Monday, January 14, 2008

Is an End to the High-Def DVD Format War in Sight?

Arguably one of the biggest announcements made at CES this year was Time-Warner and New Line Cinema's decision to back the Blu-ray high-definition DVD format exclusively. Does this spell an end to the high-def DVD format war? On the one hand, the HD DVD format has movie studio support only from Paramount and Universal, and many predict that it's only a matter of time before they jump ship as well. But on the other hand, HD DVD still has a few tricks up its sleeve.

For one, there's price. Historically, HD DVD players have been cheaper than Blu-ray. In fact, a press release I received this morning indicated that Toshiba dropped the price of its current models in the U.S. as of yesterday to US$149.99 for the HD-A3, US$199.99 for the 1080p HD-A30; and US$299.99 for the HD-A35.

Second is unique features, like twin discs that can be played back on HD DVD players and "regular" DVD players; Web-enabled network capabilities; and free movies offered with every HD DVD player purchase. Then, of course, there are other factors that come into play, like the popularity of Toshiba notebook PCs, some of which now incorporate HD DVD drives; and the growing Xbox 360 market, which offers a small HD DVD player as an optional accessory.

With that said, how many people will appreciate these features if they can't buy or watch the movies they want? When it comes down to it, content is the end goal of the game.

Nevertheless, even if the Blu-ray format emerges victorious, it still has another fight to win: the battle against the standard DVD format. The market might become convinced that Blu-ray is the way to go, but consumers would still need to be convinced that high-def in itself is worth the upgrade. This has been somewhat of a battle in the cable/satellite TV space, with so many consumers owning HDTVs, but not HDTV set-top boxes nor programming subscriptions. It's not a far cry to assume that a similar battle will continue with DVDs.

Whichever way the cookie crumbles, one thing is for sure: once one format remains, regardless of whether it's Blu-ray, HD DVD, or some sort of unified project, marketing will shift more toward getting consumers to upgrade period, rather than getting them to upgrade to one format over another. And really, shouldn't this have been the focus all along?

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