Re: HD Disc Format War Heats Up For The Fall
My company has been watching this ridiculous hi-rez format war from a distance and here is our take on it at this time. Regardless of whether the players drop below the magic $199 price point, and we could certainly see that happen in the next 12 months, consumers are not going to buy either format in serious numbers precisely because there is a format war. It doesn't matter if a combo player becomes available for $199, either. Most older consumers still remember VHS vs. Beta, and the younger ones hear about it from the press because it's an inescapable fact that gets brought up in EVERY story. It doesn't matter whether people can or can't see a difference with high-def discs. We believe they can, or they wouldn't be buying HDTV sets in the first place.
So, the big question is: what will tip the scale to favor one format? Here, we need to look at how consumers behave and NOT base it on which technology is better. The biggest problem facing consumers is education at the retail level. It is a sad fact that a really high percentage of people who buy HDTVs have no clue whether they have HDTV service at home. DirecTV has told us that this is a constant problem: "Yes, sir, you may have just bought an HD plasma, but you are only paying for standard def service, so, NO, you aren't watching HD right now. If you pay more for the HD service you can . . . . . . "
Tivo ran into a similar problem during its first few years on the market. People who owned Tivo loved it (including us), but Best Buy had a hell of a time selling it because it wasn't an easy thing to explain to consumers. This is a very significant point to consider: the key to getting consumers to adopt a new technology is to make it easy to understand. When you look at the format war in this light, it becomes clear which version has the best chance to succeed.
Let's use some ridiculously simple logic: I own an HDTV. It can play back HD programs. I own a DVD player. But it's not HD. So, to get HD on my DVD, which format will get me there? Hmmm. Is it HD-DVD? That must be a High-Def DVD. What the hell is "Blu-Ray"???
This may seem almost painfully dumb for people who frequent A/V Revolution, but just remember that people like us don't determine who wins format wars. If we did, then the iPod and it's brutally-compressed fidelity would never have completely shifted the paradigm in the audio market. Winning a format war can come down to something as simple and stupid as which name is easier to understand and this is where HD-DVD has a massive advantage.
The other X factor is Microsoft. Any perceived advantage Sony has right now with Playstation/Blu-Ray drives will be instantly neutralized the minute Microsoft starts building HD-DVD drives into the X-Box. And you can bet they will start doing that if it appears the Blu-Ray side starts gaining too much of a market edge. The fact that Microsoft hasn't done that yet is proof that the number of high-def disc players being sold right now is still a joke compared to plain old run-of-the-mill DVD.
Of course, it is also possible that this format war could go on for several years, trailing DVD sales by a wide margin. If so, then BOTH formats could bite the dust. Why? It's called "Fiber to the Home." When Verizon starts destroying all of the lame cable companies because they can't scale their bandwidth over coax fast enough to match fiber optic cable, you're going to see an explosion in A/V services piped to your home. And the same goes for DirecTV, as much as I love that service, because satellites cost a fortune to build and deploy and you can't scale the bandwidth delivery with anywhere near the same cost efficiency as you can over ground-based fiber connections. The real future is fiber-based delivery of all media ever recorded, streamed directly to you whenever you want so you don't need a massive hard disk to store your movies and music. If Verizon can move fast enough into the major metro markets, disc-based high-def formats like HD-DVD and Blu-Ray won't matter anymore and they could wind up just as irrelevant as DVD-Audio and SACD.
In the meantime, my company wants to build the winning high-def disc drive into our Digital Wireless A/V Controller, but we won't move an inch unless it looks like someone will finally win this damn format war. So, until then, we'll just give you lots of HDMI inputs and let the user decide which disc format they want to use. And I'm betting it will be DVD (unfortunately) for several more years to come.