Blu-ray vs HD DVD: New Article

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i think its wise to be privy to whats been mass communicated in internet newsland...so here's the article:
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Video Wars II

Aug 24th 2007
From Economist.com
Can Toshiba’s David topple Sony’s Goliath?

A COUPLE of months ago, the battle over which of the two competing high-definition formats would replace the DVD seemed to be drawing to a close. Blockbuster, the world’s largest video-rental chain, announced that, in future, it would stock only Blu-ray discs in its 1,450 local branches. After all, two out of three customers had been renting Blu-ray titles. Henceforth, HD DVD versions would be available only at Blockbuster’s 250 main stores and through its online service.

Many considered the announcement decisive. In the 1980s, when the video war raged over two rival video-cassette standards, the decision by America’s video-rental chains to stock only one format tipped the balance in favour of Matsushita’s cheaper and longer-recording VHS standard. Within a few years, Sony’s Betamax had disappeared from the shelves.

Back in June, Tech.view argued that because both Blu-ray and HD DVD were for play-back only (recordable versions are still not ready for prime time), they were really only interim solutions. And now that Blu-ray had caught up technically—at least on discs from studios that had upgraded to the same compression algorithm HD DVD used—there was not much difference between them.

The best advice was to pick the one that offered the movies you wanted. Anyway, both would soon be overtaken by slicker means of distributing high-definition video; namely, the warp-speed optical-fibre connections that the phone companies are now laying to people’s front doors.

Then came last Monday’s announcement by two of Hollywood’s more thoughtful studios, DreamWorks Animation and Paramount Pictures. Both have decided to ditch the Blu-ray standard from the Sony camp and release all their future high-definition titles solely in the HD DVD format from the Toshiba alliance. Until then, Universal Studios had been the only one releasing movies in HD DVD exclusively.

The defection certainly levels the playing field in terms of titles released exclusively in one format or the other. In doing so, however, the confusion that’s prevailed in the marketplace—with mainstream customers staying on the sidelines until a winner emerges, or both get overtaken by events—is now set to continue for several more years.

The industry has been abuzz all week over the back-door incentives used to induce the studios in question to abandon Blu-ray. Paramount was rumoured to have received $50m and DreamWorks $100m for making the switch. Other incentives were said to have included exclusive promotion and marketing support for the studios’ new releases.

But that’s business as usual in Tinseltown. And Sony has been a master at pulling off such deals. If both sides offer similar bribes, what was the clincher that made DreamWorks and Paramount favour HD DVD?

For a start, HD DVD is a cheaper system all around. Unlike Blu-ray, which has a much shallower (and therefore a more delicate) data layer, an HD DVD has its digital information etched deeper beneath the surface just like a conventional DVD—and can therefore be stamped out on much the same sort of equipment as a DVD. That translates into a larger profit margin for the studios.

Meanwhile, because of the robustness of the disc, HD DVD players have proved to be much cheaper to build. Models now start at $299, and are expected to fall to $199 by the coming holiday season. By contrast, basic Blu-ray players start at $449.

As far as stand-alone players are concerned, the price advantage has allowed Toshiba to outsell the Sony camp by a wide margin. More than 400,000 American households are expected to have HD DVD players by the end of the year, compared with less than 300,000 with Blu-ray players.

Why, then, have Blu-ray discs lately been outselling HD DVD versions by two to one? Because Sony cannily included a Blu-ray player in its latest video-game console, PlayStation 3. And while PS3 has not met expectations of selling 6m consoles in America, some 1.4m have nevertheless been snapped up since their launch last November. Market researchers reckon that most—90% by some reckoning—of Blu-ray discs are played on PS3 consoles. But Hollywood’s studios now realise they can’t pin the future of their precious video sales (today one of their main sources of revenue) on a game console that has failed to ignite widespread interest outside a dedicated circle of hard-core gamers.

That’s not all. Engineers who’ve worked with both formats say Blu-ray is a pig to program. While extremely flexible, its programming language, BD-Java, requires lots of low-level code for even the simplest of instructions. The highly skilled programmers needed to do the job don’t exactly grow on trees. And because of the program’s complexity, even the best produce their share of bug-ridden software.

By comparison, writing software for HD DVD using Microsoft’s HDi interactive technology is a doddle—with one simple command doing the task of scores of lines of BD-Java. More importantly, HDi is the key to HD DVD’s better navigation around menus, and its instinctive ability to interact with the outside world.

Thanks to the internet connection built into all HD DVD players, Toshiba machines allow users to do all sorts of nifty things—like re-edit films, participate in online polls and download trailers. Increasingly, it’s beginning to look as though, after the initial attraction of high-definition’s much sharper picture, interactivity is going to be the deciding factor that determines the outcome of the current format war.

DreamWorks, Paramount and Universal are betting that HD DVD’s powerful tools for interactivity will let them make a tonne of money out of selling all manner of online services to customers who buy their discs. That’s why, ultimately, Toshiba’s David could yet topple Sony’s Goliath in the current video wars.