The high-def holy war

It's been a busy week for the companies behind the competing Blu-Ray and HD-DVD formats, and their various supporters. The business as usual of the past few months was interrupted on Monday morning when Paramount and DreamWorks Animation announced they are going to be exclusively supporting HD-DVD only for their high-definition releases. Then comes the news (Wall Street Journal / LA Weekly) that the HD-DVD group is paying Paramount and DreamWorks $50M and $100M respectively in promotional considerations and incentives for their decision to drop support for Blu-Ray. This leaves Sony/MGM, Disney, 20th Century Fox, and Warner Brothers as the backers of releases on Blu-Ray while HD-DVD will now exclusively add Paramount/DreamWorks to the lonely Universal Studios.

The early adopting consumers are all in a commenting tizzy on the blogs over what this will eventually mean for their beloved formats. Does this mean that HD-DVD has a chance after all? Will another studio like Warner Brothers be tempted by cash to drop their support of Blu-Ray?

Some people like to further speculate that if there isn't a clear "winner" between the two formats soon that the current crop of high-definition discs may go the way of SACD and DVDA. What?!? You've never heard of SACD or DVDA? That's because they died in the womb of their great "idea". These were supposed to be "super" high-fidelity audio discs which would give music lovers unparalleled sound quality. The problem was, very few people could actually hear the ultra-high frequencies and sound differences between the high-definition audio discs and normal audio CDs. Worse yet, most people were willing to have less quality for more convenience and less money (ie. free) in the form of downloadable MP3s. Not enough people cared about the quality to make a compelling reason to pay for all new CD players and buy new versions of the CDs they already owned.

There are many other differences in this format war than any previous ones of the past. SACD/DVDA never achieved any marked level of market penetration nor did they get enough labels on the bandwagon to release CDs to drive those sales. Not the case with HD-DVD or Blu-Ray. Sony sold a mere 18 million Betamax units globally in its entire 27-year span of existence starting in 1975 and ending in 2002 (US availability ceased in 1998). There are already over 4.5 million Blu-Ray equipped Playstation 3s sold and in consumer's homes.

The true "battle" for which format has dominance will start to take place this holiday season when Toshiba has their sub-$300 standalone HD-DVD player available. Sony is rumored to have a similarly priced Blu-Ray player in the works for the holidays as well. Past CE hits have told us that the sweet spot for most American consumers is in the under $200 price range. This level of pricing won't be achieved by either format until at least the 2008 holiday season.

Until then, I'll still be a content producer trying to find affordable ways to actually produce high-definition discs. Right now, that doesn't exist for either format.