HD DVD Goes The Way of Betamax
Maker Yields Battle to Blu-ray Disc Format

By Mike Musgrove
Washington Post Staff Writer
Wednesday, February 20, 2008

Jon Francke, a buyer at the video-rental chain Potomac Video, just placed his company's first order for Blu-ray discs.

Until now, his company avoided stocking its stores with either of the next-generation movie formats because, he said, "who wants to spend thousands of dollars on a format that's going to be obsolete in a few years?"

But now he considers it a safe move, after the consumer electronics maker Toshiba announced yesterday that it would cease building machines to play its HD DVD video format, effectively ending a battle between two rival technologies vying to replace the DVD.

Both HD DVD and Blu-ray offer programming on DVD-size discs that deliver crisp pictures with higher resolutions than the standard DVD format, which still dominates the industry. The two formats are incompatible with each other, so it was widely assumed that one would prevail.

And Toshiba's move was hailed as the raising of Blu-ray's fist in the boxing ring.

"We carefully assessed the long-term impact of continuing the so-called 'next-generation format war' and concluded that a swift decision will best help the market develop," Atsutoshi Nishida, president and chief executive of Toshiba Corp., said in a statement yesterday.

HD DVD's defeat came in swift, successive blows.

In January, Warner Home Video announced that it would no longer support HD DVD as a result of its rival's stronger sales -- a move Toshiba cited in its decision to abandon the format.

After that, a series of similar announcements seemed to further spell doom for the format, as Toshiba slashed the prices of its HD DVD players, hoping to revive interest in its technology.

The online movie-rental service Netflix sent subscribers a notice last week that it would phase out its HD DVD library. Best Buy and Wal-Mart, meanwhile, announced that they would embrace Blu-ray over the rival format.

Then yesterday, Universal Studios Home Entertainment, one of the last major studios to support HD DVD, said it would move to the Blu-ray camp. In a statement after Toshiba's announcement, Craig Kornblau, the company's president, said, "It is time to turn our focus to releasing new and catalog titles on Blu-ray."

Meanwhile, for those unlike Francke who didn't wait for an industry verdict, the effective demise of HD DVD meant having to scramble to return recent purchases.

Bethesda resident Richard Hsu bought an HD DVD player from Wal-Mart in November but was able to return it after the retailer announced that it wouldn't support the format anymore. "Thank goodness for liberal return policies," he said.

For Hsu, it was a close call reminiscent of the last major video-format battle -- between Betamax and VHS. "We were one of those families who bought a Betamax back in the '80s," he said.

Sony, which lost the Betamax battle, emerged one of the major winners this time, as a founding supporter of Blu-ray. The company's PlayStation 3 game console, for example, comes with a built-in Blu-ray player.

Many early PlayStation 3 owners said Blu-ray was a selling point.

"Blu-ray made a big difference in my decision to buy a PlayStation 3," said Evan Weiner, a PS3 owner in Arlington. Weiner admitted he was "a little nervous" about buying into a format that could be made obsolete by the competition, but Sony's aggressive marketing tactics for Blu-ray gave him enough confidence to invest in a growing library of titles. "They're expensive, but they're awesome," he said.

Neither of the competing formats has gained much traction in the market, said Phillip Swann, president of TVPredictions.com. While there are high-definition TV sets in 30 million homes in the U.S., only about 1.5 million households own a stand-alone player in either format.

"That shows [both HD DVD and Blu-ray] did a horrible job" generating enthusiasm, he said.

Swann said confusion among consumers over the competing formats has been an element in slow sales for both formats. And for some, the caution was justified. "Now you have a lot of people who bough HD DVD players who wish they hadn't," he said.