With CES Next Week, HD 'Format War' Heats Up
December 27, 2005
Sarasota, FL - With the Consumer Electronics Show (CES) set to open next week, video industry professionals are bracing for new announcements in the recently ramped-up “format war” between Blu-ray and HD DVD. Prototypes of new high-definition players and new movie titles in HD are expected to be unveiled, along with announcements regarding upcoming release dates.
Pioneer Electronics today announced one of the industry's first Blu-ray Disc computer drives, expected to revolutionize digital and high-definition media storage. (Click Here for the full WEVA Industry News Story.)
Just over a week ago, Hewlett Packard, the USA’s second-largest computer manufacturer announced it was withdrawing exclusive support for Blu-ray and officially crossed over to the competing HD DVD camp led by Toshiba whose supporters also include Microsoft, Intel and NEC -- but did so without severing all ties to Blu-ray.
HP says their decision to support both standards was done to place the company in a "better position to assess true development costs and, ultimately, provide the best and most affordable solution for consumers." The HD DVD format is compatible with current generation DVDs and therefore cheaper to make.
The switch by HP was not a surprise as HP had said in October they would abandon their exclusive support for Blu-ray if the Blu-ray Disc Association (BDA) failed to adopt two technologies already supported by HD DVD. One of the two technologies would permit consumers to make legal copies of high-definition movies. The other concerns an interactivity function that will be featured in Microsoft’s upcoming Vista operating system.
Costs At Issue
HP believes new high-definition technology should allow consumers to easily transfer movies from DVD to a home network, which HP feels is critical for consumer adoption of any high definition DVD format. Microsoft and Intel, along with HP, are marketing hardware and software that enable home networking.
HP’s push for more lenient copy protection was seen as prompted by Microsoft’s jump to HD DVD, which happened in September and signaled that PCs running the new Vista operating system or Intel's Viiv entertainment technology, will come already equipped with support for HD DVD drives.
Maureen Weber, general manager of HP's Personal Storage Business unit cited the "unreasonable cost we have to bear in supporting the Blu-ray format," which uses Java, as a key factor in HP's support for HD DVD.
Blu-ray royalties, Weber related, amount to about $30 per PC drive. But she said the material required for PC vendors to support HD-DVD "comes free, shipped and integrated with Vista."
Microsoft's position is that Java isn't necessary because PCs already feature interactivity. However, Java is critical for consumer electronics manufacturers in order to make their end products interactive. With Dell and Apple planted firmly in the Blu-ray camp computer makers still remain split in their support for HD.
While the BDA confirmed last month that it would support the copying technology, there is still no official word on its support for the computer integration technology.
A special feature called "mandatory Managed Copy," will allow a consumer to make a legal copy of their high-definition DVD and store the digital file on a home network. Reports say “the movie can then be transferred from a computer screen to a television and other authorized viewing devices on the network." Blu-ray had offered stricter content protection rules that would allow studios to lock their movies to the disc, preventing any copying.
Currently Blu-ray also offers other unique interactive functions, such as those that allow consumers to play games, connect to the Web, and select various features, including subtitles and text, all while still watching a movie.
Preparing for Springtime Releases
Earlier this month, however, Toshiba announced that copy protection issues were the reason for the delay in the release of new HD DVD players, originally slated to appear in Japan before the end of 2005. According to Toshiba, players will not hit the Japanese market until the copy protection system for the units (called AACS, or Advanced Access Content System) is finalized. While no definitive availability date has been announced, Toshiba has said they are now pushing for a U.S. release not later than the spring of 2006.
The delay means that, absent any startling announcement at CES next week, both standards may now hit the market almost simultaneously next spring when Sony’s new PlayStation 3 (PS3) consoles are scheduled for U.S. release.
Sony’s PS3 units, already under close watch, particularly by videographers who produce Bar/Bat Mitzvah videos and other productions for kids and young adults, will come equipped for immediate Blu-ray playback.
Backers of the Blu-ray standard, led by Sony, include Panasonic, Samsung, Pioneer, Apple, Dell, Paramount, Fox, Sony Pictures Entertainment, and Disney Corp.
Paramount Home Entertainment announced in October that it had decided to offer high-definition movies on both HD DVD and Blu-ray. Disney and Fox have still not excluded the possibility of releasing movies in the HD DVD standard. Universal Studios and Warner Bros. Studios have thrown their support to HD DVD.
Global Impact
Not to be left out, China, which began DVD development in 1999, announced plans in October to develop its own next-generation DVD standard “to break the monopoly of foreign companies and avoid paying heavy licensing fees,” according to a report by the Associated Press (AP).
If successful, AP notes that, “the move could add a new wrinkle to the battle between HD DVD and the competing Blu-ray Disc formats over which will become the dominant new DVD standard.”
Fanning the format flames, the official Xinhua News Agency said China’s new standard will be based on, but incompatible with, HD DVD. The Chinese standard, not expected to reach markets until at least 2008, is being designed to provide higher definition, better sound, and better anti-piracy measures,” according to Lu Da, deputy director of the government-affiliated National Disc Engineering Center, as quoted by the Xinhua News Agency. "With such format and related standards," Lu said, "We could have our own voice in the DVD industry."
According to AP, the announcement “marks China's latest attempt to leverage its manufacturing muscle to play by its own terms in the home video market. Up to 80 percent of DVD players are made in China, but makers have to cough up around 40 percent of the cost of each player to license holders. HD DVD's backers say they have made inroads with Chinese manufacturers, whose support is vital to quickly deploying the technology at a low price.”
The Financial Times (TFT) relates, “Blu-Ray had long been seen as the front-runner in the battle over the next generation DVD format, thanks to the strong support of Hollywood. But HD-DVD has gained ground in recent months thanks to the backing of Microsoft and Intel.”
The TFT report also notes, "the stakes are high for both groups. The current generation DVD recorders, which use technology developed mainly by Toshiba and Matsushita, have helped to drive profits at Japan's large consumer electronics companies.” According to the HD DVD camp, over 60 million DVD players and recorders were produced worldwide last year.
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