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Competing DVD formats prepare to launch
Thursday, March 16, 2006

For the past four years, electronics makers have battled among themselves about how to make a better DVD. Unable to decide, they are now going to face off in the marketplace -- starting this month with the U.S. rollout of the first next-generation DVD player from Toshiba Corp.

Toshiba's HD-A1, which goes on sale later this month at $499, is the first machine with a new DVD format called HD-DVD, a moniker that emphasizes "high definition" picture quality. On May 23, Samsung Electronics Co. will launch the first machine working on a competing format called Blu-ray, a reference to the color of the laser that reads the new disc. Samsung's machine, called BD-1000, is expected to be priced around $999.

While consumers can buy DVD players for as low as $35, both formats will hold five to six times the amount of data as existing DVDs, allowing movie studios and game developers to offer even better video and sound quality and more features on them. And with both formats, viewers can expect to see sharper pictures, more vivid colors and hear deeper sounds, than in existing DVDs, though it will be hard to tell a difference between the two new types. And you won't be able to enjoy the high-quality images unless you also have a high-definition television set or computer screen.

In a recent demonstration of a Blu-ray machine, a shot of sunlight breaking through an overcast sky was so crisp that wispy tendrils of the clouds were visible. The two types of players won't play discs from the other high-definition format, though they will play existing DVDs and CDs.

When the original DVD emerged a decade ago, the prospect of a market-debilitating format war drove electronics makers to agree on a single design. But no agreement emerged this time despite months of delays, informal talks between engineers, formal negotiations by corporate attorneys and a chorus of other companies with money at stake -- including movie and game studios, computer makers and software firms -- urging compromise.

Toshiba hopes to grab an early lead in the race. In addition to the HD-A1, it also unveiled last week the first notebook computer with a built-in HD-DVD drive, which will become available at the end of March or in April in some areas. The company upgraded the screen on the device to take advantage of the better DVD player.

Meanwhile, Sony Corp., which led development of the Blu-ray format, isn't saying when it will start selling Blu-ray machines. Its first is likely to be its Playstation 3 game machine, expected to go on sale in Japan in the next few months. But a specific date hasn't been announced and some analysts think the launch may be delayed. The company will release a Blu-ray DVD player and a Vaio notebook computer equipped with a Blu-ray drive sometime in the summer. Sony hasn't announced prices for any of its Blu-ray machines, but analysts estimate the PS3 might retail for $499 in the U.S.

Next-generation DVD players will roll out in phases in the rest of the world later this year, chiefly tied to the availability of prerecorded movies to play on them, manufacturers say.

Manufacturers hope consumers won't let a format choice discourage them from buying a new DVD player, as happened when Betamax and VHS videocassette recorders competed in the late 1970s and early 1980s. But the next-generation DVD players are facing an even tougher competitive environment because there are lots of other kinds of recording devices to choose from, including hard-drive recorders such as Tivo, broadband-delivered video on demand to PCs and TVs and even the rise of portable, chip-based storage cards.

What is more, the new machines have plenty of other limitations as they arrive. Only a handful of movies will initially be available in the new formats. Sony recently said it aims to sell 16 Blu-ray titles by June, including "Hitch" and "Kung Fu Hustle." Other studios have committed to releasing movies on Blu-ray discs, including News Corp.'s Twentieth Century Fox, Lions Gate Entertainment Corp., Time Warner Inc.'s Warner Bros., Viacom Inc.'s Paramount Pictures, and Walt Disney Co.

The HD-DVD side has fewer studios lined up, though they say they will have movies out soon after Toshiba's players reach stores. Paramount is releasing movies like "Four Brothers" and "Sahara" onto HD-DVD. Warner Bros. will have titles like "Charlie and the Chocolate Factory." General Electric Co.'s Universal Studios Inc. will offer titles like "Jarhead" and "Doom."

Sales outside the U.S. will be limited by Hollywood's continued insistence on using technical codes to assign discs to certain regions. And the problem of not being able to see high-quality images without a high-definition TV set or computer screen is diminishing in places like Japan, some European countries and the U.S. Some TV-set manufacturers predict that nearly half of the 28 million TV sets sold in the U.S. this year will be capable of showing high-definition pictures. Currently, roughly 90 percent of homes in the U.S. have a DVD player.

Which format will ultimately win is an open question. Sony lined up a greater number of hardware makers and movie studios to back Blu-ray, but some have shifted their allegiance as delays continued. Microsoft Corp. switched to HD-DVD and dragged Hewlett-Packard Co. in its wake. Just last month, LG Electronics Co., a longtime supporter of Blu-ray machines, decided to license HD-DVD technology from Toshiba. The company is deciding whether to bring out separate players or create hybrid devices that can accept both formats, a spokeswoman says.

"It's unfortunate they couldn't come together to create one format," says Greg Mesmer of Audio Video Consulting, an electronics dealer in suburban Boston. "This divisiveness is only going to cause people to stay away."

Still, hardware makers are confident the new generation of DVD players will find traction with video and game enthusiasts and spread to the mainstream over time. "We're not talking about going after the masses on Day 1," says Tim Baxter, senior vice president of marketing at Sony's U.S. unit. "We're going after educated consumers who are aware that there are different formats available and are willing to educate themselves about the differences and benefits."

First published on March 16, 2006 at 12:00 am
Sarah McBride contributed to this article.