Wednesday, February 27, 2008

Sony Wins Protracted Fight Over High-Def DVD's

Back in the 1980's Sony and JVC fought a consumer war over hope video tape standards. Sony, which had tried to develop a partnership with Matsushita for home video tape systems in the mid-1970's, chose instead to develop Betamax, a smaller tape format.

JVC was the primary developer and advocate of VHS, and even though most video experts thought Betamax was the better format, JVC eventually won out over Sony, costing Sony billions of dollars in potential revenues and marketing costs.

A similar war has been engaged, albeit on a smaller scale over the past two years in the area of high-definition DVD.

In this case Sony's rival has been Toshiba, which advocated for the HD-DVD format over Sony's Blu-Ray. But unlike the format wars of thirty years ago, in this instance, Sony has emerged as the victor.

Toshiba recently announced that it will no longer produce and market HD-DVD after March, 2008. Already retailers with HD player stocks are beginning to liquidate their remaining inventories.

Although prices may be attractive, there appears to be little reason to pick up one of these players, as most movie studios are expected to stop releasing HD-DVD titles, and all are now in support of Blu-Ray.

Consumers, for the most part, should find the end of this particular format war to be helpful in making a decision to go to a true high-definition format.

Another issue that's helpful is pricing of DVD players on the retail level. In the 1980's it wasn't uncommon for VCR's to cost $500 or more, with high-end models exceeding $1000.

Sony's Blu-Ray disc players, while more expensive than comparable HD-DVD units, are now under $500, and prices can be expected to continue to fall. However, it's likely to take years before Blu-Ray falls into the sub-$100 price level consumers have become accustomed to for standard DVD players.

Sony is usually known for being at the upper end of the retail price scale for most lines of consumer electronics. How widely Blu-Ray will be licensed to other companies, and at what cost, is still an open question.

Blu-Ray discs can also be expected to become more widely available in video rental stores as retailers will no longer have to dedicate shelf space for two competing formats.

With the looming transition to full digital broadcast TV in the U.S. now less than a year away, the ending of High-Def DVD format wars will likely produce a further uptick in the sale of larger digital televisions which have the capability of showing off the advantages of Blu-Ray.

Buyers of Sony's PS3 game systems have Blu-Ray built in, and it can also be expected to help sales in that area. Microsoft, which has reportedly sold hundreds of thousands of HD-DVD add-on players to its Xbox 360 game consoles, has announced it is also pulling the plug on HD-DVD.

Doubt also exists, however, as to how long it will take for consumers to fully embrace Blu-Ray. The reality is that for most homes the standard DVD provides excellent quality, and upconverting DVD players (which now cost as little as $50) provide even better picture quality on large screens.

While Blu-Ray is better still, many will find it hard to swallow Blu-Ray at a time when consumers are moving in droves to purchase pricey digital televisions in an economy otherwise less than stellar.

Tom Meek is a computer and media consultant working with businesses and individuals on high-tech needs. Another Day In Cyberville is published weekly in print and online via The Gainesville Voice, a weekly publication of The New York Times Regional Newspaper Group. You can reach Tom Meek at

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