http://arstechnica.com/news.ars/post/20070925-hd-dvd-and-blu-ray-deadlock-to-continue-into-2009-at-least.html

HD DVD and Blu-ray deadlock to continue into 2009... at least

After saying two years ago that Blu-ray would be the clear winner, Forrester Research is now saying that an eventual victory by Blu-ray is no longer guaranteed. The research firm is now predicting what many observers have already concluded: we're looking at a protracted format war that's going to last well into 2009—at the earliest—before a clear victor emerges.

Forrester lays the blame for the continuing of the war at the feet of Blu-ray, saying that the format's backers failed to land an early knockout punch. But that assumes that either of the two formats are even capable of landing serious blows at this stage of the game. As we've pointed out before, the market for HD optical disc players is tiny at this point. The vast majority of Blu-ray players in consumer households come in the form of the PlayStation 3; HD DVD has the lead when it comes to standalone players.

Earlier this year, Blu-ray appeared to have finally seized the initiative from HD DVD. Blockbuster decided that its corporate-owned stores would settle on Blu-ray as their default HD format, while the Blu-ray Disc Association managed to convince Target to devote extra display space to Blu-ray during the upcoming holiday shopping season.

Last month, Paramount further muddied the waters for consumers when it decided to abandon Blu-ray (with the exception of films from Steven Spielberg) altogether and throw its considerable weight behind HD DVD. In choosing to do so, Paramount cited advantages of HD DVD, including lower manufacturing costs, mandatory Managed Copy (for backups), and mandatory connectivity (all HD DVD players must contain an Ethernet port). What Paramount didn't mention, however, was the roughly $150 million in "financial incentives" the studio will get from HD DVD's backers.

So far, Paramount is the only studio to switch teams. Warner, which has shelved its plans for dual-format Total HD discs, has decided to continue playing both sides of the street, while the other studios remain firmly entrenched in their respective camps. The polarization raises the stakes for consumers worried about making the wrong choice when shelling out big bucks for an HD player.

There's also a third format that's going to be launched in time for the holiday shopping season. HD VMD promises to keep prices for 1080p content down by sticking with red lasers and 30GB discs. While its prospects are dim without the major studio support that it currently lacks, HD VMD's appearance has the potential for creating still more consumer confusion when it comes to buying HD players.

Forrester has a couple of tips for the backers of Blu-ray: drop the prices on Blu-ray players and make sure that HD DVD doesn't steal any more studios away. Having recently swallowed the bitter pill of Paramount's defection, the Blu-ray Disc Association will fight hard to prevent other studios from abandoning the format.

The price drop may be a bit trickier. If there's one clear advantage HD DVD has at this point, it's price. During a promotion late last spring, HD DVD players briefly broke the $300 barrier courtesy of a rebate. In its wake, the HD DVD Promotional Group said that it saw a bump in sales. In contrast, higher component and manufacturing costs have kept the price of Blu-ray drives $100-200 higher than their HD DVD counterparts. A quick scan of Amazon.com shows the cheapest Blu-ray player, the Sony BDP-S300, priced at $437.79; the least-expensive HD DVD player, the Toshiba HD-A2, is almost $200 cheaper.

Keep in mind that the vast majority of consumers are not early adopters (which is why it took DVD almost 10 years to surpass VHS in terms of household penetration). As a result, consumers are mostly uninterested—if not unaware—that there's a format war going on right now. Sales are flat, and indications are that the battle between Blu-ray and HD DVD will continue into the next decade.

But but but, Sony already won. That's all I keep hearing at least.

Seriously though, this isn't surprising. If the video game race isn't settled after 2 years and about 15% of systems sold then the format race is even less settled after only 1 year and less than 1% of new players/movies sold.

Thanks for screwing us over, Paramount. This crap could've been over with by Holiday '08.

Blockbuster, Target, none of that compares to losing a whole movie studio.

The video game race is completely different from a format war.  Consumers don't want to be cought on the losing side of the format war, so they tend to wait things out for a while then jump in with whatever format seems to be winning.  In video games, most people don't care who's "winning".  They just go with the system that they like, for whatever reason, because they know their investment is safe (unless another Dreamcast happens).  

All the people that buy the losing format will be virtually screwed in 5-6 years, because they won't be able to find hardware or software for that format anymore, so once their player goes, or if they lose a movie, there's nothing they can do about it, and they can't continue to buy new movies on the format, forcing them to adopt the other format and paying for two players instead of just one.  With video games it's different, because you can be assured that ps3s and ps3 software will be sold until the ps4 comes out, if not long after, even if the ps3 finishes far in third place.  

My point is that, in a format war, once one side starts winning handily, things begin to snowball.  More people begin to jump into the new formats on the side of the winning format, because they don't fear losing out.  Then, the winning side ends up even further in the lead, helping to ensure it's victory. 

In the video game war, things could change drastically year to year, depending on developer support and other factors, resulting in a turn of the tide for one system, because people will still buy that system even if it is "losing" because they won't actually lose anything, just because the system has a smaller marketshare.  They won't be stuck with a near worthless item.  Betamax players, anyone?

Of course, things could turn out the like the video game wars often do, should dual format players become the norm.  But then, neither side really "lost" anyway.

as i have said before both are new lazer discs not enough sales as a percentage of market, they barely passed vhs in sales this year, do they even release new movies on vhs anymore, outside of gas stations i dont see vhs anymore

At this point I just want a resolution to this stupid format thing. I was happy before Paramount went exclusive because it looked like we could finally see the light at the end of the tunnel. I don't care who wins, I just want it to end. I hope Warner goes exclusive (to either side) because that would help straighten out this mess.

actually makingmusic476, sony supported betamax for 27 years... i think my investment will be fine.

Pretty weak article, lacks argument for its view on things.

That's silly. HD-DVD is the best format for the consumer because cost and prices are lower and it guarantees fair use (whereas Blu Ray attempts to prevent it).

Walmart has a better chance of determining the victor moreso than any movie studio. They sell more DVDs and more DVD players than anyone. By a lot.

Price can win this battle.  The PS3's Blu Ray player numbers are difficult to accurately interpret because less than half of the people who own a PS3 know it is an HD console and even fewer intend to play Blu Ray discs on it at any point (according to a recent Nelson survey).  And these are people who own the damn thing.

The battle is still in its relative infancy.  Sales are dysmal for both BDs and HD-DVDs.  If we see sub $200 HD-DVD players for Black Thursday at Walmart, we might start to see some moderate sales numbers for the format in general.

The likely ending to this format was is that dual format players will (eventually) become the dominant player and no one will care what format they are buying ...