Blu-ray beats HD DVD—now what?

Editor’s Note: This story is excerpted from Computerworld. For more Mac coverage, visit Computerworld’s Macintosh Knowledge Center.

So the high-definition DVD war’s over, and to the victor go the spoils.

Now that Sony’s Blu-ray Disc DVD format has beat out Toshiba’s HD DVD, the question arises: Just what spoils are there? Many consumers have been put off by the high-definition DVD format wars, leaving sales of both formats sluggish at best. Some are speculating that because of the end to the war, sales will pick up. Let’s look at some of the numbers.

Last year, about 32 million DVD players were sold in the U.S.; of those, only 4 percent, or 1.5 million were high-definition DVD players. Blu-ray Disc players accounted for 578,000 of that number and HD-DVD accounted for 370,000, according to Adams Media Research. That’s almost a 2-to-1 ratio. After Warner Bros. pulled its support of HD DVD last month, the percentage of Blu-ray to HD DVD sales skyrocketed. Blu-ray accounted for 93 percent of hi-def DVD hardware sales in North America in the week after Warner’s announcement—although the overall number was small: 21,770 players. Multiply those sales out over the full year and you’re still looking at just over 1 million hi-def players sold.

After the news broke Monday that HD DVD was about to raise the white flag, geek news site Slashdot put up an impromptu poll for its readers asking, “Now That Blu-ray Has Won …?”

Almost half of 28,000 respondents at the time of this story’s publishing said they still aren’t convinced high-definition DVD is worth the upgrade from traditional DVD technology. The next biggest group of respondents said they are still waiting for high-definition downloads. Geeks tend to be early adopters of technology, so this poll could be very telling.

So what was the big difference between HD DVD and Blu-ray?

In a word: capacity. HD DVD offers 15GB capacity on a single-layer platter, while Blu-ray offers 25GB. More capacity means more data; more data generally means better images and better sound when it comes to hi-def movies.

From a manufacturing standpoint, HD DVD had it all over Blu-ray in that machines used to press standard DVDs could also be used to produce HD DVD discs with just minor tweaking. Blu-ray, on the other hand, required DVD manufacturers to change out their disc-pressing equipment, vastly increasing start-up costs. That also explains how HD DVD made it to market before Blu-ray.

What pushed Blu-ray to win the format wars?

From the start, Blu-ray had an edge over HD DVD because Sony’s PlayStation 3 (the most popular gaming console) came with a Blu-ray player. The more PS3s sold, the more Blu-ray players were in people’s hands. Contrast that with HD DVD, which was paired with Microsoft’s Xbox game console.

Over time, more and more movie studios, electronics manufacturers and retailers began throwing their weight behind Blu-ray. Many studios, such as Warner Bros., which had supported both formats, recently pulled their support of HD DVD for Blu-ray exclusivity. Others quickly followed Warner Bros’ lead. As of last week, Blu-ray had the exclusive support of Twentieth Century Fox and Walt Disney, as well as major electronic manufacturers such as Apple Computer, Dell, HP, LG Electronics, Panasonic, Pioneer, Samsung and Sharp. Wal-Mart, Netflix, Target and Blockbuster also sided with Blu-ray.

“People buy high definition DVD players to watch movies, and without the support of the studios, there was no way HD DVD could survive for long,” explains ABI Research analyst Serene Fong.

Will Toshiba offer support for discontinued players?

Yes. According to Toshiba, it will continue to support its existing HD DVD players for the foreseeable future. Customers seeking technical support can dial: 1-888-694-3383.

Apple is a Blu-ray backer. Any ideas whether it’ll put Blu-ray drives in its computers?

Mum’s the word—so far. Though analysts have speculated that it makes sense for Apple to do so, the company is notoriously quiet when it comes to talking about upcoming plans. Officials could not be reached for an official “no comment” comment, and there’s a complicating factor: Apple is pushing hi-def movies over its own Apple TV using its iTunes Store. In fact, that could be the next hi-def fight.

Is there any chance this means the price of Blu-ray players will fall?

Don’t look for it right away. The price of Blu-ray players has already been dropping in light of increased sales, but consumers shouldn’t expect to see Blu-ray player pricing dropping to HD DVD price levels anytime soon, according to ABI Research. “None of the Blu-ray vendors, except Sony, have shown any propensity to drive player adoption through lower prices. They are more likely to let the studios wrap the box with Blu-ray discs as an incentive,” ABI Research states in a research note.

More Taiwanese vendors picking up Blu-ray will help bring down prices, but it will be another 12-18 months before the Blu-ray format reaches the maturity and value of that offered by HD DVD. Consumers are the losers in the short term, ABI Research says.

Take heart, though, if you’ve waited. Early, early adopters—including an editor here at Computerworld—spent $999 in early 2007 for one of Sony’s first Blu-ray players. Sure, he got ahead of the tech curve and even backed the right format. But someone buying a player now can find them for between $300 and $500. And with time, even those lower prices will fall.

How else can Blu-ray Discs be used?

Hitachi has already demonstrated a 100GB Blu-ray Disc, which combines four layers, each offering 25GB of capacity. TDK and Panasonic have also announced 100GB Blu-ray discs. Not only will single platters be able to hold additional movie content, but the Blu-ray Disc format makes an excellent medium for data archives. It’s very likely that in the future, corporations will use the optical media to store long-term records.

In fact, if you’re sitting at a computer with less than 100GB of data on your hard drive, you could back up the whole thing to just one of those disks. And Sony recently announced a $200 Blu-ray drive for computers. Whether computer makers will start actually using the drives remains to be seen.

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