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Is there more to the end of the format war than meets the eye? In two words: of course.

Anyone who thinks that these things are always decided with over-the-counter capitalism possesses a touch more faith in the system than should perhaps be reasonably expected. These sorts of things are generally decided behind closed doors, with information that only begins to leak out once everything has been neatly wrapped up. Now that Toshiba has officially pulled support for the format for HD DVD, the conspiracy theories can begin.

One of the most notable aspects of this latest format war is the relatively short time in which the whole thing was decided. Both formats were introduced to the public in 2005, and by the second month of 2008, a victor had already been crowned. Compare this to the decade or so during which the VHS did battle with Betamax.

It should be pointed out, of course, that Betamax was a Sony creation. So was the MiniDisc, Memory Stick, UMD, ATRAC3--the company hasn't had the greatest track record when it comes to proprietary formats. That long history, coupled with the recent under performing of products like the Playstation 3, had perhaps put Sony in something of a do-or-die position when it came to hocking their next generation format.



When mapping the trajectory of the two formats, it's Warner's pull out at the beginning of the year that is largely considered to be the straw that broke HD-DVD's back. The studio announced that it would be going strictly Blu-Ray just ahead of CES, leaving Toshiba with a bit of egg on its face just ahead of its scheduled press conferences, which were ultimately cancelled, later that week.

Rumor has it, however, that Sony may have greased the wheels a bit with a $400 million payoff to the movie studio, helping Sony regain a bit of the glory that was lost decades ago when BetaMax was ultimately relegated to fodder for 80s inside jokes.

We spoke with a Warner spokesman on the subject of the rumor, who answered simply, and rather bluntly, "The world wide DVD business is about $42 billion--we have the largest market share--the idea that we would make a decision about a business that is so enormously important to us based on a one time pay out is just ludicrous."

Ultimately, Warner's pullout was the first in the proverbial hi-def domino effect, spurring similar decisions by Netflix, BestBuy, Wal-Mart, and, ultimately, Toshiba.

Was Toshiba's abandonment of the format simply a case of it having "no chance to win," as the company's president, Atsutoshi Nishida suggested, or was it perhaps another case of a backroom favor? Slashdot points out that Sony announced an agreement to sell Toshiba a chip facility for $835 million, just after Toshiba announced their all-important decision to abandon their beloved format.

There's no smoking gun here, sure, and HD DVD was most certainly on the way out before Toshiba officially pulled the plug, but perhaps its agreement with Sony helped lessen the format's death rattle, a scenario that seems especially likely given the fact that Toshiba coupled its eulogy for HD DVD with the announcement that it would be shifting its focus toward the opening of new factories.

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Posted by: RedM3
February 28, 2008 5:18 PM

Sony is smart enough to not let the Betamax scenario happen again. They learned that simply being the best isn't enough.


Posted by: W. WILLIAM BAUMGARDT
February 28, 2008 5:46 PM

I need to buy a new DVD player. Is Blu-Ray available now? How do its prices compare with prices of HD DVD players? Thank you.


Posted by: FijiBluSi
February 28, 2008 5:51 PM

That's an assumption that sony is the best. Their stock appears down, their movie unit still isn't performing, their consoles need a boost like this since Nintendo is eating their (and M$'s) lunch.

Considering how many upper management people have been shuffled in their offices, buying support is about all they have left, since their strategy and intelligence is in a continuous revolving door of being replaced.


Posted by: D Long
February 28, 2008 5:51 PM

I think you all need to tell the typical end user what they still have instead of talking about what we lost. I can't tell the difference on my Toshiba computers -- all four of them!


Posted by: D Shands
February 28, 2008 6:54 PM

I have always been turned off by companies that make their products totally propriatory and impossible to interface with other media. Sony earned my boycott when they came out with the memory stick. Pure arrogance thrown in my face. I truly wanted Blu Ray to fail, but like some really bad politicians in the White House, they bought their way in. I still think that HD DVD would have been better for the world in general and help a sagging economy in the electronics sector. Sony will set us all back for about 5 years now. I think the guys that caved in, especially Best Buy, were wusses.


Posted by: E Casey
February 28, 2008 7:47 PM

Being that both formats were using blue lasers and were so technically equal, it was clear that it would end up being marketing savvy that would tip the scales. I personally have waited since I did not want to buy an expensive drive that may end up on the losing side. Now that Blue-Ray has won, I can set my sights on getting a drive with confidence that it will be a format that will stick around for a long time.

Adressing the issue of it being a Sony proprietary format, the market for high definition movies is going to mushroom and it will be many companies jumping on the bandwagon to make players, burner and such, just like the cassette tape format became ubiquitous. Hardly anyone remembers it was a Phillips proprietary format. I don't care if Sony won this time. In the end, all consumers will win now.


Posted by: Pecos
February 28, 2008 8:10 PM

Fony, err, Sony, the same company that brought you the hidden root kits on music cds when you played them on your PC. Any time Fony wins, the consumers get screwed.


Posted by: Joe Servov
February 28, 2008 8:39 PM

Really, you skip several important points.

1) CE support, which Sony / BDA had more of
2) The fact that the best selling players on both sides are sold for a loss, but the PS3 stands a chance to get Sony money in the future.
3) That both sides used cash to woo studios.
4) It's not just Sony, it's the BDA despite all the HD-DVD people arguing differently.
5) Sales numbers didn't bode well for HD-DVD 2007 (compare this to the VHS / Beta war)
6) In reality it would probably be better to compare this to the DVD / Divx (CC Divx) war
7) HD-DVD seemed to be in desperation mode for a long time, some consumers smelled fear.

You skipped over all of these. They were the biggest items that determined the winner. Take off the conspiracy blinders...


Posted by: Dave
February 28, 2008 8:51 PM

Those protesting the mere rumor of a Sony payoff to Warner have short memories... it was only about a year ago that, on the first verge of a Blu-Ray win, the HD-DVD people paid Paramount $150 million to go HD-DVD exclusive, and effectively keep the "war" going.

It's also good to note that Sony really did seem to learn from their proprietary errors. But do keep in mind that, in the past, Sony intentionally made these things proprietary. MD, MicroMV, ATRAC, even Digital 8 were Sony creations largely only for Sony. Memory Stick was intentionally designed to drive the adoption of other Sony products by someone who buys one, even if today it's often seen as a customer repellant, given the success of SD.

But you can pull that kind of stuff in a recording market... you can't in a playback market. And this time around, Toshiba was playing the proprietary game. They were the only HD-DVD hardware vendor in town, and they were using their profits as the main folks behind the HD-DVD licensing stream to subsidize the price of the HD-DVD players. Meanwhile, just about everyone in the DVD food chain was doing Blu-Ray hardware. It's on this that Blu-Ray deserved to win... this was sufficient to drive the studios to Blu-Ray, knowing that no one CE company in the Blu-Ray market was overly powerful. With Toshiba owning pretty much the whole HD-DVD thing (well, along with Microsoft on the software), too few companies held too many cards... this was done like a gaming console, not a media format. Toshiba thought they could undercut Sony this way, but it shouldn't have worked, and we're better off they lost out.


Posted by: Dave
February 28, 2008 8:56 PM

Oh.. and "Blu-Ray" is about 11.8 zillion times cooler a name than "HD-DVD"... you can't even say "HD-DVD" without tripping your tongue. That's another reason we're far better off without it.


Posted by: Roberta
February 28, 2008 11:09 PM

Sony best? You must be joking! I have yet to own a SOny product that didn't fail prematurely, including 2 TVs, 1 cordless phone, reel-to-reel deck, 2 portable CD players, etc.

Never again will that company get any of my money for their products. Sony needs to learn that the alphabet includes the letters "Q" & "C".

Roberta


Posted by: Ken
February 28, 2008 11:53 PM

Well, everyone will have there opinions, but I am glad the war is over, so for those that have been waiting to get a high def DVD player, can now do so. I have owned many Sony products (TV's, CD players, Tape decks, cameras, video camera recorder)over the years and have never had any problems, they have all lasted way beyound there usefulness. I purchased a Sony 60" HD TV and a Sony Blu-Ray player in June 07 and have enjoyed them very much. I went with the Blu-Ray over HD-DVD after spending over a year looking at both formats and Blu-Ray was the best of the two.


Posted by: Dr. Planarian
February 29, 2008 6:24 AM

Blu-Ray won because it was clearly and unequivocally better in a technical sense. There was never any genuine doubt about who would win this fight from the very beginning. All the little skirmishes in between over studios and such were distractions.

The fact is, HD-DVD was never anything but a transitional format for a transition that was never really necessary in the first place. I mean, who needs DVD and HD-DVD on the same disk -- the ONLY technical advantage to HD-DVD? If you have an HD-DVD player you don't need the SD format, and if you only have a DVD player you don't want to pay the fairly stiff premium for the dual-format disk.

Toshiba was heavily invested in HD-DVD, and Sony benefited from an early abandonment of the failed format. It was only fair for Sony to make a concession on something like a chip factory -- nobody would benefit from Toshiba taking such a hit without some kind of compensation for its decision to end this format war. And we all benefit from the war's end, except maybe Universal and Paramount (and Paramount deserves the hit it will take because its decision prolonged this war for six unnecessary months).


Posted by: Stacy Hunt
February 29, 2008 11:28 AM

And I need either of these because? I am tired of buying my music and videos again every few years due to a new format coming out. Call me once It's digital over the net and I can do what I want with it storing it how I want it and using it when I want it for the rest of my life. If you can't do that for me go away. I've been sold the same music on album Cassette and CD. I am finished buying the software over and over.


Posted by: John Fatz
February 29, 2008 1:27 PM

I may be getting a little on the grey side, but stupid I am not. Evolutionary vs Revolutionary is what the HD vs BD was about. And while HD lost the battle, those who purchased the units did not. Prices were low, upscaling was phenomenal with sound formats properly implemented. BD? Hmm, no such luck, their newest announced release is just now having the same capabilities as HD had for sound, and with a BD player increase of cost of $100 per player. Such a deal.

With the HD players that I have purchased SD discs look great, HD movies that have been released are bargains, and well, this should hold me over until the next new thing is released, just not BD. No need for overpriced Sony technology.


Posted by: Torry Duffy
March 3, 2008 10:24 AM

A short comment about times and formats;
Betemax was the first format out and was sold as an electronic movie recorder with sound! The tape speed was high as was quality and price about $1000us. People soon found that their greatest use was tv show recording and were not as concerned about quality, enter VHS at $700us.

It took years for this fight to play out because a tape recorder was an expensive and for most people a luxury item.

Today for the great number of people buying the new and expensive HiDef tv sets, the dvd player, regardless of format is inexpensive necessity.

Now regardless of personal favor, when the two formats could be viewed side by side at one of the big box stores, the Blue Ray for what the reasons was preferred.

I have no dog in this fight and have like most waited for the dust to settle so as not to have a museum DVD archive.


Posted by: Phil
March 3, 2008 8:17 PM

To Mr Baumgardt:
Considrer this for a new DVD player: a now cheap Toshiba HD DVD player that also plays CD, CD-R, DVD, DVD+/-R. Walmart was dumping them at one point for $99USD. I paid $145 for a newer one. The movies in that format will are also cheap and I will bet will be cheaper on Ebay.
Philster_S


Posted by: Doug
March 4, 2008 2:42 AM

Sorry Sony. You may have won the battle but lost the war. As several have alluded, the war ain't over yet.

Let's examine a few points.

1. Consider that when Beta-max/VHS were battling, almost every home had several color TV sets and the units would both play tapes and RECORD. Availability of the display was not an issue. By comparison, HDTV is at under 50% market penetration and neither BD or HD records. It takes a broad market to drive down both player and programming cost. Will the market develop before technology provides a better alternative? I doubt.

2. The market for HD programming is growing but it is no where near what it will be in about 5 years when the market is saturated with 2 or more displays in most homes. But at the same time DVRs and HTPC's are already available and very cost effective to both record a playback downloaded programming. Fiber optic bandwidth to all homes is only a few years away. Satellite, DSL and cable are already ubiquitous. Why would anyone buy Blu-ray play-only technology if on-demand down-loadable content is readily available at the wall to your multi-purpose DVR (Tivo) or Home Theater PC?

3. The Blu-ray player's market dominance was based on a GAME console. There are fundamental differences ... like wires and controllers strewn around the room and odd shaped boxes that don't fit the in the AV stack. Also games are played for hundreds of hours and for that reason are more cost effectively bought. Movies are usually watched once or twice and therefore more cost effectively rented or downloaded as pay-per-view. Who needs more lost discs and jackets cluttering their life, getting lost or getting scratched by careless handling?

So sorry Sony, but Blu-ray is more like the 12-inch video disc than VHS or the DVD. It was good technology but had low market penetration until better alternatives beat it to the punch. Toshiba just saw the handwriting on the wall and decided to cut their losses. Sony hubris continues on ... again. So goes the war.


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