No one wants to back the losing team. And today's consumers are savvy enough to know they don't want to be caught anywhere near the quagmire that is the turf war between competing next-generation optical disc formats Blu-ray Disc and HD-DVD. One of these formats will replace the current DVD standard for delivery of packaged entertainment, including video and games.
Consumers want to go with the winning standard, but they also want other things from the successor to DVD. The Blu-ray Disc Association is touting a new study it commissioned to gauge consumers' attitudes about the next-generation disc format, and the results shed light on aspects of consumer thinking about the future consumption of entertainment. The Blu-ray Disc Association -- which includes the likes of Apple, Dell, Hewlett-Packard, Panasonic, Philips, Pioneer, and Sony -- released the results of the independent study in early July.
The state of the war
A bit of background for those who don't follow these things: Blu-ray Disc and HD-DVD (backed by NEC and Toshiba) are both formats for high-capacity optical discs designed to play back video content as well as to store games and data. The competing formats are not compatible with one another; if you buy one type of disc, you won't be able to play it in the other type of player.
Sidestepping the technical minutiae of the two formats, the most obvious difference from a user standpoint lies in their capacity: Blu-ray Disc supports 25GB on a single-sided disc and 50GB on a double-sided disc, while HD-DVD supports 15GB on a single-sided disc and 30GB on a double-sided disc. Hollywood movie studios have publicly split on support for the two formats: 20th Century Fox, ESPN, MGM, Miramax, Sony Pictures, Touchstone, and Walt Disney Company are behind Blu-ray; and HBO and New Line Cinema, Paramount Pictures, Universal Studios, and Warner Brothers are behind HD-DVD. Further complicating the matter: None of these studios has an exclusive agreement with the camp they've backed.
Earlier this year the two sides were rumored to be in "peace talks"; however, those talks apparently broke down this spring, and the two camps are proceeding apace towards bringing their respective products to market. Still, the optimistic among us have reason to hold onto a sliver of hope: Warring parties agreed on today's DVD format at the last minute, too. Everyone -- Hollywood studios, hardware makers, and the consumers whose patronage will keep both in business -- knows that a format war will only constrain the potential growth of the high-def movie distribution market. But that doesn't mean I'd bet the condo on an amicable resolution this time.
The latest word is that we'll still see products this year -- although not necessarily as early as some of the original projections that the HD-DVD camp tossed out last January at the Consumer Electronics Show in Las Vegas. Holding up progress for both formats is the finalization of Advanced Access Content System copy protection controls, a spec that was originally expected in March 2005 and has yet to be finalized as of this writing.
It's fine for everyone involved to take their time to get the technology nailed down and do it right before they launch products, but consider this: With neither camp having locked in its format for commercially pressed video discs (the discs on which Hollywood content will be distributed for the foreseeable future), the likelihood of seeing products by September or October as HD-DVD posited at CES, or even by year's end as some Blu-ray proponents originally projected, is getting increasingly dim. I wouldn't be surprised to see some products surface in limited quantities. But given what I'm hearing now, we're unlikely to find consumer disc players or recorders on shelves for this holiday shopping season.
Compatibility is king
Now, on to the aforementioned Blu-ray Disc Association study. It was conducted in May 2005 by Penn, Schoen, and Berland Associates, which quizzed 1202 consumers aged 18 to 64 years on their views and perceptions about the successor to today's DVD format. Of the survey sample, nearly 40 percent (392 respondents) already own an HDTV setup.
Many of the study's findings seem obvious, but they nonetheless back up some common-sense assumptions about how people use and consume media.
Of the top seven qualities that survey respondents said they want in next-generation media and players, four focused on the twin desires of backward- and cross-compatibility: the ability to play today's DVDs on next-generation players and to use next-generation discs in other devices, such as gaming consoles. The strong support for compatibility every which way you can have it reflects buying and usage trends that I hear echoed by friends and colleagues alike.
First, no one wants to ditch their current DVD collections. In fact, the most desired quality in the mystery player of the future was that it should maintain backward compatibility with existing DVD content: A whopping 70 percent of respondents back this one.
Second, not everyone wants to invest in new HDTVs to replace their existing TV setups. I don't know about you, but while I was growing up, we never got rid of a TV until it died -- and even then, Dad sometimes brought it to life again, after which it found its way to some other room such as the basement, so it was near the treadmill and laundry room. Most U.S. homes have two or more TVs, and not all of them will be replaced by swanky, wide-screen high-def models.
I suspect that most people are focusing on upgrading the common areas first, such as the living room or den, with other rooms of the house to follow. And I expect a similar pattern for upgrading the playback equipment attached to those secondary and tertiary TVs: Those older TVs might be accompanied by a US$40 no-name DVD player, but they won't be the first priority for an expensive HD-capable playback box.
These impressions gel with the study's responses. Sixty percent of respondents want the next-generation disc to be able to contain both wide-screen and full-screen versions of a movie. And 57 percent want a dual-sided disc that could play a movie both in current DVD players at standard definition, and in the next-generation mystery player at high definition.
Play it anywhere
The fact that consumers were interested in using the same disc in different ways and devices surprised the Blu-ray Disc folks who commissioned this study. "The idea of a hybrid disc that works in both an existing DVD player and a Blu-ray Disc player was very strong, and underscores how convergence bubbled up to the top [of consumers' concerns]," notes Marty Gordon, vice president of Philips Electronics and spokesperson for the Blu-ray Disc Association. "The ability to play a disc [anywhere] was very important," he says.
Incidentally, the Blu-ray Disc spec already has a provision for two variations of a dual-sided disc that combines existing formats with the Blu-ray format, similar to what today's Dual-Disc format does for CD-Audio and DVD-Video. The first combo, for Blu-ray/DVD Hybrid discs, enables a disc with one side that acts as a 25GB BD-ROM (like a DVD-ROM, only of the Blu-ray variety) and the other that acts as a 8.5GB dual-layer DVD-ROM. The second combo calls for a Blu-ray/CD Hybrid disc, with one side featuring a single-layer 25GB BD-ROM and the other a 700MB CD-ROM, either as data or CD-Audio.
Finally, no one wants to keep a score card to remember which player they can pop a disc into; you want the disc to play in anything, whether it's your gaming console, PC, or set-top recorder. Once again, the study results bear this out: 62 percent of respondents indicate they'd prefer a disc that be played in any of those three devices. That makes sense, considering that the popularity of DVD-ROM drives on computers was jumpstarted by the proliferation of DVD-Video, not DVD data, discs. For those of you keeping score at home, Sony has announced it will support Blu-ray Disc in the PlayStation 3; Microsoft, meanwhile, has not announced HD-DVD support for its Xbox 360, but rumors are still swirling that a future version of the Xbox might.
Given this new level of convergence, it's possible that either Blu-ray Disc or HD-DVD will define tangible (meaning not downloaded) home entertainment in the next decade. As to which one will come out on top, I won't hazard a guess just yet.
The Blu-ray Disc Association's Gordon was unable to confirm, deny, or otherwise comment on the reported negotiations between the powerhouse companies in the Blu-ray and HD-DVD camps earlier this year. "There was a lot of rumor and speculation," he says. "You can't always believe what you read."
The prospect of unifying the formats, he says, is "very difficult, but we still have hope." The difficulty, he adds, is that "we're talking about two different physical formats, and two different philosophies. The HD-DVD philosophy has been [concerned with] the industry: cheaper discs, easier replication. From the beginning, the Blu-ray philosophy has been focused on the consumer benefits."
I found that an interesting, and valid, observation on Gordon's part: After all, HD-DVD's biggest benefits over Blu-ray involve the cost of disc production. The HD-DVD format has its evolutionary origins in the existing DVD format, which translates to lower costs for media production and disc replication. The cynical among us -- myself included -- can assume those lower costs will probably never be reflected in the prices we see at the checkout counter at Best Buy or Costco; they'll just mean a higher profit margin to studios.
By contrast, Blu-ray Disc's higher capacity and roadmap for increased capacity (up to 100GB on a single disc has been achieved in laboratory conditions), makes me think that the backers of this format are looking out for my long-term interests as a consumer. After all, if I'm going to buy my umpteenth version of the Star Wars trilogy, I'll want the highest-quality video I can get on the next-generation disc. Furthermore, I already have plenty of content to store on those discs -- so as far as I'm concerned, the more capacity, the better.
As optimistic as I'd like to be about a satisfactory resolution to the format wars, I'm fairly certain that won't happen. Still, I'm going to keep hoping against hope that the two camps can resolve their differences -- in spite of how unlikely that might seem, given the fact that to do so means, for all intents and purposes, that one camp will likely have to write off substantial R&D costs and lose out on potential royalties.
The industry is not blind to the impending nightmare if both formats go to market. As Gordon notes, "No one wants a format war. The thought of one fills everyone -- consumers and industry alike -- with angst."
Perhaps the most telling stat in the whole study is the one that indicates consumers' indecision as to which format they'd choose if Hollywood studios remain split. Technology and company backing aside, when consumers were asked which disc they'd choose, if the only consideration is that "two similar, but non-compatible formats of next-generation discs were supported by different entertainment companies," a whopping 67 percent say they're undecided. That doesn't bode well for future sales of anybody's players or media.