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A Solution to the Format War

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Old 02-20-2006, 09:36 AM   #1
What's all this, then?...
 
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Default A Solution to the Format War

Here's a solution that's good for everybody, even Sony and Toshiba if they can put their corporate egos behind them.

The long-term success of either HD-DVD or Blu-Ray is utterly dependent on mass consumer acceptance. Blu-Ray's advantage is not that it has more storage capacity or features or would be better for computers, rather that it has more studio support, which is what will be important to consumers (ultimately it was lack of Beta format content at retail/rental that killed Beta). The disadvantage of Blu-Ray is that "Blu-Ray" doesn't mean anything to consumers (personally, I feel it sounds kind of corny and retro), which means spending lots of marketing dollars to educate the public, at which point they will say "Oh, it's an HD DVD. Why didn't you just call it HD-DVD?" It most certainly won't be perceived as something new, worthy of a new name, but rather as an incremental improvement to DVD (and then, only if you have an HD display and use HD content).

HD-DVD's advantage is obvious. Everyone who ever bought a DVD will immediately understand what it is from their perspective--a better DVD. The Disadvantage of HD-DVD is it doesn't have as much studio support and history has shown that Sony will not give up on a format easily (they rode Beta down to the bitter end where they were the only company producing Beta players for at least a year and they are still trying to sell MD audio and Micro-MV video).

So here's the solution:

Toshiba, the DVD Forum and the HD-DVD Consortium give up on HD-DVD technology and adopt Blu-Ray technology, while Sony and the Blu-Ray Consortium license the name "HD-DVD" from the DVD Forum and drop "Blu-Ray"--other than possibly as an adjunct, like "HD-DVD (big print) with Blu-Ray technology (small print)" or simply slap a small Blu-Ray logo on the front panel somewhere to tie it in with Blu-Ray storage for computers).

Everybody wins:

Consumers are happy, they get one, good format, without a format war.

All of the studios are happy, they get to produce only one format of content (and don't think for a second, despite studios picking sides to start with in an effort to back the right horse, that every studio wouldn't switch to the dominant format. Profit is the only agenda).

All of the manufacturers are happy (except Toshiba and Sony), they get to produce only one type of player (and don't think for a second, despite manufacturers picking sides to start with in an effort to back the right horse, that every manufacturer wouldn't switch to the dominant format. Profit is the only agenda).

That leaves Toshiba and Sony. If they can get over it, it's still better for both of them as they can sit back making money selling product instead of spending money fighting a marketing war and damaging the market for both formats. Sony will be upset over not dominating the "name" licensing, but they can probably still license "Blu-Ray" to computer companies as an existing computer storage medium. Toshiba will be upset that their technology wasn't the choice and would probably have to license the Blu-Ray technology. I'm sure the cross-licensing could be worked out so that the entire industry (including Sony and Toshiba) benefits rather than just just Sony or Toshiba...
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Old 02-20-2006, 10:53 AM   #2
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I like your idea and would love to see both companies put their silly issues aside and create a single format. Does anyone know the specific / major reasons given (not counting their "pride" as stated) why the two could not settle on a format or co-develop a technology?

Funny thing, I was thinking a couple days ago how HD-DVD's name is so much more market friendly. Neither format brings much more than space over DVD. Truth be told, the advantages from DVD to HD-DVD or Blu-ray are nothing compared to the VHS to DVD jump (though if the "broadband enabled interactive" features take off and are simplified, it could be big). So, it would be much more beneficial if Toshiba and Sony could unite to provide a single format. It would greatly help speed along the mainstream adoption rate.

Originally, I did not plan to pick up one of these players till there was a winner, then my tech blood took over and I wanted one at launch. But after reading some players lacking key features and fellow members reminding of issues with version 1.0 hardware, I believe I might hold off for awhile (till PS3 hits).
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Old 02-20-2006, 09:44 PM   #3
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Corporate ego *can* be a factor, especially when the financial dust has settled (hence Sony's dogged effort to sell Beta VCR's long after everyone else dropped out and it was obvious there was no chance of increasing or even maintaining market share), but the issue here is licensing.

Take HD DVD for example: If you wanted to produce an HD DVD player or recorder, produce an HD DVD drive or add one to a computer product, sell any HD DVD disc (blank, or *with* content), use any HD DVD technology or put the HD DVD logo on any product, you have to pay a licensing fee to the HD DVD consortium/DVD forum as an upfront fee, an annual license and/or a royalty on each individual product you sell (the same would be true for Blu-Ray, only you'd pay the Blu-Ray Disk Association). That's a lot of money, particularly considering it's almost pure profit as there is no work involved other than lawyers negotiating contracts. Yes, the technology costs money to develop, but these companies are in the business of developing technology. If they weren't developing Hi-Def discs, then they'd be spending that money and time developing something else, so the the true cost is opportunity cost. The development costs can also be amortized in the wholesale cost of products.

While Toshiba is usually painted as the bad guy in this, in reality Sony is to blame. As I understand it, despite being a member of the DVD Forum (!), rather than submit Blu-Ray to the DVD Forum for approval and adoption as a Hi-Def disc format, they pursued it on their own, forming the BDA with other manufacturers. While the primary goal of the DVD Forum is not to protect consumers, it does serve as a technology coordinator in order to avoid things like incompatibilities and format wars, which are not only bad for the industry, but also happen to be bad for consumers. If Sony had kept the format to themselves (like Micro-MV), it's likely nobody would have cared, but they formed the BDA to maximize the opportunity of their own individual success and take of the licensing money. Obviously the DVD Forum wasn't going to just sit back and let Sony take control of the market they created, so they pursued their own technology to protect their investment in the DVD market and that's where we are today. I can't imagine the DVD forum would respond otherwise and Toshiba provided the technical muscle.

What must have truly alarmed them was that Sony controls a lot of the content and could choose to support Sony formats to the exclusion of others. That might be bad for Sony's disc sales, but it is Samurai Business 101--accepting a short term loss for long term dominance in a market. Given major control of content, Sony also added a touch of the Microsoft/Borg attitude: "Resistance is futile because we are the 800 pound gorilla".

Ultimately the HD DVD consortium has the name and Sony has the technology edge, but this is all about greed and everybody could lose...

Last edited by BobY; 02-20-2006 at 09:51 PM.
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Old 02-20-2006, 10:18 PM   #4
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SONY is about $12 BILLION in debt which is probably why they did this. That's also why movies coming out from SONY studios will use MPEG2. Unfortunately for them if it backfires and Blu-ray doesn't catch on, they'll bleed even more money.
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Old 02-20-2006, 11:30 PM   #5
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it is not about corporate ego, it is mostly about $, you could not imagine how much is stake here, who ever wins the format has to charge for the patent to all companies for so many years to come, the chosen format will here for a long time so who ever gets it get it big. Technicaly i like BD but HD DVD make more common sense commercially, My gut feeling is HD DVD will win as it was mentioned above SONY wanted do some other stuff with audio format but failed miserably, BD player will be expensive as compare to HD DVD, For computer usesers HD DVD also make sense, Currently we are maxing out hard disk space on our PCs around 300 GB, a capacity of 25 gb is more than enough on HD DVD for movies no one cares about the extra spce BD has. I have so many DVDs with extra features on them never tried to watch those extras. HD DVD players are at right price point and price will go down very quickly because the studio wants to sell their HD dvds also, If price remains higher for player people will not buy movies, just like game consoles has to be cheaper to sell games.
Customers will decide which will win, since HD DVD coming out first it has good chance to succeed, I think SONY has real disadvantage. PS3 is only X-factor in this war, if people choose to buy PS3 instead of Xbox 360 SONY will win the war with BD.
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Old 02-20-2006, 11:35 PM   #6
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When this format war is all over, it will be fun to come back and read all these posts with all the various predictions and proposed solutions.
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Old 02-21-2006, 06:47 AM   #7
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Also awhile ago some people here were cheerleading the UMD format because SONY managed to sell a few one hit wonders, but now UMD sales are tanking and out of desperation they're thinking about bundling UMDs with some DVDs. Those people are awefully quite now especially since they used PSP as an example of how a console can launch a new movie format and predicted PS3 will do the same. Well I guess that means PS3 won't even be a factor in Blu-ray adoption. So much for that theory.

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Old 02-21-2006, 09:14 AM   #8
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My prediction is that HD-DVD and Blu-Ray will have the same fate as DVD-Audio and SACD. Neither format will “Win”. Both will coexist and no one will benefit. The average Joe consumer doesn’t care about the high quality audio formats and won’t care enough about the HD DVD formats either.
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Old 02-21-2006, 10:09 AM   #9
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Quote:
Originally Posted by holtzd
My prediction is that HD-DVD and Blu-Ray will have the same fate as DVD-Audio and SACD. Neither format will “Win”. Both will coexist and no one will benefit. The average Joe consumer doesn’t care about the high quality audio formats and won’t care enough about the HD DVD formats either.
Lately, I have been wondering just how much mainstream consumers will want either format.

Neither HD-DVD or Blu-ray offer a major leap from DVD. Which is why it would be ideal if there was a unified format or clear winner early on. The jump from VHS to DVD provided much better picture that virtually everyone could benefit from, menus and interactive features, extra content, and "instant" access to options or scenes.

The upcoming HD formats biggest focus is on being able to provide HD visuals, but less than 20% of the homes in this country will be able to benefit from the HD video.
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Old 02-21-2006, 11:42 AM   #10
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I think long-term, some form of Hi-Def "media" will take over just because everything is going HD. Eventually there will only be HD broadcasts and you will only be able to purchase HD displays.

It may turn out that neither HD DVD or Blu-Ray will be that format, but that both of them will slowly slog it out until something totally new and much better than either of them comes along...

There are other factors, though. If manufacturers drive the player cost down to the point where there is no point producing a non-HD player and if discs can carry both HD and SD content so that only one type of disc needs to be stocked at retail/rental, then the changeover to HD will happen automatically whether the consumer is aware of it or not.

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Old 02-21-2006, 01:30 PM   #11
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Quote:
Originally Posted by BobY
There are other factors, though. If manufacturers drive the player cost down to the point where there is no point producing a non-HD player and if discs can carry both HD and SD content so that only one type of disc needs to be stocked at retail/rental, then the changeover to HD will happen automatically whether the consumer is aware of it or not.
Good point.

If either camp is able to release players within th next year or so, around the $200 to $300 mark, they could just eventually replace standard DVD players (similar to progressive ones). Since the players are backward compatible, people without HD wouldn't even notice the change and benefit once they did upgrade. Seeing as the cheap HD-DVD player retails for $500, a $200-$300 tag shouldn't be too far off.
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Old 02-21-2006, 02:47 PM   #12
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Is Sony being described accurately in this thread? I was under the impression that they did try to get the DVD Consortium to back BR, and DVD refused. Since Sony put a lot of money into BR, and believed in the technology, I don't see anything evil about them wanting to release a competing product.
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Old 02-21-2006, 04:30 PM   #13
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I only know what I've read and I've seen in a number of independent places that Sony didn't submit Blu-Ray to the DVD Forum video group, but rather to a sub-group strictly for computer use.

There are quite a few members of the DVD Forum who are supporting Blu-Ray (Sony being one of them) and Sony is entitled to pursue their own formats--they've always done it (and almost always failed: Elcaset, Beta, MD, Micro-MV, UMD...), but end-running the DVD Forum to control the licensing profits seem a bit underhanded to me. Obviously this was going to lead to a format war, something that companies joined the DVD forum to avoid...
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Old 02-21-2006, 06:58 PM   #14
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I don't know that what you say is true. I know that Sony did have some discussions with Toshiba about merging the formats about 6 months to a year ago.

"but end-running the DVD Forum to control the licensing profits seem a bit underhanded to me"
Sony develops the technology - why shouldn't they control the licensing profits?
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Old 02-21-2006, 07:44 PM   #15
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Hmmm, I have seen a few polls on the format names....and Blu Ray has dominated in them as far as which is the better name for a hi res format.
hd dvd is confusing as the average Joe already has an up scaling dvd player that plays 1080I and says hd dvd on it..... and will figure that an hd dvd player is the same except more expensive.

Blu Ray ...says new format and not a continuation of an old one.
This is going to be a huge part of the entire Blue Ray advertising campaign as a matter of fact....and like I said, the majority of pollsters prefer the name Blu Ray.

There should have been one format, and I beleive there would have been a compromise by one or both of the camps if not for Microsofts influence on hd dvd.

As far as who should do what at this point, all signs point to Blu Ray as the 800 Gorrilla, and whether you like them or not as a company means nothing.

Content is King, and why we buy into formats, and we know who has more than 90% studio support, and who has less than 40%......its simple math.

Nobody can say that any of the first players from either camp are going to decide anything though, as the only way the masses will support either format is via PS3....and I think everyone following these formats knows this is the real key.....other than studio support and specs for early adopters opting for Blu Ray of course.
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