Wed, Oct 05, 2005 - Page 11 News List

Battle over DVD format could be nearing climax

DISC DISPUTE Although there is no apparent winner yet, the imminent release of the two technologies will mean the new generation victor should emerge soon

AP , TOKYO

A war to dominate the market for next-generation DVDs is playing out at a huge electronics exhibition near Tokyo, with Japanese electronics companies on both sides expressing confidence in victory.

The fight escalated yesterday as the CEATEC 2005 exhibition opened in Chiba, with Paramount Pictures -- which had previously supported the HD DVD format backed by Toshiba Corp. -- becoming the first major movie studio to support both rival formats.

Matsushita Electric Industrial Co, which backs rival technology Blu-ray Disc, was openly gloating.

"The format war is coming to a close," said Matsushita executive officer Kazuhiro Tsuga, adding that he was hopeful other Hollywood studios will follow suit. "That's our current scenario."

Until Paramount's decision, the six major studios had been evenly split between HD DVD and Blu-ray, also backed by Sony Corp.

Both formats deliver dazzling images in high-definition video and can store much more data than today's DVDs, allowing for more interactive features -- like enjoying a movie, and at the same time watching the director discuss the scene.

At CEATEC, Matsushita, which makes Panasonic products, is demonstrating how it has been able to lower Blu-ray production costs, a key past weakness of the format. HD DVDs are cheaper to produce because they are more similar to current DVDs and can be made in the same factories.

Although hopes had been high for a compromise on a single format, both sides have recently made comments suggesting a stalemate.

As long as the two formats are incompatible, consumers may end up the losers and adoption of the new technology may be delayed. One format may eventually win over the market, in the same way that Matsushita's VHS defeated Sony's Betamax home-video system in the 1980s.

Analysts say it's far too early to predict the outcome.

"There is no decisive lead for either side," said Koya Tabata, consumer electronics analyst at Credit Suisse First Boston in Tokyo.

Tabata said not everyone is going to rush out to buy next-generation DVD products, and the situation is changing every day, although Paramount's decision seems to have put Blu-ray slightly ahead, at least for the moment.

Complicating the issue is that the consortium backing HD DVD includes chip maker Intel Corp. and Microsoft Corp, but PC makers such as Apple, Hewlett-Packard and Dell are backing Blu-ray.

Those who support HD DVD say their format has a timing advantage. HD DVD players are set to arrive at stores later this year in Japan and early next year in the US.

Sony's Blu-ray recorder models are already on sale in Japan, and the Sony PlayStation 3 video-game console, which supports Blu-ray, is set to go on sale next spring. But when Blu-ray players and other models will be available isn't clear.

"What will determine the success of the product is consumers. And when consumers have that much lead opportunity to enjoy HD DVD, I think that will be the real decision-maker," said Mark Knox, a Toshiba official overseeing HD DVD promotion.

Knox played down Paramount's decision, noting that none of the film studios has said their backing is exclusive, leaving room for them to jump ship if the other format begins to look like a better choice.

The Walt Disney Co, Columbia Pictures and Twentieth Century Fox, which support Blu-ray, have not said whether they will also release films in HD DVD. Universal Pictures and Warner Bros remain in the HD DVD camp.

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