In the DVD War Over High Definition, Most Buyers Are Sitting It Out

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http://www.nytimes.com/2007/12/31/business/31dvd.html?_r=1&ref=business&oref=sloginhttp://www.nytimes.com/2007/12/31/bu...l?ref=business


In the DVD War Over High Definition, Most Buyers Are Sitting It Out
By ERIC A. TAUB

What if nobody wins the high-definition DVD format wars? That increasingly looks to be the situation for the next-generation DVD technology, which is available to consumers in two incompatible formats.

A little more than 18 months after their introduction, the two systems — Blu-ray, developed by Sony, and HD DVD, from Toshiba — have sold around one million stand-alone players combined. Both sides promote their technologies, their movie studio allies and the growing list of movies available in the new formats.

Yet neither has a clear advantage, either in terms of technology, number of movies or, increasingly, the price of the equipment. According to data from Adams Media Research, 578,000 HD DVD and 370,000 Blu-ray machines will be sold by the end of this year.

The winner of the format wars could be determined by which company has the most content, in the same way the VHS-Betamax VCR war was decided. But both formats offer about 400 movies. Studios allied with the Blu-ray camp include Columbia, Disney, Fox, Lionsgate, Miramax, New Line and Sony.

In the HD DVD camp are DreamWorks, Paramount, Universal, the Weinstein Company, and several smaller TV and motion picture companies. Warner Brothers releases movies for both systems.

In November, Howard Stringer, the Sony chairman, publicly acknowledged that the formats were in a stalemate, and predicted that neither side would fold.

High-definition DVDs of both formats provide superior picture and sound quality compared with standard DVDs.

They also offer advanced interactive features like multiple camera angles, games, picture-in-picture commentaries and, in the case of HD DVD, a connection to the Internet to download more content.

But the visual and audio differences depend on the size of the TV screen used to display them.

“You start to enjoy the benefits of high-definition DVD at 40 inches and above,” said Chris Fawcett, vice president for product marketing at Sony Electronics’ home video group.

Only high-definition sets can display high-definition DVD images. And only the highest-resolution displays, the so-called 1080p HDTVs, for progressive scan, can show the images at their best. As a result, the potential customer base is limited. With a lower-resolution 720p set, “you are not as likely to see a dramatic a difference” between standard and high-definition DVDs, according to Andy Parsons, chairman of the Blu-ray Disc Association.

The two camps are victims of their own earlier success with DVD. The standard DVDs offered a quantum leap in quality from the picture and sound of VHS videotape, and for many that was more than adequate.

In addition, DVD players that can convert images to near high-definition quality can be found for under $100, hundreds less than a true high-definition DVD player, further reducing the urgency to upgrade to one of the new formats.

“Today, an HDTV owner hooks up a standard DVD and it looks good,” said Ken Graffeo, executive vice president of HD Strategic Marketing at Universal, and co-president of the HD DVD Promotional Group. “Unless they experience the new format, they won’t understand it.”

Not many consumers are interested in even taking a look. According to research by NPD Group, only 11 percent of HDTV set owners strongly intend to buy a Blu-ray or HD DVD player by next spring. Almost three-quarters of those HDTV owners surveyed said that standard DVD was good enough for them.

“This may emerge as a premium, luxury item, not a successor to DVD,” said Ross Rubin, director for industry analysis at NPD.

Blu-ray and HD DVD proponents are doing what they can to change that attitude. And the best technique to pique interest is dropping the price. As with most things electronic, prices for both players have fallen drastically since their introduction.

HD DVD players, the vast majority of which are made by Toshiba, still have the price advantage. The company’s least-expensive model — which displays images in the lower-quality 1080i format — can be found for $200 or less in electronics store promotions or from online discounters.

Its least-expensive 1080p model is selling at Amazon for $250. But it is a tit-for-tat war. A Blu-ray 1080p unit from Samsung is just $30 more at Costco. Blu-ray units are also made by Panasonic, Philips, Sony and others.

Several holiday promotions had players in either version selling for as low as $200.

In an effort to finesse the format war, LG sells a combination unit that plays both formats; however, its $1,000 price has prompted only a few thousand consumers to buy.

As prices drop, high-definition DVD drives will find their way into other devices. Mr. Graffeo predicts that by the end of next year, 5 million notebook computers will be sold with HD DVD drives.

Sony says that 3.4 million Blu-ray disc drives are also in PlayStation 3 machines, giving it a numerical advantage. But the rival camp points out that gamers are not buying the PS3 to watch movies, and in any case, 300,000 HD DVD add-on drives will have been purchased to use with the Xbox 360 game console from Microsoft.

The 400 movies available in each format are a fraction of the 90,000 movies and TV programs that the video rental company Netflix offers. Increasingly, high-definition DVDs are being issued simultaneously with the standard definition DVD release.

Consumers are usually advised to wait until a clear winner emerges. But if there is a deciding factor, it might be which format has the more compelling movies. Good animation looks three-dimensional in high definition, so Sony is hoping to gain an advantage by providing Blu-ray formats of “Ratatouille,” the Disney/Pixar film about a cute French rat who cooks, and blockbusters like “Spider-Man 3.”

As an indication of their owners’ enthusiasm, Blu-ray users are buying twice as many discs as their HD DVD counterparts, according to Tom Adams, president of Adams Media Research.

Discs can be rented at the Blockbuster and Netflix online stores. Of Blockbuster’s 5,000 physical stores, 250 offer both high-definition DVD formats, while 1,450 rent only Blu-ray; the rest offer none. The company emphasizes Blu-ray because 70 percent of its rentals are for that format, said Karen Raskopf, a Blockbuster spokeswoman.

The HD DVD camp is playing up its new interactive features, believing that the next generation of viewers wants to combine TV viewing with video games.

In Universal’s just-released HD DVD of “The Bourne Ultimatum,” viewers can play a game that tests their memories, and then upload their results using a broadband connection to a Web site and compare their scores with others.

Viewers can also find character dossiers, watch “Webisodes” with the Volkswagen Touareg sport utility vehicle featured in the film, and create playlists of their favorite scenes and share them with friends.

Those features will do little to increase sales, said Richard Doherty, an analyst with the Envisioneering Group. The market consultants’ surveys show that just 3 percent of consumers want interactivity, he said.

As more consumers buy HDTVs, and the price of dual format players drop, an uneasy truce may descend. With the studios in the United States collectively making $16.5 billion in worldwide video sales, according to Mr. Adams, companies will be loath to miss an opportunity to make money by allying themselves with one high-definition DVD format over the other. And then, the once-unthinkable could happen.

“When high-definition DVD reaches its tipping point, studios will have to release their movies in both HD DVD and Blu-ray,” Mr. Adams said. “No studio will be able to afford not to.”
 
I completely agree with the final statment....


but i think it will be some time after Xmass 2008 or even 2009(becasue of bribes and payoffs) that this will happen... if it happens sooner great but i will not hold my breath.

If all studios go nutral.. hold on to your hats everyone. then the real "Price WAR" will begin.
 
I completely agree with the final statment....


but i think it will be some time after Xmass 2008 or even 2009(becasue of bribes and payoffs) that this will happen... if it happens sooner great but i will not hold my breath.

If all studios go nutral.. hold on to your hats everyone. then the real "Price WAR" will begin.

I agree,


The more I think about it; the more frustrated I am that this whole HD vs BD format imcompatibility ever had to happen. Couldn't people have remembered VHS vs. Betamax. :eek:
 
I agree,


The more I think about it; the more frustrated I am that this whole HD vs BD format imcompatibility ever had to happen. Couldn't people have remembered VHS vs. Betamax. :eek:

Yeah i was lucky enough to be part of that as well.

Going to the video rental store (Video Tyme) every day just to see if they had the one rental copy of Robocop on betamax...

that was what convinced my dad that we needed a VHS and that Beta was dying...

Those expensive Betamax machines might i add...
 
I bought my first vcr in 1981 and it cost $650.00 . It was a panasonic top loading model. It worked for years till the early 90s and till a lightening strike hit my apartment building and I had no surge protector and it fried my box. So I never tried beta max at all. I never even saw a tape by them at all to compare. VCR was heavily promoted back then in most electronic stores in my area . Vcr tapes were heavily promoted in adult movies back then too. I think that was what settled the whole format war back then: PORN . To bad we can't get this one settled as fast , but with high definition being so clear, we might not want to see adult porn actors that closely and clearly. So maybe price will be the settling factor in the hd dvd vs blue ray battle.
 
People forget real history so easy.

Originally, Sony made the Betamax system as a replacement for the movie super 8 film camera. It was a portapack 2 piece system and later they made a onepiece camcorder. It was called BetaMovie. Sony's original marketing plan was to enter the consumer market with a product meant for home movies replacing the super 8 film camera.
About the same time, JVC invented the Video Home System, VHS, and marketed it for videos of Hollywood movies. From the start, JVC wined and dined the Movie studios to release VHS versions to be sold for home viewing. But JVC saw the potential for what Sony was doing too and wanted in on the game. So, JVC licensed Panasonic to build a Portapak VHS under both Panasonic name and Quasar brand name. It was a small top loading portable 12 volt powered VCR cable fed to a color camera. It worked quite well. I had the Quasar version in 1980. Sony, decided to do the same with Betamax and made the first betamax set top box VCR with a built in TV tuner to match those made by Panasonic, and JVC. However, JVC had a head start with Hollywood so they became the dominate format. Basically, they were first. Sony was second and a me too with the Hollywood movies for home viewing. In the early days of Betamax and VHS it was said that Betamax was superior. This was true as far as features goes. Betamax allowed tape pausing and picture on screen while fast forwarding. VHS could not do that. Pausing on VHS was reduced to snow. But that didn't matter because the public just wanted movies and VHS offered that. Sony lost because their BetaMovie idea only caught on to a small segment of society who wanted to make home movies. Most of the public just wanted to watch movvies AND time shift their TV programming which the second generation VHS VCR's offered. Interestingly, the first generation Betamax VCR's offered that too but if there were few to no movies, who would buy it? In a few years, Betamax lost out and the format began to evolve into several esoteric special formats that were short lived for the express purpose of home movie making.
While many like to compare this betamax vs VHS with the HD formats today, The situation is different and as such, can't use that history to predict the outcome-
Today, the feature rich format is HD DVD. But the moviestudios count on board is favoring BluRay. However, the number of DVD's in either format is a close call. It is difficult to say whether VHS is like HDDVD or Betamax. It depends on which piece of history you want to use to make your case.
Another thing I didn't mention earlier is the technical competance of both Betamax and VHS. In the early days, Sony's Betamax was bug free while VHS often suffered from the dreaded "My VCR ate my tape" claim. Then along came Macrovision to protect Hollywood from the dishonesty of their own customers. Macrovision didn't work and its effacacy was based on the brand machine you had. In some cases original tapes wouldn't play yet others, copies couild be made as if the copy protection was never present. On the other hand, Macrovision applied on the few titles of Betamax were never protected. The reason why is Macrovision was designed to disrupt the AGC circuits in the Video preamp. Surprise! Sony didn't use Video AGC. :) therefore Macrovision was totally ineffective on Betamax. People quickly learned that if they wanted to make copies, all they needed to do was buy their second VCR as a Betamax and voila! clean copy.
So, while the Betamax vs. VHS history is an interesting study, the points, pros and cons of the formats back then don't apply to the HD DVD and BluRay battle we have today.
My guess is that all the studios even Sony will support both. ( my reason is that eventually, even Sony bought a license from JVC to build and sell both Sony VHS tape as well as VHS VCR's.) They have a track record of NOT being so stubborn. So now we have all studios producing movies on both formats. Next, it will be features and the one with the best feature set will be ahead for awhile. Soon both will sport the same feature set and do them equally well. Finally we will have to look at player price. It both are equal, then the manufacturers will be looking at sales of players and disks until one decides to give up. Will it be Sony? or Toshiba? I have no idea. That is why, for the little money I have to spend, I went both and am very happy I did that. The loser will be those who decide to hold out until this war is won. That just doesn't apply to those who don't own either but also to those who are sitting around on one format thinking the other will die soon. Not going to happen. You are losing out now and have to spend too much time worrying over who will win. The fact is you are the loser. Get the other format and start enjoying the movie. Ahem... that was the whole idea now wasn't it? :D
 
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So, to summarize, if there is one lesson history has taught us, it would be "History doesn't teach any lessons", right... :)

I think you missed one factor many consider to be the key to Betamax failure: in the name of picture quality Sony refused to slow down the tape to allow longer recordings.

And Sony didn't own a studio at that time.
In fact, Sony was on the "freedom" side when the "fair use" ruling the Supreme Court issued was handed down in Universal vs. Betamax.

A lot has changed...

Diogen.
 
I bought my first vcr in 1981 and it cost $650.00 . It was a panasonic top loading model. It worked for years till the early 90s and till a lightening strike hit my apartment building and I had no surge protector and it fried my box. So I never tried beta max at all. I never even saw a tape by them at all to compare. VCR was heavily promoted back then in most electronic stores in my area . Vcr tapes were heavily promoted in adult movies back then too. I think that was what settled the whole format war back then: PORN . To bad we can't get this one settled as fast , but with high definition being so clear, we might not want to see adult porn actors that closely and clearly. So maybe price will be the settling factor in the hd dvd vs blue ray battle.
We still have an old JVC (I think) top loading version in the closet at our office, (right next to the TRS-80 ). When we put it back there it was still working as well as it did years ago
 
So, to summarize, if there is one lesson history has taught us, it would be "History doesn't teach any lessons", right... :)

I think you missed one factor many consider to be the key to Betamax failure: in the name of picture quality Sony refused to slow down the tape to allow longer recordings.

I doubt that was a factor at all since it is not true. Betamax came in three tape speeds, BetaI; BetaII; and BetaIII. BetaIII was the slowest. While I don't think Sony ever achieved the 8 hour playing time of thin tape and slow speed for 8 hour recordings, popular for many years. They did achieve 4.5 hours on an L750 at BIII. The popular speed was Beta II, and for editing master work we used BetaI. Also, later on Betamax came in an SHB format that required a special VCR to use. This produced a very high quality master. It was called BetamaxI SHB for Super High Band. I still own one of these VCRs and it still works! Another interesting factoid is that betamax tape stock and Betacam, the broadcast version used exactly the same tape stock with different factory labels. A few years later betacam switched to betacam SP which used metal tape. While the oxide tape was compatible to both consumer and broadcast versions, the recordings were not as betacam was in component, Y, R-Y, B-Y track matrix and betamax still used color under recording, similar to VHS and 3/4Umatic.

And Sony didn't own a studio at that time.
In fact, Sony was on the "freedom" side when the "fair use" ruling the Supreme Court issued was handed down in Universal vs. Betamax.


That is certainly true!

A lot has changed...

Diogen.
 
Discs can be rented at the Blockbuster and Netflix online stores. Of Blockbuster’s 5,000 physical stores, 250 offer both high-definition DVD formats, while 1,450 rent only Blu-ray; the rest offer none. The company emphasizes Blu-ray because 70 percent of its rentals are for that format, said Karen Raskopf, a Blockbuster spokeswoman.

I find this statement in the article rather silly. Karen claims 250 stores carry both formats but those that do offer about twice as many BluRay titles on the shelves as HD DVD. Any wonder why she sees 70% going out the door as BR with only 30 % being HD DVD? :) Of the 1450 stores that carry only BluRay, I bet 100% of the rentals are BluRay. duh!

Point is that Karen Raskopf is manipulating the rental distribution by not having an equal quantity of BR and HD DVD at all 1700 stores currently budgeted for HiDef media. In the case of a rental business like BlockBuster, the company dictates what is popular by what it carries. The company has no specific method to evaluate feedback from customers as to which they would like to see. If I were asked, I would suggest they carry an equal number of both formats.
 
I doubt that was a factor at all since it is not true.
Taken from here
Videotape format war - Wikipedia, the free encyclopedia
The first battleground was recording time. The original Betamax video recorder for the NTSC television system could record for one hour, identical to the previous Umatic format, which had been sufficient for use in television studios. JVC's VHS could manage two hours, because of larger cassettes and slower tape speed, however the entrance of RCA into the market sparked a mini-war to see who could achieve the longest recording time.

Diogen.
 
Great link Diogen. That was always my understanding too. People wanted to record TV shows and VHS gave them two full hours versus only one with Beta. Eventually it was matched.

Initially, I remember seeing both VHS and Beta tapes for rent. As VHS started dominating, only VHS was offered. I have a friend who still kept his Beta for many years and he could still buy Beta movies well into the 90's.
 
diogen- The trouble with extracting information from wikipedia is that you have gone away thinking something completely wrong and are trying to relate it to something entirely different. What the author of that entry is saying is that the original betamax recorder did what the 3/4Umatic system did. What he failed to state is that Betamax recorder that did the one speed of B1, was an industrial edit recorder*. I recall the model was SLO-383. It had nothing to do with a consumer betamax VCR. Later on Sony began to sell consumer VCR's in Betamax half inch tape format but these were indeed 2 speed machines, B2 and B3 speeds. The rest of the info is correct. Later on from that Sony offered the B1 speed in a consumer VCR making the number of speeds 3. To state that a main problem Sony had in the market with Bertamax was it only offered single speed is just untrue and I don't believe the Wiki info made that claim. However, the wiki poster did make misleading history in that he mixed up industrial betamax with consumer VCR's If I didn't know better I would have made the same incorrect conclusion as you did. It is correct that Betamax slow speed on the longest, thinnest tape still did not match VHS's longest record time. While this may have been an important issue to some, considering the PQ at these long times, it never was a deciding factor since most people would record at SP speed or a T-120 was 2 hours long. On betamax, most used B2 speed.

My main point was, that this format war between Sony and JVC of the 80's does not offer patterns to guage the format war winner between Toshiba and Sony today. Where the old tape formats had clear advantages over the opponent, today, both Sony and Toshiba, are a pretty close match. And, the longer we have this war the closer the two become.

* I might add that there were other industrial players and non-edit recorders too but all were designed to work in the industrial environment with one speed. The consumer machines were 2 slower speeds The L500 tape in Beta 1 was a 60 minute record time but in B2 was 2 hours and beta 3 was 3 hours. They also offered the L750 tape which gave run times 50% longer. When we used L750 on the SLO383, we achieved a 90 minute master for our programs. In later years I sold my SLO383 and got the SLHF1000 which was a 3 speed machine and a built in edit controller but designed as a consumer VCR. It was, I believe the top of the line for betamax VCR's. I still have the SLHF1000 today and use it to play older B1 SHB edit masters.
 
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Great link Diogen. That was always my understanding too. People wanted to record TV shows and VHS gave them two full hours versus only one with Beta. Eventually it was matched.

Initially, I remember seeing both VHS and Beta tapes for rent. As VHS started dominating, only VHS was offered. I have a friend who still kept his Beta for many years and he could still buy Beta movies well into the 90's.

Eventually Betamax could record five hours and VHS six---or 8 with more expensive and thinner tape. I think that the longer recording time on VHS wasa factor for many. It si not certain that it was a big one.
 
To state that a main problem Sony had in the market with Bertamax was it only offered single speed is just untrue and I don't believe the Wiki info made that claim.
I got the impression reading the wiki that Beta was a step behind in offering longer recordings. And I normally trust wiki on matters of fact.
Having said that, I'll admit to not being around on this continent around the time that war played out and could be wrong.

Diogen.
 
Part of the beta time problem is that the Sony President at the time INSISTED that the Beta video tapes be the size of standard a paperback book for the sake of portability. The tape could fit in most people's jacket pocket that way. This limited the amount of tape in the cartridge.

VHS "Video Home System" was really a "customer-ized" revision of the true name:
Vertical Helical Scan :)

See ya
Tony
 
I got the impression reading the wiki that Beta was a step behind in offering longer recordings. And I normally trust wiki on matters of fact.
Having said that, I'll admit to not being around on this continent around the time that war played out and could be wrong.

Diogen.

It was. This beta - vhs war is studied in college economics. That's what they discuss too. Beta was always behind the recording times of VHS.

For more information, here are a couple of links...

link 1
link 2
link 3
Pages from an Economics book on the subject
 
“When high-definition DVD reaches its tipping point, studios will have to release their movies in both HD DVD and Blu-ray,” Mr. Adams said. “No studio will be able to afford not to.”


True that. Seems to me that the only real winner will be the HDMI cable companies since so many people will own both formats connected to their HD TV's.


(Hey, this is my 100th post. Woohoo)
 
I got the impression reading the wiki that Beta was a step behind in offering longer recordings. And I normally trust wiki on matters of fact.
Having said that, I'll admit to not being around on this continent around the time that war played out and could be wrong.

Diogen.

Yes, betamax never did offer the play time that VHS did, but then VHS PQ at those increased play times was significantly worse than beta's slowest speed too. If you took a T-120 vs a B2 L500, both recording for 2 hours, the Beta had a significantly better PQ, as well as ability to achieve stable still pause. VHS never did achieve stable pausing until after the introduction of the frame store on a chip technology. Beta tape wrap design permitted both heads scanning the tape at the same time while VHS could only achieve one at a time. Thus beta was able to reconstruct a still image via mechanical and VHS would lose 50% of the scan lines unless the tape was moving. Anyway, I'm sure some people made a big deal about the original betamax editors not able to do more than 90 minutes, and false information propagated among those who didn't understand the technology and knew nothing more than what they heard from JVC motivated reports. The truth is both achieved 2 hour times of adequate quality but VHS was able to push the envelope to 6 and even 8 hours with extremely poor PQ. At the end of the era, betamax lost due to lack of movie studio support, not due to inability to achieve a match of 6hr recording time.
In addition, the beta story doesn't end there. While beta tape format lost on the consumer level it went on to become the defacto standard in broadcast and in the mid 90's with industrial TV production using an upgraded tape called betaSP. Guess what? The longest record time on betacam SP is 90 minutes. :) Today, 2008, while many TV studios have switched to digital tape formats of various flavors, the one constant nearly every production house, TV station, cable op, and studio has is betacam SP. Unless doing HiDef, Beta SP is the safe bet. How long will this last? Not much longer because 2 years ago, Sony decided to kill the betacam SP market by ending it's manufacture and licensing of the format. They want everyone to move to HDCAM or Varicam or XDcam. sigh... Meanwhile, I output 50 or more beta SP air masters a month because everyone still has that capability. Sony has the ability to dictate what will become standard. This is why they are likely to become the winner. The only issue that really killed their consumer acceptance of betamax, was studio support. That won't happen again with bluRay.
 
Part of the beta time problem is that the Sony President at the time INSISTED that the Beta video tapes be the size of standard a paperback book for the sake of portability. The tape could fit in most people's jacket pocket that way. This limited the amount of tape in the cartridge.

VHS "Video Home System" was really a "customer-ized" revision of the true name:
Vertical Helical Scan :)

See ya
Tony

Haven't heard that one in many years. It was often joked about since it was floated around by the PHD's at the Best Buy stores of the 80's. :D

I believe the evidence lies in the legal name which is a registered trademark of JVC- VHS Video Home System. "Vertical Helical Scan" is not just incorrect technically as the tracks are diagonal on the tape, the same diagonal helical scanning is used on both beta and VHS as well as the new digital tape formats such as DVCAM, miniDV, DVC, digi beta, D1 D2 D5, etc..
 

The Reaping..biggest BD embarrassment yet!

A Retail Perspective on the Format War

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