Red-Letter Day For Blu-ray

Toshiba throws in the towel on the HD DVD format, which seems destined to join the extinct Laserdisc and 8-track tape as a loser in the Darwinian clash of technologies.

By Eric Benderoff - Tribune Reporter

February 20, 2008

Consumer technology is littered with dead formats.

There was Betamax versus VHS. We know how that turned out.

Then cassette tapes trumped the 8-track and vinyl gave way to CDs.

Now another format -- the high-definition video format known as Blu-ray -- has won the market's approval, sending the competing HD DVD format to the bins at garage sales.

Jeff Moyers is one consumer who learned his lesson. He watched this format battle from the sidelines.

"I still own a Sony Betamax that works," the wine trader said. "I was secretly hoping Sony would win this one, and now they have."

He will soon start shopping for a Blu-ray player to pair with the 52-inch Samsung LCD HDTV he bought during the 2007 holiday season.

Sony backed the Blu-ray format, which received a big boost when the format was used for the PlayStation 3 video gaming console.

The loser was Toshiba Corp., the main sponsor behind HD DVD. Other losers are the roughly 1 million customers worldwide who bet on the HD DVD format. About 600,000 are in the U.S., according to Toshiba.

Reign may be short

Overall, about 1.4 million next-generation DVD players -- Blu-ray and HD DVD -- were sold in the U.S. by the end of 2007, according to Steve Koenig, an analyst for the Consumer Electronics Association. That doesn't include figures for the PS3 gaming system, of which Sony has sold more than 10 million worldwide since 2006.

Yet even in victory, Blu-ray may not reign long. In fact it could still become the "Laserdisc of its day," Honolulu consumer Owen Nobuji said with a laugh about the format that died quietly in the 1990s when DVDs became widely available.

That's because the next generation of video release is already here, even if it remains in infancy: digital delivery of movies and TV shows directly from the Internet to a computer, TV or hand-held device.

Computer companies and consumer product-makers, including Apple, Microsoft, Samsung and others, have introduced or recently upgraded products for sending movies over the Web. Also, DVD rental services, such as Netflix and Blockbuster, are streaming movies over the Web to interested customers.

At Netflix, which has more than 90,000 DVD titles available, about 7,000 of those can be streamed over the Internet. Compare that with the relatively slim choices of Blu-ray and HD DVD titles: Netflix currently offers 480 Blu-ray titles and 411 in the HD DVD format.

The Blu-ray disc should see a surge in new interest after Toshiba confirmed Tuesday that it will stop developing the HD DVD format.

"There are a handful of HD DVD early adopters that are saying 'aw nuts,' but the vast majority of people sat this one out," said Steve Swasey, a spokesman for Netflix. "That war was not great for the format. We're very pleased that this has been resolved."

Reluctant to invest

The lack of titles in a high-definition format, compared with the vast array of other titles on the standard DVD format, is due in part to studios being reluctant to invest too much in a format that may not exist much longer, several sources said.

The tipping point for HD DVD's demise came in January. Only days before the crucial Consumer Electronics Show opened, Warner Bros. announced that it would no longer support HD DVD. That meant four Hollywood studios picked Blu-ray and only two studios would release content on HD DVD.

"We were agnostic in all of this, but when it became obvious the studios were making a choice, the writing was on the wall," Swasey said. Then last week, three major DVD providers -- Netflix, Best Buy and Wal-Mart -- all said they would support Blu-ray.

"Perception became reality very quickly," said Mark Cook, the general manager for Abt Electronics in Glenview. "Nothing fundamentally changed. In fact, Toshiba was being very aggressive with price cuts and marketing."

An HD DVD player can be had at Abt for as little as $130 today. Cook said some customers might still want one at that price since Toshiba has "a really good up-converter" that makes standard DVDs look better on HDTVs. "It's a good product. And affordable."

Abt sells Blu-ray players starting at $399.

"It would be nice if Blu-ray players started to come down a bit," Cook said. "Truthfully, with all the other technologies that people have access to right now [including streaming content from the Web], no one should be cocky that they won anything today."

That sentiment was shared by David Friedman, the president of the central region for online marketer Avenue A/Razorfish.

"The 'war' isn't over," he said.

"It has ended on one front but will continue on other fronts. Phone, cable, and satellite companies are rolling out new video on demand and IPTV offerings. The quality is already good and will soon be as good as Blu-ray. So, the real question is -- how much longer will consumers be watching DVDs?" he asked.

©2008, Chicago Tribune