HD DVD will Win!

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Optical HD Battle May Be Over: HD-DVD Wins
By Rob Enderle
December 6th, 2006


Nearly a year and a half ago I wrote a column saying that Blu-Ray wins or nothing does. This showcases the reality of doing predictions because while the analysis held up, events did not pan out as anticipated and by any current measure HD-DVD will end this year with a decisive win.

The basis for the prediction, which did accurately point out that Sony’s win here might actually cost them more than a loss, was the PS3 and the forecast volumes for that product. Back in August of 2005 we did know that HD-DVD, which used DVD production technology, would be easier to bring to market but it simply did not seem reasonable that Sony would put their PlayStation franchise at risk for anything but a technology they were absolutely certain they could bring to market on time.

That turned out to be incorrect. The problems with Blu-Ray have created extreme cost and execution problems for Sony and now their premier division (instead of being the profit center for Sony) is predicting they will take a $1.5B loss next year largely resulting from this decision. To put this in perspective, just think what would happen if Apple’s iPod group, instead of generating massive profit, suddenly dropped into massive loss. Now you can see why the Sony PlayStation division just changed out their top executives.

Why HD-DVD is Wining

When you talk to either the HD-DVD or the Blu-Ray camp you get the sense that neither actually watches movies much. Both cite features as the reason why folks will pick one or the other. Yes there is a lame shooting game in League of Extraordinary Gentlemen (Blu-Ray) and there are a ton of things you can do interactively in HD-DVD (including changing car colors in one scene in The Fast and Furious III: Tokyo Drift). But the movie market moves on quality of movie, price of player, and price and availability of media.

At launch HD-DVD players were about half the price of Blu-Ray players and the movie price for HD-DVD is generally running about $5 less. In addition, many of the new HD-DVD movies also have regular DVD side which means that buyers, most of which will have both HD-DVD and DVD decks, will get better value with HD-DVD than with Blu-Ray – that’s the theory anyways.

All that being said, the killing blow may have been done by Microsoft who decided to bring to market a $200 HD-DVD option for their Xbox 360 which has been in market a year longer than Sony and is projected to have a near 20x installed base advantage by year end (10M Xbox 360 to 600K PS3). Note that both projections are aggressive but Sony was supposed to originally ship 2M PS3s into the market during the 4th quarter and actual numbers (given they had under 200K at launch) may be closer to 400K. And with a recall possible there is a chance they might not even make that. Add to this that the Xbox 360 HD-DVD drive is for movies only, so each one counts for movie viewing while PS3s may not be used to watch movies and you have a situation where the active movie player advantage by year-end should be between 4x and 6x better for HD-DVD over Blu-Ray.

Finally, HP who had been a big Blu-Ray supporter and dominates the Media Center PC market, introduced a $100 HD-DVD upgrade for their PCs (Sony’s Blu-Ray VIAO solution was just dropped to $749). The impact of this last move is still too early to measure but there is no comparably priced (not even close) solution using Blu-Ray.

If you go to Amazon and look you can see HD-DVDs are solidly ahead and this is before the impact of either the Microsoft or the HP moves, many of which won’t be opened until Christmas or haven’t yet been shipped (HP).

Now Sony will stick with a technology for years after the market has decided on another path and they do have some very strong supporters which include Dell, Apple, and Disney. Dell traditionally has been the PC bellwether company, Apple has the most loyal customer base, and Disney is the only Studio that people ask for by name. So these folks, particularly Sony, could drag this on for years. But if that is the case not only will many in the industry not make money, Sony will probably lose the most because they are still the ones doing the heavy lifting (In addition, after the battery problems, neither Dell nor Apple is as close to Sony as they had been).

Right now it appears impossible for Blu-Ray to gain a substantial lead on HD-DVD, even after massive investment, they likely could only close the gap. If the HD market depends on the emergence of one as a standard and Blu-Ray no longer has a chance to be that standard, how long will it be before the Blu-Ray supporters follow HP and switch sides?

Do You Want One Standard?

Now you can evidently help drive this if you are so inclined. There is a petition that has been set up for you to voice your support if you believe that there should be only one and HD-DVD is that one. You can find the petition here . Evidently they had collected 2,300 signatures at the time of this writing.

The petition was put together by HD NOW where the folks have collected a rather interesting list of supporting material which goes far farther than I have on supporting the conclusion that we’ve prematurely crossed over to the point where HD-DVD has won the High Definition DVD competition.

Does Blu-Ray Die?

Blu-Ray has substantial storage capacity advantages for data and could survive as a high capacity personal computer storage medium. While expensive, one non-Sony vendor’s upcoming Blu-Ray laptop solution costs around $800 on top of a $3000 notebook but it gives that product an unmatched removable media capability. But this is a vastly better storage solution for a high-end PC it isn’t a high volume high definition movie watching solution.

So BluRay could indeed survive but probably not for movies only for PS3 games and high-end optical backup. The real question is does the PS3 survive or whether there will ever be a PS4. Some are saying that the PS3 is in deep trouble and some are saying the PS4 will never arrive with massive game defections from PS3 to Xbox.

Wrapping Up

The market wants one solution for High Definition video and we are already starting to see high definition downloads through services like Xbox live. Apple’s iTV is expected to go even further when it launches early next year. It may actually be too late for either of these platforms to move; if folks move aggressively to downloads for high definition content and if High Definition pay per view cable offerings continue to improve, even if I’m correct and HD-DVD has won, it may have actually prevailed too late in the process to survive for long.

Be that as it may, with a 4x to 6x advantage by year end, you’d have to conclude that HD-DVD has reached a point where it can’t lose and Blu-Ray is only now in a position to ensure both platforms lose. That last option still appears most likely if the market doesn’t move aggressively to one HD platform.
 
The last paragraph is my favorite.

Well, I vote for the most interesting paragraph. I keep reading more an more of downloading and/or video on demand as the "wave of the future". I certainly see both as growing markets, but look at how many folks now have video on demand / pay per view from cable & satellite and I bet 90% of them still have at least one DVD player and own & rent DVD's. Something will have to suceed the DVD format for the folks who prefer the satisfaction of owning their own copy of a movie. I have Dish HD service, but still have a reasonable large DVD collection, a growing HD DVD collection, and still have a Netflix subscription. And I think there's a big roadblock to video downloading - the ISP's are not going to stand for massive numbers of subsribers downloading gigabytes of video without charging additional fees. The large DSL & cable IPS's are already grumbling about MyTube, Yahoo, Goggle getting a "free ride" on "their" networks. Folks like me out in the sticks are already eliminated from downloading any meaningful amounts of video - Satellite Internet providers enforce strick FAP's (Fair Access Policy) restricting the amount of data that can downloaded monthly or even daily. Cable & DSL providers have similar FAP's, they're just enforcing them as vigorously - yet.

But, as to the main focus of the article, I think it was very fair and accurate, and I agree completely that HD DVD has already won for HD movie format war. Blu-Ray might survive has a format for Playstation and computer data storage, but I doubt it.
 
First, there is no recall coming on the PS3. That statement is pure BS. Second, while the HD-DVD drive on the XBOX360 is a great deal at the end of the year we will still be only looking at about the same percetage of HD-DVD drives to BluRay drives. There is no way that there are going to be 300,000 HD-DVD drives sold for the 360 by the end of the year.

Eventually, with other BluRay players coming out there will be as many BluRay players as HD-DVD. I predict that by March there will be more BluRay players in homes then HD-DVD. Maybe that is why M$ is bringing out a new 360 model with an internal HD-DVD drive and HDMI. Whoops, I am not supposed to be talking abou that right now.

If there is no movement of studios over to the HD-DVD market then how in the world is HD-DVD going to win? And win what? Folks in Japan are not going to buy one. Folks in Europe are not going to buy into a product that produces HD with less bitrates.

And while we are on it, it is not possible to do a two hour movie in HD in 7mb right now. There is no compression technique out there that can do this -- not right now. So how can M$ download a movie in HD in 7mb? The same way DirectTv does it -- in 1200 x 1080i. That is not true HD -- it might be acceptable to DirectTv owners but not anyone who is serious about true HD. Come on, I can't be the only one here who can do the math, can I?
 
yea i too would like to know the rumor about a recall.but i would like to disagree with the statement that there will be as more blu ray players in the home vers hd-dvd i must disagree on 2 points .first if you buy a hd-dvd movie that has 1 side just dvd that person can future proof themselves their movie collection basicly not needing to buy the same movie twice. second just the cost of the players alone will determine the ratio of blu ray players to hd-dvd .i dont see disney making a format decision till there is a clear winner disney inst one to jump into a new format look how long it took them to make dvd of there classic movies .
 
Heres the story about the recall but it was found out to be fake.

Digg Being Useless: PS3 Recall Article
I don’t spend a whole lot of time on Digg, but tonight I thought I’d check it out and see if there was anything interesting.

I’m looking through the front page, and there’s an article with 300+ Diggs called “Just out from Reuters 650,000 PS3s to be recalled!!”

TOKYO, Nov 20 2006 (Reuters) - Sony Corp. said on Monday its new video game console, the PlayStation 3, has a fatal flaw in its core graphics processor, and will require the recall of nearly 650,000 units, causing widespread shortages of the much anticipated gaming console throught the US, Europe, and Asia.

However, the link was actually to some random discussion forum, not to Reuters, and it was obviously a fake article; the last paragraph was this:

Sony, which has dominated the game market over the past decade, has in recent years stumbled under the heavy weight of competion from Microsoft. A spokesperson from Sony was quoted as saying. “We just can’t compete with The XBOX, it’s cheaper and techologically more advanced than the Playstation, I think this might be the Playstations final year.”

http://fakerake.com/2006/159/digg-being-useless-ps3-recall-article/
 
Heres the story about the recall but it was found out to be fake.

Digg Being Useless: PS3 Recall Article
I don’t spend a whole lot of time on Digg, but tonight I thought I’d check it out and see if there was anything interesting.

I’m looking through the front page, and there’s an article with 300+ Diggs called “Just out from Reuters 650,000 PS3s to be recalled!!”

TOKYO, Nov 20 2006 (Reuters) - Sony Corp. said on Monday its new video game console, the PlayStation 3, has a fatal flaw in its core graphics processor, and will require the recall of nearly 650,000 units, causing widespread shortages of the much anticipated gaming console throught the US, Europe, and Asia.

However, the link was actually to some random discussion forum, not to Reuters, and it was obviously a fake article; the last paragraph was this:

Sony, which has dominated the game market over the past decade, has in recent years stumbled under the heavy weight of competion from Microsoft. A spokesperson from Sony was quoted as saying. “We just can’t compete with The XBOX, it’s cheaper and techologically more advanced than the Playstation, I think this might be the Playstations final year.”

http://fakerake.com/2006/159/digg-being-useless-ps3-recall-article/

LOLOLOLL thats what this guy is basing part of his article off of? wow, I am now going to say this guy is full of crap!!!! Facts please!
 
Well 1st what will dictate this is the movie industry! Right now Blu-Ray is the winner due to 7 out of 8 big movie companies have already said they were choosing Blu-Ray format. Also most of the hardware companies like LG,Lite-On,Sony,Pioneer and many other have chosen to do Blu-Ray.l Where HD-DVD has little support Toshiba is one of the few that support HD-DVD. Over all they will half to reach a agreement but it's easy to see the forces that drive this have chosen Blu-Ray.Overall the PQ is going to be about the same but Blu-Ray has more space and just has more capabilities. So hardware companies are going to make players and recorders for the format that has the most support from the movie industry. Right now that is Blu-Ray.
 
If the story is fake why post it? Everything about the story is BS. But thanks for posting and admiting it as a fake.
 
Well 1st what will dictate this is the movie industry! Right now Blu-Ray is the winner due to 7 out of 8 big movie companies have already said they were choosing Blu-Ray format. Also most of the hardware companies like LG,Lite-On,Sony,Pioneer and many other have chosen to do Blu-Ray.l Where HD-DVD has little support Toshiba is one of the few that support HD-DVD. Over all they will half to reach a agreement but it's easy to see the forces that drive this have chosen Blu-Ray.Overall the PQ is going to be about the same but Blu-Ray has more space and just has more capabilities. So hardware companies are going to make players and recorders for the format that has the most support from the movie industry. Right now that is Blu-Ray.

First of all, I had to check the date of your post - it could have easily been Dec. 7, 2005. Everything you cited was being cited this time last year, with many 'experts' questioning why even bothering to launch HD DVD. However, one little clarification: 7 of 8 studios have NOT "chosen Blu-Ray. Logically assuming "chosen" means to release in Blu-Ray soley, then only 3 studios have "chosen" Blu-Ray - Disney, Fox and Sony. Four studios have chosen to release on both formats and let the consumer decide (loud round of appluase) and Universal has chosen HD DVD soley.

So, this time last year everyone was citing more studio & hardware support, Blu-Ray having more bitrate capability, and theoretically more disk space. But as of right now, 4 to 6 times the number of consumers are chosing HD DVD over Bluray. What happened? Well, Toshiba released a superior player costing half as much as a BR player. HD DVD embraced the more efficient VC-1 codec, making the 30 GB vs. 50 GB dual layer capabilities of the formats not as important a factor. The early HD DVD disk releases were generally outstanding while Sony's first BR releases were an embarassment at best. The first BR player from Samsung was buggy at best. Releases of other BR players kept getting pushed back, Sony can't produce significant numbers of PS3 players, many gamer resent the PS3 BR player being "pushed" onto them at a signifcant cost increase to the game console most gamers purchase the PS3 for, and Microsoft releases a $199 HD DVD add-on for the XBox gamers to chose if they desire a high-def player for their game console.

And, no, the movie industry will not "dictate" anything. it is the consumer who dictates the success of a product by "voting" with their wallets. And this "election" so far is a landslide for HD DVD.
 
It really seem strange that the BD people are not buying the movies. With the realease of the PS3 they instantly had the numbers on their side. I think they would be buying every movie they could get their hands on. That's what I did when I first got my HD DVD in April. Maybe the gamers are revolting because they where forced to get Blue-Ray with the PS3. If that is true, the theory that Sony was counting on (PS3 would sell Blue-Ray movies) just blew up in their face. To Bad! :D
 
Yep. I'd love to know by Xmas 07, but it looks like the war may "keep on going." Of course, if several good players become available for under $400, it may not matter much, they might both stick around. Hope not.
 
The real victory of HD-DVD right now is that the installed base is getting too big to be just dropped. This means that Sony will have to give in eventually and allow Blu-Ray licensing to dual format players. Once those hit the market both formats will disappear as far as the consumer is concerned. There will just be high definition DVDs some will be reddish some bluish...
 
How large was the installed base of Divx when it was dropped? How large for laser disks? That dumb RCA capacitance-needle video disk (I forget the name)? For that matter, how large was the installed base of Voom customers?

How many Peugeot owners in this country when they decamped? Renault?

Vinyl records, 8 tracks, music DAT, etc?

A few hundred thousand now out of a market that will eventually have an installed base of 50 to 100 million in this country is nothing.
 
It really seem strange that the BD people are not buying the movies. With the realease of the PS3 they instantly had the numbers on their side. I think they would be buying every movie they could get their hands on. That's what I did when I first got my HD DVD in April. Maybe the gamers are revolting because they where forced to get Blue-Ray with the PS3. If that is true, the theory that Sony was counting on (PS3 would sell Blue-Ray movies) just blew up in their face. To Bad! :D

I have purchased 12 BluRay movies as I purchased the PS3 as a BluRay player first. I have read on some other sites that the PS3 has indeed increased BluRAy movie sales. I think you should hold off on your gloating until after Jan 1st. When we get to see the real numbers for BluRay movie purchases for December vs the real numbers for HD-DVD I don't think you are going to see that HD-DVD is running away from BluRay but that BluRay is catching up to HD-DVD.;)
 
http://www.blu-ray.com/

Well Blu-Ray most likely will win and most movies studios have chosen Blu-Ray as well as hardware makers.

If you look at their main site everyone will see that there is more Blu-ray hardware than HDDVD. Most of this hardware is shown at this years CES show and more will be there in the 07 CES show.

Right now Blu-Rays have more space. For HD DVD, that means capacities of 15GB and 30GB; for Blu-ray, its 25GB and 50GB. This could change but overall Blu-Ray has more support from the industry leaders in the entertainment side of things where HDDVD it's mainly Toshiba and Microsoft. Also from most users the Blu-Ray movies look a lot better than HDDVD. Like I said and what it says below that movie industry will help alot in determing what format will be used. Right now most of them are going Blu-ray along with the hardware compaines.

Here some info as well.

http://www.tvpredictions.com/bluraywins102306.htm

Washington, D.C. (October 23, 2006) -- Sony has launched a new HDTV DVD format called Blu-ray. Toshiba is backing a rival format called HD-DVD.

Who will win this format war?

I predict that it will be Sony. And here are five reasons why:

1. Studio Support
Seven of the eight major studios have announced support for Blu-ray (Universal is the lone hold out) and four of them are backing it exclusively (they won't release titles in the HD-DVD format). This will give Blu-ray a tremendous advantage in the number of available titles in the new HDTV DVD category.

2. Play Station 3
Sony next month will launch the Play Station 3 video game console. The device, which will play Blu-ray DVDs, is expected to sell millions over the next 12-18 months -- despite a price tag of $499 or $599 (depending upon the system’s storage capability.)

While it's true that Microsoft will soon sell a HD-DVD adapter with its XBox 360 console, the high-def DVD player will require a separate purchase ($199).

But PS3 comes with Blu-ray regardless of whether you want it or not. Consequently, a large number of PS3 owners will likely give Blu-ray a try because they have nothing to lose.



3. Price
How can Blu-ray have a price advantage when a HD-DVD player costs $499 and a Blu-ray player now costs $999?

To date, both high-def formats have been a disaster. Remembering the Beta vs. VHS format war of the 1980s, consumers are hesitant to buy either Blu-ray or HD-DVD because they fear they will pick the wrong format.

Consequently, Toshiba is currently not benefiting significantly from the lower price tag.

However, in 2007, you can bet that Blu-ray players will drop in price, perhaps even equaling HD-DVD's retail cost. The price reduction will generate significant media buzz, giving Blu-ray an advantage as more consumers become interested in the new players.

4. Politics
In 2007, the four studios that currently back both HD-DVD and Blu-ray will begin to question the economics of releasing titles in both formats. At some point, they will feel internal pressure to pick a winner. And if Blu-ray starts to generate more sales due to the above three reasons, they will pick Blu-ray.

5. Peace Treaty
Also in 2007, Toshiba will see the handwriting on the wall and initiate peace talks with Sony. The companies in 2005 discussed making Blu-ray the only format, but talks broke off late in the year. No surprise there; it was wise for Toshiba to first test the market before making concessions.

So I predict that Blu-ray will emerge as the dominant format in the HDTV DVD war in 2007, which will eventually lead to a negotiated settlement between Sony and Toshiba.

And once Blu-ray is established as the single HDTV DVD format, consumers will drop their reluctance and begin buying the new players.


So overall there will be more movie titles in Blu-Ray which means most hardware companies will make more Blu-Ray players and recorders for the home and PC. Why simply because there will be more Blu-Ray titles out there than HDDVD so manufactures will make hardware for whatever there is more of. Either way they are both good just that the other one is better and has more support from the industry that drive it which for now is Blu-Ray. Again this will show again at the next CES show when we will see again more hardware out there for Blu-Ray. If you look at their site most of the photos they have come from this years show which show everyone what they hardware companies are picking which from what I see its Blu-Ray. This just my 2cents time will tell for sure. :)

http://www.blu-ray.com/
 
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