BPN 1013 HD-DVD: It’s over

Toshiba stops promoting the HD-DVD format. From today on the company will decrease the distribution of the HD-DVD players and recorders, and by the end of March it will stop the entire distribution. Toshiba terminates the product line of players and recorders, as film studios and retail chains no longer supported the DVD format.

This is a real blow for Toshiba. The Japanese company had built up a slew of movie companies, hardware and software manufacturers as well as retail chains for the distribution of the HD-DVD players, recorders and titles. And now the game is over for Toshiba and its following, which includes Microsoft as the most prominent partner. Toshiba and the companies which followed will have to write off a lot of money on the research, production and stock. (Save a recorder/player and several titles for the Museum of the Future, for digital heritage's sake, please).

This decision proves that the market will not take two different formats for its edutainment products, certainly not when exclusive deals are being made. This was already clear from the history of the first DVD series, when Toshiba also tried to set up its own format, but bowed for the pressure of IBM, being helped by Philips.

Does this mean that Philips and Sony have won? This depends on the horizon of duration of this format. One lesson has been learned. Despite the fact that movie titles are a driving force of the DVD and HD-DVD format, the format of the second generation of DVDs has been dictated by the game world. Sony built in the Blu-ray in the PlayStation. Microsoft offered HD-DVD optionally for XBox users; HD-DVD would have had a better chance if they had been built in.

So now the victory march for Philips and Sony can begin. Their stock prices will rise a little bit, I guess. Just for some days and no longer than that. For DVD is no longer a real money maker for Philips or Sony. The recorders of Philips and Sony are still pricy, the players will drop and be given away, when you buy a few movie titles. But it is not the manufacturing which makes money for Philips and Sony in the field of DVD and Blu-ray, but it is the stream of license money on the patents. With the sale of every non-Philips and non Sony hardware as well as the discs, the cash till will rattle; be it for a few euro cents, yet we are talking about millions of pieces of hardware and discs.

The victory might also be short-lived as glass fibre becomes more common. By offering glass fibre connections, the need for DVD and its second generation will decrease, as the speed of downloading will increase dramatically. In fact it will be just as a milestone as the change from dial-up to ADSL was., but then exponentially. The whole optical disc movement which started in 1984 is temporary as optical discs contain only frozen online.

The DVD format war is over after two years. Let it be a lesson for the future.

Blog Posting Number: 10012

Tags: DVD, DVD format, HD-DVD, Blu-ray

Warner Bros. takes Blu-ray stand

The entertainment company Warner Bros. has decided to publish movies exclusively in the Blu-ray DVD format from June 1, 2008 onwards. This is a heavy blow for the Toshiba and Microsoft, who support the HD-DVD format.


Many signs point to the end play of this company power game between industrial camps. It is clear that consumers are not being impressed by technology specs, but want one format and a reasonably priced DVD player. It is the old video recorder lesson, when JVC won from Sony’s Betamax and Philips’ V2000 (they also happen to be technically superior to the JVC recorder).

In the development of the first DVD format a dichotomy was also showing between the CD inventors Sony/Philips and Toshiba. But pressured by IBM and some armwresling by Jan Timmer the companies produced one standard format. And again Toshiba split off when the high definition DVD had to be standardised. The main difference between the two formats is in the storage capability; the Blue-ray format can comprise 25GB on a single layer and HD-DVD can contain 15GB. Of course both camps hold several patents, which they like to use in their players.

Why does it look like an end-play? With Warner Bros. taking sides with Blu-ray all kind of rumours spring up and certainly during the Consumer Electronics Show, which is being held. Toshiba was supposed to hold a press conference at CES, but cancelled, feeding speculations. So, rumour has it that Apple will implement a Blu-ray DVD player in its new computer model. And to top it all even the movie company Paramount is said to return to the Blu-ray DVD club with Philips and Sony.

However the consumer is putting on pressure too. The consumer is not going to buy two high definition DVD recorders, except for the buffs. But presently the economic crisis is not contributing either to the sale of high definition DVD recorders. First the mortgage and then the luxury. With this tight budget – if one still has some room in the budget – people do not want to be confronted with a choice out of two and a lock-in by technology. Consumers look at the camp with the most movies and the most solid commitment; last April Toshiba sold its movie and DVD division. And movie companies look at the market place and ask themselves where they can sell most.

Also regional differences play a role in the DVD format battle. Blu-ray and HD-DVD are in direct battle on the US market and HD-DVD has an edge on Blu-Ray. The companies always introduce their devices at a later point in time in Asia and Europe. In Europe Blu-ray is ahead due to its implementation in Play Station 3; Microsoft delivers to the Xbox an optional HD-DVD player.

So the end-play has started. When will it be over? I guess that HD-DVD will be over and buried by the summer, certainly if more movie companies join Blu-ray and Microsoft starts implementing Blu-ray in its new edition of Xbox.

Blog Posting Number: 973

Tags: DVD format, HD-DVD, Blu-ray

DVD Forum anniversary party rudely disturbed

This month the DVD Forum celebrates its 10th anniversary. And the members of this international organization that defines formats for DVD products and technologies, took care of the fire crackers: Paramount will exclusively use the HD-DVD format for releasing its movies for one year.

The Forum is a collaboration between the consumer electronics, IT and entertainment industries and was founded in August 1997. It assumed and extended the work of the DVD Consortium, the ten-company organization that initially developed the DVD format. When it started its work in developing the DVD format and promoting its widespread dissemination, the DVD Forum counted 86 members. Today, it has about 220 member companies, drawn from all over the world.

The launch of DVD was one of the most successful consumer product launches in history. An immediate hit with consumers around the world, DVD brought new and exciting capabilities to home entertainment, computing and gaming, and created an immense global market: 2006 demand for DVD players and recorders stood at over 110 million units, and reached about 290 million units for DVD drives. In the same year, 1.7 billion DVD movie discs were shipped in the North America, while shipments of recordable discs climbed to 5.1 billion discs globally.

In an anniversary message, it reads: This extraordinary success rests on the concerted efforts and long-term support of the DVD Forum. The Forum assured the versatility and wide-ranging applicability of DVD by defining key specifications that met diverse needs, including those for DVD-ROM, DVD-Video, DVD-R, DVD-RAM, DVD-Audio, DVD-RW, and DVD-Video Recording(5). The Forum continues to define the future for DVD, and is now promoting development of HD DVD, the next generation DVD format -- based on blue laser -- and working on the development of an integrated networking environment -- extending DVD formats to adapt to the expanding online world.

But the anniversary party has been rudely disturbed by the fire crackers of Paramount movie studios and its subsidiary Dreamworks. Paramount has chosen to release movies in the HD-DVD format only for one year. The company hopes to force a format dominance on the market. Paramount follows the lead of Universal Pictures which had exclusively chosen for HD-DVD as its only release format. According to The Wall Street Journal, Paramount will get money and promotion assistance for one year in lieu for the format exclusivity. (from what company will it get money? Microsoft?).

This fight has always been immanent since the two DVD format parties of HD-DVD and Blu-Ray could not agree. They nicely went ahead, but both knew that the fight was going to be on the commercial battlefield: the consumer will decide. Dreamworks indicated that it chose for the HD-DVD format not for the financial support the studios get for it, but because the HD-DVD player costs less than 300 dollar. The cheapest Blu-Ray player costs 449 dollars.

Is that argument valid? I do not think so. Mr Katzenberg of Dreamworks should know his classics and remember that the video tape fight in 1980 was won by the company which had the most content, regardless the genre. Can Universal and Paramount offer the consumer so much content in only HD-DVD format, that Blu-Ray will wither? Forget it. For the DVD is not only a movie format, but also a game format. Sony uses Blu-Ray for its Playstation and Microsoft’s Xbox plays HD-DVD.

The battle field is larger than the movie industry and Universal Pictures and Paramount will not o dictate the format. The HD-DVD camp with Masushita, Microsoft, Universal and Paramount will battle the Blu-Ray camp of Philips/Sony, Walt Disney and News Corp. Which company will have the largest offer of entertainment products; that is the question.

Paramount will review its stance after a year. By then the company will find itself in isolation and will have lost a lot of money by not selling its movies to the Blu-Ray community or it will have gained a dominance in the movie world, but not in the gaming world, which has other buying rules. In both cases the consumer will loose.

Blog Posting Number: 846

Tags: DVD format