be decided. Netflix CEO (Reed Hastings) was recently asked, “How important is renting HD-DVD and Blu-ray movies, the two new high-definition disc formats, for Netflix?”

To which Hastings responded “Tragically small. We have all the titles on HD-DVD and Blu-ray. They’re running neck-and-neck, but the total volume is less than 1% of our volume. Consumers want high-def, but the perception of a format war is freezing consumers out. Until that perception stops, very few consumers will try the new high-def discs.”

Based on this and the fact that the largest selling next-gen HD disc title to date (Casino Royale) only sold 28,233 units in it’s first week…. and with other titles selling less than 1000 total during their first week of release, we need to think of one word and one word only before even entertaining the notion of a winner. That word is volume. Simply put the volume on these next-gen disc titles are non-existent. This is why we hear terms like 2:1, 3:1, and outselling in general as opposed to actual discs sold. No friends this is far from over, it’s barely begun.

Without giving away names or specific titles (I forgot to ask permission) I can tell you that during a recent conversation with a representative of the North American HD DVD promotional group, I was struck by the resolve and confidence my contact had in discussing recent sales figures, general industry news and specifically the close relationship they have with their existing partners. His tone was confident enough to eventually prompt a “So I guess it’s safe to say you guys aren’t going anyway where anytime soon?” “Absolutely not” [laughter] he replied. “Safe to say any rumor to the contrary would be a ridiculous proposition. Absolutely ridiculous,” he replied.

Summary:

So with that, I suppose it’s time to seal-the-deal and get down to either reasserting my choice for HD DVD in the format war or throw my support behind the Blu-ray disc format. In a way I’m not going to do either but as many of you know, as of late last November I purchased a PS3 for Blu-ray playback, and while I have enjoyed several of the BD releases, I’ve yet to see anything that tempted me to forgo HD DVD in favor of Blu-ray exclusively.

In short, I’m a movie fan first and format fan second. That said I would still recommend HD DVD as the least expensive entry into high definition disc playback but something else has been nagging at me ever since I started this post, if you really want to get down to specifics; specifics are easily identified with regard to the advantages and disadvantages between both formats.

For example, if your fiending for the ‘Matrix Trilogy’ in high definition you’ll find yourself waiting a little longer to grab it on Blu-ray versus HD DVD’s release on May 22nd. Alternatively, if you just can’t live without ‘Pirates of the Caribbean’ (also on May 22nd) then you’ll find Blu-ray is the way to go. However as you can’t eat, live in, or wear any of these discs they’re hardly a necessity.

Assuming you’d rather look at things from a hardware perspective, I happen to think players with mandatory network support for as little as $306.88 and 5 free movies are rather compelling entry point into hi-def disc playback, of course your mileage may vary. It is a bit odd however to see much of this (in the short term at least) to wind up mimicking the game console market.

We have exclusives, non-exclusives, and short-term exclusive titles confusing the uninitiated consumer at large. However one fact remains for those that haven’t bought-in to either format, no matter which one you pick you’ll have well over 175 different titles to choose from in both formats. I hear the content is king mantra bantered about as a selling point for one format over another from time to time. Well unless your ready to plunk down over $4500 for every title available it would appear as if there’s plenty of content available from both formats.

The real question remains, how much are you willing to invest in the hardware to get the HD-disc ball rolling? Because with what would appear to be the second manufacturer entering into the dual-format player arena, its relatively safe to say that whether you buy your discs in blue cases or red cases, you’re in no danger of not being able to play them for years to come. This isn’t going to be decided anytime soon, if you’re interested in watching pre-recorded high definition movies at home, find a deal on a player and hop off the fence. Your eyes and ears will thank you, your wallet will forgive you.



Posted by Bryan Greenway | | Filed Under Blu-ray, HD-DVD


Comments

  • SnakeDoc

    I think who ever lowers the prices on their HD DVD’s will win the format war.If the prices are lowered to say 19.99 for new releases and 22.99 for outdated releases. this would make it more affordable for the consumers to buy more than 2 HD DVD’s a month. Especially if HD DVD does this before blu-ray. Here’s the formula:
    Cheaper HD Player + Cheaper HD-DVD’s = happy consumer.

  • SnakeDoc

    I think who ever lowers the prices on their HD DVD’s will win the format war.If the prices are lowered to say 19.99 for new releases and 22.99 for outdated releases. this would make it more affordable for the consumers to buy more than 2 HD DVD’s a month. Especially if HD DVD does this before blu-ray. Here’s the formula:
    Cheaper HD Player + Cheaper HD-DVD’s = happy consumer.

  • Andre

    Thanks for the post, I had not previously thought about it under that angle.

    As someone sitting on the fence with a slight bias towards BD for its size, I am starting to think this “war” is not as important as previously thought. Maybe we are after all headed towards a situation where the two formats coexist. Pressing two pieces of round plastic instead of one is not a significant cost issue for the content producers.

    An imperfect analogy would be how current DVD titles are available in Widescreen and Fullscreen versions. Joe Consumer makes a decision at purchase-time and is stuck with it. Many titles are available in both formats–though, of course, where this analogy breaks is that they’re both playable.

    If no format will die then this means that picking either one will still yield a substantial enjoyment for the investment.

  • Andre

    Thanks for the post, I had not previously thought about it under that angle.

    As someone sitting on the fence with a slight bias towards BD for its size, I am starting to think this “war” is not as important as previously thought. Maybe we are after all headed towards a situation where the two formats coexist. Pressing two pieces of round plastic instead of one is not a significant cost issue for the content producers.

    An imperfect analogy would be how current DVD titles are available in Widescreen and Fullscreen versions. Joe Consumer makes a decision at purchase-time and is stuck with it. Many titles are available in both formats–though, of course, where this analogy breaks is that they’re both playable.

    If no format will die then this means that picking either one will still yield a substantial enjoyment for the investment.

  • westcott

    I have said it before and I will assert it again. Until HDCP is implemented, the content providers are unwilling to release any titles of significance. It is the same mentality that is keeping the content providers from winning the format war.

    If you released all the top 100 classics tomorrow on one format or the other, there would no longer be a format war. We would have a winner.

    Content is king and the studios stuck between a rock and a hard place. HD digital copies are perfect and their are WAY toom many displays that are fairy new that do not comply. There would be riots in the streets if HDCP were implemented today but that is what it is going to take before content of any significance enters the market.

  • westcott

    I have said it before and I will assert it again. Until HDCP is implemented, the content providers are unwilling to release any titles of significance. It is the same mentality that is keeping the content providers from winning the format war.

    If you released all the top 100 classics tomorrow on one format or the other, there would no longer be a format war. We would have a winner.

    Content is king and the studios stuck between a rock and a hard place. HD digital copies are perfect and their are WAY toom many displays that are fairy new that do not comply. There would be riots in the streets if HDCP were implemented today but that is what it is going to take before content of any significance enters the market.

  • James M

    As good a piece of fence sitting as I have ever read….well done.
    As an early adopter of both LaserDisc and DVD, I was all pumped and primed to enter the HD age when they finally arrived here in Australia. Sad to say, there are about two dozen Blu Ray Titles available at our equivelent of Best Buys, and zero HD-DVD.

    For me content IS King. Without Star Wars, Jurassic Park and Indianna Jones, whats the point? Killer new movies? Casino Royale and Flick. Big deal. When ALL of the studio’s get real, then one or the other format will prevail.

    In the meantime, I am not going to even think about a dual disc player in case one format DOES win. When the combo player dies, and it will, the discs that you bought from the losing side will be unplayable.

    Lets hope that either Sony or Toshiba see sense at some point and find a way out of this wasteful “war”.

  • James M

    As good a piece of fence sitting as I have ever read….well done.
    As an early adopter of both LaserDisc and DVD, I was all pumped and primed to enter the HD age when they finally arrived here in Australia. Sad to say, there are about two dozen Blu Ray Titles available at our equivelent of Best Buys, and zero HD-DVD.

    For me content IS King. Without Star Wars, Jurassic Park and Indianna Jones, whats the point? Killer new movies? Casino Royale and Flick. Big deal. When ALL of the studio’s get real, then one or the other format will prevail.

    In the meantime, I am not going to even think about a dual disc player in case one format DOES win. When the combo player dies, and it will, the discs that you bought from the losing side will be unplayable.

    Lets hope that either Sony or Toshiba see sense at some point and find a way out of this wasteful “war”.