JOEL BRINKLEY BLOG

Everyone who visits this site knows that high-definition DVDs are nearly here. Most everyone also knows that, like many great advances in consumer electronics, a format war seems almost certain to doom this one.

Almost 10 million people now have high-definition displays, meaning that almost 10 percent of the nation's homes are capable of receiving HDTV. Still, almost seven years after the transition began, receiving HDTV is either difficult or expensive. Over-the-air HDTV is abundant but relatively hard to receive. A relatively sophisticated antenna—not just rabbit ears—is needed. Meanwhile, cable and satellite high-definition programs come with significant monthly programming fees.

Enter high-definition DVDs. Buy a new high-definition DVD player—likely a pricey upfront cost—and then rent the new DVDs from your local store, NetFlix, or wherever. Pre-packaged HDTV to watch at home for a few dollars per movie. Perfect! Didn't the advent of rental VHS movies spawn the almost universal acceptance of VCRs, which were a rather expensive novelty in the early 1980s?

I bought my first VCR in 1981 and paid $1000 for a full-featured (back then) top-loading Panasonic. Well, $1000 in 1981 dollars is equivalent to $2101 today, which means that, for the same price, a consumer could almost buy a $1000 HD DVD player and an excellent HDTV. A Sony 36-inch direct-view HDTV can be purchased for $1400, and many others sell in that general price range. With the ability to watch high-definition movies right out of the box, I believe millions of fence-sitting potential buyers will head to Best Buy and pick up an HDTV.

So the consumer electronics industry should be doing everything it can to speed the introduction of this new medium. Studios want it—many of us will buy movies all over again in high-definition. Big CE companies want it—consumers will buy millions of new DVD players as well as millions of new HDTVs. What's the downside? There is none. So why can't the two rival camps come to an agreement?

As most of you already know, a consortium led by Sony and another led by Toshiba are offering competing, incompatible standards for the next-generation, high-definition optical disc. Each of them has lined up significant studio sponsors. Sony and its many partners are offering the product known as Blu-ray. Of course, it is backed by Sony Pictures and its brethren (Columbia TriStar and MGM), as well as Disney and game companies Electronics Arts and Vivendi Universal. The Toshiba group's offering is called HD DVD, and it has the support of Warner Brothers, Paramount, Universal, New Line, and HBO.

On the hardware side of things, Blu-ray is backed by most of the major CE companies. By contrast, HD DVD's hardware support comes mainly from Toshiba, NEC, Sanyo, and Thomson.

Both formats use blue lasers, which have a shorter wavelength than the red lasers used with today's CDs and DVDs. As a result, they can read smaller pits on a disc. With smaller pits, more can be fit on a disc, raising the capacity.

Capacity is Blu-ray's big advantage. It can hold 25 gigabytes per layer, compared to 4.7GB for a standard single-layer DVD. The creators say they can push that up to 200GB in the near future using multiple layers and both sides; TDK recently announced they had developed a 4-layer, single-sided prototype that holds 100GB. HD DVD says it can hold 15GB per layer with up to three layers on one side of a disc. But don't get stuck on those numbers. Both camps are reconfiguring their claims and possible configurations by the hour.

Then there's the issue of disc manufacturing. The HD DVD camp claims that their discs use the same physical structure as current DVDs and therefore can be made with essentially the same equipment, whereas Blu-ray requires substantially different equipment. The Blu-ray group acknowledges that their disc structure is different, but they counter that once volume production begins, the cost differential will become negligible.

The HD DVD camp boasts that their format allows dual-format players—conventional DVD and HD DVD. There is no reason Blu-Ray could not do the same thing, though it would probably be more expensive to produce. The real question is whether or not a dual-format Blu-ray/HD DVD player can be economically produced, which would render a format war moot.

Another way to avoid a format war is for the two sides to reach a compromise agreement and develop a single standard. To that end, the two camps started talking a few months ago with the aim of combining their formats. To succeed, one side would have to give in because the two formats are essentially incompatible.

Late last month, Tadashi Okamura, the president of Toshiba, acknowledged that the talks were not going well. "We may actually have a situation where merchandise from both sides is put on store shelves," he conceded. But then he admitted the obvious. "The market would not allow that situation to last long."

In other words, the stubborn insistence of both camps to plunge ahead in a competitive heat is likely to leave both formats stillborn when they launch. Everyone compares this to the VHS-Beta battle of 25 years ago. But what about DVD-Audio and SACD? Six years after their launch, both formats are ciphers at best.

Junio Nakamura, Matsushita's president, remarked last month that "the talks, they have not collapsed, but Matsushita and Sony have not changed their stance. We are waiting for Toshiba's decision." In other words, Sony and Matsushita (maker of Panasonic products) are perfectly happy to talk to Toshiba as long as that camp will accede to Blu-ray's physical structure.

Blu-ray discs have a data layer only 0.1mm from the disc surface, while HD DVD discs write data on a layer 0.6mm from the surface. The Blu-ray format allows for greater capacity, while the HD DVD format allows for greater compatibility with current DVD players and manufacturing facilities. In any case, Nakamura said, "There is still a chance to create a new format, but we will not waver from the 0.1mm point."

In addition, both sides are holding out for significant royalty payments not just from players and TVs, but from discs, computer drives, and a host of related products. But the truth is, the royalty payments will be meager at best if consumers sit back and buy nothing rather than invest in a format that may die. HD DVD plans to begin selling its first players late this year and has already made public the names of 85 movie titles to go on sale at the same time. Sony expects to sell its first players in 2006.

All of us want a high-definition optical disc format. No consumer-electronics product on the horizon is more important. Please, this time, don't let us down.