Why the DVD Wars will not end like the VCR Wars

The references have decreased recently, but it's still difficult to think about the battle between HD DVD and Blu-ray as anything but an evolution of the VHS vs. Betamax conflict, yet the war shows no signs of a cease fire, and even Sony CEO Howard Stringer has declared the battle a stalemate, to the chagrin of producer and consumer alike, but will the battle end decisively, and more importantly, would surrender benefit the consumer? Maybe not.

Small Victories

Blu-ray vs. HD DVD

In a few weeks, HD DVD sales will hit the 500,000 mark, while the PS3 alone with its built-in Blu-ray player has already sold over two million units in the U.S., but the number of titles available to each is nearly identical, and sales of total discs favor Blu-ray nearly 2 to 1. Those numbers would seem to favor Blu-ray, but the HD DVD players boast purchase prices around half that of the cheapest Blu-ray players, and with the busy shopping season approaching with tight wallets, that lower price tag should serve HD DVD significantly in its market share.

The Manufacturers' Advantage

As movie houses and computer manufacturers line up on one side or the other, Microsoft for HD DVD and Apple on Blu-ray; Disney on Blu-ray, Paramount on HD DVD, competition and heels firmly dug in show no signs of an end to the battle, and as prices continue to decline, the practicality of the average family purchasing both players becomes a reality. Few could justify the $1200 price tag of the LG Hybrid player, but the possibility of a $100 HD DVD player on Black Friday remains (Wal-mart still litigiously guards their ad.). Manufacturers being able to convince consumers to buy both players would be a financial coup for both camps and would make the differences in formats irrelevant.

What is it good for? The consumer!

The prices of players have plummeted over the past year, and the competition between the two platforms cannot be discounted as a contributing factor. Likewise, Blu-ray stands poised to add additional interactive features initially only available in the HD DVD format. Competition nearly always benefits the consumer, so why would we want peace between the platforms?

Consider the video game console wars. Competition has motivated not only the improved hardware of the PS3 and XBox 360, but the innovation of the Wii. All three platforms continue to battle for the best online experience, with XBox Live generally accepted as the winner for a second generation in a row, but all three showing significant improvements over the last generation.

Alternatives?

Many pundits suggest that downloadable content will make this war moot, but unless some kind of inexpensive removable storage can be used with a set-top device, this seems unlikely. Imagine never deleting any movies off your DVR! Distribution of MPEG-4 movie files on SD cards, USB flash drives, or other portable hard drives would cost significantly more than an optical disc, and you can bet that the manufacturers would feel compelled to pass that cost on to the consumer, benefiting neither as sales would drop.

Keep the Fire Burning

As long as the two camps continue to engage each other, prices will continue to drop for both players, likely faster than the standard technology deflation rate, and the feature set will continue to grow. While most consumers tie yellow ribbons around their remotes in hopes of a quick end to the disc war, I will remain hawkish, sit back, and remember that the fastest technological advances always come in wartime. Viva la revolución!

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