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Mickey Mouse Makes a DVD Pick

By Cynthia L. Webb
washingtonpost.com Staff Writer
Thursday, December 9, 2004; 9:46 AM

It's the 21st century's equivalent of Betamax vs. VHS.

In the battle for a souped-up DVD standard, major players are lining up behind two dueling formats. Walt Disney Co. is the latest studio to throw its weight behind the "Blu-ray" format, pitting it against an A-list of other Hollywood heavies who are already behind the rival HD DVD format.

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How the new DVD format battle shakes out will determine how consumers watch DVDs in the future and have major implications for both consumer electronics companies manufacturing DVD players and Hollywood studios, which depend on DVD distribution and sales to boost box-office revenue for films.

Disney said yesterday that it aims to release several titles on Sony Corp.'s Blu-ray format, an announcement that came just a week after Paramount Pictures, Universal Pictures and Warner Bros. officially embraced Toshiba-backed HD DVD, the Wall Street Journal noted in its coverage today. The paper explained how Disney's decision levels the playing field: "Disney's move late yesterday means that the major Hollywood studios are now fairly evenly divided between the two formats, as Sony's Columbia Pictures and Metro-Goldwyn-Mayer Inc., which Sony is acquiring, are in the Blu-ray camp. All the deals, including Disney's, are nonexclusive, meaning a studio could switch loyalties at any time. The only studio yet to choose a side is News Corp.'s Twentieth Century Fox. Both formats provide extra-sharp resolution along with cutting-edge interactive elements that are meant to enhance the DVD experience, especially in conjunction with new high-definition televisions. And both provide advanced copy protection, making it harder for pirates to copy movies."
The Wall Street Journal: Disney To Support Sony DVD Format (Subscription required)

London's The Guardian reported that the "battle between the two formats, reminiscent of the 1980s fight between Betamax and VHS for control of the videotape format, will determine which product cinema fans will have to buy to view future releases. Disney said it is backing Sony because Blu-ray offers higher quality and was backed by most consumer electronics manufacturers. But Warner, Universal and Paramount are supporting Toshiba's HD-DVD product because they say it offers better anti-piracy guarantees." In its short article on the Disney news, The New York Times noted that the "group led by Sony -- and including Panasonic, Sharp and Samsung, among others -- has decided to develop a new format on the assumption that consumers will buy only discs and players with noticeably new technology."
The Guardian: Disney Backs Sony In DVD Format Battle
The New York Times: Disney Picks Sony Format for DVD's of Its Films (Registration required)

Bloomberg also noted that Disney might play both sides, reporting that "Disney's Buena Vista Home Entertainment will start releasing movies in the format when Blu-ray DVD players are available in North America and Japan, the Burbank-based company said. Disney said it might still release movies in the competing format by Toshiba Corp."
Bloomberg via the Los Angeles Times: Disney Adopts Sony's Blu-Ray Digital Format (Registration required)

Competition is the engine of capitalism, but The Scotsman of Edinburgh suggests that may not be the case in the DVD format war: "Two decades after the battle between VHS and Betamax, the world's biggest electronics firms are gearing up for another drawn-out video format war that is likely to confuse consumers and hinder the industry's transition to next-generation DVDs." An interesting assertion, though it's hard to argue how the Betamax-VHS struggle handicapped the 1980s VCR explosion. To make its case, The Scotsman quotes CLSA Asia Pacific Markets analyst Carlos Dimas: "A protracted format scuffle would hurt profitability across the industry by making consumers uneasy about buying next-generation products and shortening the window of opportunity for makers to recoup development costs, argues Mr Dimas."
The Scotsman: Squaring Up For the Latest Round

The Race to Be First

If getting a technology to the market first counts, HD DVD has the leg up over Blu-Ray. According to Business Week, "Blu-ray is likely to be available in early 2006. This technology is being pushed by Sony and a large coalition that includes most of the industry's largest consumer-electronics and computer makers -- a key reason why Disney decided to go with it instead of the rival HD Group, says Peter Murphy, Disney's senior executive vice-president and chief strategic officer. The rival HD DVD format ... is expected to be on the market more quickly because it requires fewer modifications to existing DVD technology. It has three times the current space on a DVD for extras -- but is cheaper to produce, at least initially, than Blu-ray. Moreover, the three studios that signed on with Toshiba say they expect to begin selling some DVDs on the Toshiba-backed format later in 2005."
Business Week: The Arms Race Over High-Def DVDs

If HD-DVD gets the out-of-the-box first prize, Blu-ray might get the prize for an A-list of backers. CNET's News.com further explained the roster of companies behind Blu-ray so far. "Disney will become a member of the board of directors at the Blu-ray Disc Association, which is developing and marketing the next-generation disc format. Sony Electronics, Dell and Hewlett-Packard are also influential names on the board," CNET said.
CNET's News.com: Disney To Support Blu-Ray Disc

Stacking Up Blu-Ray vs. HD DVD

So what's the difference? "At the core of both formats," The Scotsman reports, "are blue lasers, which have a shorter wavelength than the red lasers used in current DVD equipment, allowing discs to store data at the higher densities needed for high-definition movies and television. But Blu-ray and HD DVD have different weaknesses and strengths relating to cost, capacity and speed. Neither side appears willing to throw in the towel, making it likely that products based on competing formats will be on shelves as early as next year."

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