Long before they were BD or HD DVD, the two sides shopped their proposals around the industry. Sony and their partners were far more successful in signing up additional partners and their team kept growing. Toshiba’s proposal just didn’t catch on. They got basic support from NEC, but the most support came from Microsoft because Toshiba and MS co-developed HDi. MS wouldn’t support Blu-ray because they adapted existing standards MHP/GEM to develop BD-J – MS hates Java.

It was pretty clear that Blu-ray has the vast majority of the industry backing it. There were several public overtures to Toshiba to join up – but they rejected them. They publicly rebuffed the BD group and kept making claims that they’re superior proposal would attract partners before launch – just wait and see! Well, it didn’t happen. The industry stayed devoted to BD.

The BDA was founded to govern the standards – just like the DVD Forum was founded to govern DVD. Note that most of the members of the BDA are *also* members of the DVD Forum. It was just felt that the structure of the DVD Forum didn’t fit the new teaming around Blu-ray.

There is a misconception that the DVD Forum developed HD DVD – that is totally untrue. Toshiba took the final specs to the DVD Forum for a vote on making it the official next general spec from them. The BD team probably couldn’t blocked it with a nay vote – but they decided not to be political about it. The vote passed and the spec was rubber stamped as HD DVD. If anything, HD DVD is more proprietary than BD – it was developed almost entirely by Toshiba on their own, unlike BD which is very much a group effort.

Why did Toshiba do this? Money. They were one of the primary developers of DVD. Toshiba and Philips co-developed most of DVD. Since HD DVD re-uses much of that technology, Toshiba would still get huge licensing revenues from HD DVD – as they do from DVD. Ironically, back when DVD was developed, Sony had a competing proposal. But Sony agreed to drop their proposal and sign onto the Toshiba/Philips standard to avoid a format way. Sony sacrificed the potential licensing revenue for the good of the market. But when the tables were turned, Toshiba decided not to do the same and instead to pursue a format war and to use consumers as pawns in the revenue war. They were very open about that too.

There was a last minute attempt to avoid the war, when Toshiba realized it was not going to go well for them. But by that point the BDA had already finalized just about everything. Toshiba wanted to re-open discussions on major issues – such as BD-J vs HDi, even the physical structure of the disc, etc. No surprisingly the BDA rejected this – they’d just spent years working out a joint spec, with repeated offers for Toshiba to join – and here is Toshiba asking to redo major pieces at the last minute. Toshiba was basically offered a smaller piece, maybe adding HDi as an option to BD-J, some format tweaks, etc – but it would have left them a much smaller piece of the revenue pie. So they walked away and pursued the war anyway, for the sake of money.

If Toshiba hadn’t been so pig-headed about it they couldn’t joined the BD group early on and would have been in a prime position to get their proposals incorporated into the final spec. Because they refused to participate until the last minute, then made unreasonable demands, they locked themselves out of BD and were left with the choice to start a format war or to admit they screwed up and license BD. The went to war.

A lot of people hate Sony – and I’m no fan, I think the only Sony gear I own is the PS3 – but Sony really isn’t the villain in this play.

Officially, according to the two backing groups, it is Blu-ray or BD and HD DVD. I know people get both wrong all the time – I see BRD and HD-DVD most often.

At this point HD DVD does have a slim chance – but it is pretty slim – to overcome BD. But with so much at stake, I don’t see it happening. If Toshiba make a desperate grab with $199 players – Sony would probably do something to counter. Either subsidize their own players to compete and/or offer some other promotion to boost BD player sales. They’ve already been narrowing the price gap from around $500 to around $200, and falling.

Personally I expect them to either cut the BDP-S300 to $299 for the holidays, or release a new low-end player at that price point. Lower if Toshiba pushes prices down more. And the PS3 will probably see a cut or promo to effectively make it $399 or less for the holidays, in light of the sales jump when they went to $499 and the subsequent Xbox 360 price cuts.

I wish for HD DVD to die because I hate format wars with a passion – and that is the only possibility for the end to the war I can see. BD is just not going away, period. Sony won’t let that happen, and it has too much industry backing – both CE and content industries – for it to die off. So the only option is a permanent split in the market and higher priced combo players (they’ll always cost more than a single-format player because of the need to license both formats plus dual-lenses or higher cost dual-format lenses) and retail confusion with both formats available. That’s not the future I want. So the only hope is for HD DVD to go away and leave the market to BD so we have one format. At this point I think any merger of the formats is just not going to happen. Though there is a chance HDi could be added to BD – which would be enough to get Microsoft to back BD. They’re said as much – that they’d be willing to back BD if the BDA adopted HDi as an option to BD-J.

2) “No. Because Blu-ray has such a lead . . .” Based on current sales, no one has a lead that couldn’t change
in one holiday season.

3) sorry for the confusion regarding this blogs title “Tivo Lovers” aka – who could of figured it was a blu-ray fan site?

4) No CEO, President, etc cares one iota for something beside Universal and Universal stock. If they support HD-DVD, they have a reason

5)”I wish for the complete death of HD DVD” uh, okay. Thats odd. I don’t care about Blu Ray. I may get a ps3 OR if the drives come down to 200 I may get a drive. Of course, i’m no fanboy. . .

As for the Blu-ray studios. No. Because Blu-ray has such a lead that even if all the BD studios went dual-format, which will never happy if only due to Sony and the studios they own, it wouldn’t end the war. Universal, on the other hand, could single-handedly end the war by releasing BD. If they did then all the major studios would have BD releases, and most would not have HD DVD releases, so the choice would be fairly clear. Yes, that means Universal has a lot of power in this war – they’re the keystone holding up HD DVD. If you can’t see that, that’s not my problem.

As for ‘whining’ – I have no intention of buying Heroes on either format. I’ve already watched every episode in HD – on my TiVo Series3. There’s nothing in the discs that makes it worth shelling out for them. If I really wanted to watch them, I could buy an HD DVD player without blinking, or an XBox 360 and drive for that matter. It isn’t about the money, not for me anyway, it is about the larger impact of the war on adoption and the consumer confusion and frustration. As well as Toshiba’s selfish stance in triggering the war solely as a money grab – look into the history. I’ve been watching this ‘war’ since before it was a war, when there were still multiple proposals that had yet to gel into BD and HD DVD. To me the blame clearly lies with Toshiba, and to a lesser degree with NEC and Microsoft.

You can applaud the CEO of Universal – though he wasn’t the subject of the article, that was Craig Kornblau, the President of Universal. But if they make decisions on the format to release based on anything except the best value for the corporation, overall, then they aren’t fulfilling their duties properly. Now, the long term impact is part of that decision, and maybe they really do think that HD DVD will be the best play long term and they are doing the right thing. But the bit about having to consider the future of HD DVD and worrying about the format collapsing if they pull out implies they’re considering more than the impact to Universal.

By the way, it is Blu-ray, not Blue-ray. And, for that matter, it is HD DVD not HD-DVD – but I used to make the same mistake too.

And I make no bones about it – I am an active supporter of Blu-ray Disc and I wish for the complete death of HD DVD. Plain and simple.

I’m sure all studios have their reasons, and incentives, for supporting a particular format. Quit whining because you want heroes and you have a ps3. . .

For me content is king – of the major studios 7/8 available on BD, 3/8 available on HD DVD. And Universal, the only HD DVD exclusive, has been having a terrible few years so they have very little content of note anyway. Most of their films and shows have bombed, with a few notable exceptions such as Heroes. But I can TiVo that in HD, so I don’t have a strong need to pick it up on disc.

HD DVD is short term gain for long term pain. If the format war drags on it will continue to suppress adoption and that will slow the price cuts to a halt. The only way to sustain continued price cuts is for adoption to increase, allowing for higher volume production. The end of the war would also bring in more of the second and third tier hardware vendors who have, to date, sat this one out letting the big boys slug it out.

Player costs would be dropping no matter what. The vendors know that the lower the cost of the players, the more market penetration they have. And there is a lot at stake with regard to future revenue, so they want to get them down as fast as possible without losing money. And there is still competition – there are many Blu-ray vendors competing against each other for sales. There would be a price battle between them no matter what, just as there was between DVD player vendors. And the PS3 was, and still is, the BD price leader – and that pricing is independent of the player market. It was the cheapest BD player because Sony was taking a huge loss on it, because it needs to compete in the gaming market.

There are also issues with the format war that can put *upward* pressure on pricing. With the market split, economies of scale are reduced. Since some pressing plants went with BD and others HD DVD, the total capacity for either format is reduced. That has created a scarcity of disc manufacturing capacity, which has increased production costs on discs. On top of that, many manufacturers have totally sat out the war, waiting to see who wins before investing in new gear. That further reduces capacity. If one format controlled the market then all of the capacity would be behind that format, and those waiting due to uncertainty wouldn’t have cause to wait – further increasing capacity. That would increase competition and drive down production costs faster. That, in turn, would drive down the cost of the titles faster.

Also, the uncertainty has kept many consumers from adopting either format. How many more people would have high-def disc players if it weren’t for the format war? I know several people who are waiting for a clear winner before buying anything, and every market study and survey shows the same thing. If we hadn’t had this war, there would be broader adoption and the single format would be selling better than BD and HD DVD combined. That increased adoption would be creating more volume and competition and driving down prices.

I just don’t think that the format war has had a major impact on pricing. If there had been one format then Toshiba would still be fighting Sony for market share, along with LG, Pioneer, Samsung, Sanyo, Denon, etc. And Microsoft would almost certainly have a BD drive for the XBox 360 to compete with the PS3, instead of an HD DVD drive, so that would still be a factor in pricing.

All the format war has really done is delay the adoption of high-def media and reduced and diluted investment in the market. If all of the markets resources had been focused behind one standard, which would be more than BD and HD DVD combined because of the wait-and-see crowd today, how many more titles would we have available? How many more features would be developed? If studios weren’t worried about investing money in a ‘losing’ format or concerned over the risk, how much more would they spend competing on bonus and interactive features?

Universal admits to propping up a failing format. They effective admit to defrauding their customers by selling them media in a format they know is going to die. They admit that only their artificial support is keeping the format alive, and that they’d re-evaluate that after the holidays. All signs point to BD massively outselling HD DVD this holiday season, as the vast majority of hot titles will be available on BD. If Universal follows through, then they’ll add BD next year – and HD DVD will collapse. So they’re deliberately taking money from consumers for products they know have a limited life, and deliberately not releasing content on the stronger format. That shouldn’t make the studio’s shareholders happy either – since they have a fiduciary responsibility to make the decisions that are in the best interest of the studio, not to provide corporate charity to prop up a format. Unless Toshiba is paying them off massively to compensate them for the losses due to the failure to sell Blu-ray, they’re not meeting their obligations to the shareholders.

Even if they are being paid off, the format war is reducing market penetration and therefore reducing overall sales too. So they’re also damaging their own business in that way. The shareholders and their parent company (GE) should step in and remove the leaders for failure to fulfill their corporate responsibilities.

The HD DVD camp has always been of the position ‘let the market decide’. Now we find that the market has effectively decided, so the HD DVD camp is artificially sustaining the war instead of answering the market. That’s two-faced.

This part was not noted here:
“But Kornblau says Universal’s position is not driven by deals but by a long-term and consumer-focused strategy that is supported by Universal parent NBC and corporate owner GE. Universal never initially wanted a war, he says, which is why the studio made a decision years ago to back only one format.”

I and several co-workers and family members like Zach above have been able to enjoy HDDVD since the rice is much lower.
I only note this to try and balance the BluRay fanboy thoughts from hollywoodinhidef.com.

The only thing new I saw in the article is very high level Universal confirmation that GE and NBC also firmly support their stance.

I hope many more can enjoy the beauty of HD. For me and many others price is King.

BTW TivoLovers is still cool even if its Blu

Also, over at thedigitalbits.com there’s a related article comparing Kornblau’s comments to those
of Ken Graffeo’s at EMA. Graffeo seemed to hint that they’re getting pressure from their
parents (NBC, GE, etc.) to perhaps go format-neutral. Most interesting of all was Graffeo’s
comments about Spielberg — that Spielberg wanted to wait until there was a lot more market
penetration with the hi-def formats…except one week later Sony announced the Blu-Ray (HD exclusive)
release of Close Encounters, complete with an HD transfer approved by Spielberg, as well as a new
interview with him specifically for this release.