Sun, Feb 26, 2006 page12

• Microsoft turns the tide in battle of the DVD formats

  The decision by the software giant may be the decisive factor in settling the fight between Toshiba and Sony

  • NY TIMES NEWS SERVICE
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  At first glance, Amir Majidimehr does not look like a game-changer in the battle to develop the next generation of DVD players and discs.

  As the vice president for Windows digital media at Microsoft, he neither steers a Hollywood studio nor controls one of the many electronics giants that are betting billions of dollars on one of the two new formats that promise to play high-definition movies and television shows.

  Yet when he and his team in Redmond, Washington, decided last September to abandon their neutral stance and to support Toshiba and its HD-DVD standard over the Blu-ray format led by Sony, the unexpected change of heart reverberated through the technology industry.

  

  A show attendee compares the difference between Blu-ray format DVD, left, and regular DVD, right, at the Pioneer booth at the Consumer Electronic Show in Las Vegas on Jan. 5.

  PHOTO: AP

  Suddenly, Toshiba's seemingly quixotic defense of its format had new life. Intel joined Microsoft in backing HD-DVD. Hewlett-Packard withdrew its exclusive support of Blu-ray. This month, another member of the Blu-ray camp, LG Electronics, hedged its bets, too, signing a deal to license Toshiba's technology.

  And earlier this month, one of the main reasons underpinning Microsoft's move to shuck its neutrality -- the complexity of producing Blu-ray technology -- led to Sony's acknowledgment that it might delay this spring's scheduled release of its PlayStation 3 game console partly because the needed technology was still being worked out.

  The possible delay and the Blu-ray group's loss of its once-commanding lead are not encouraging for Sony in its attempt to revive its electronics group after a series of bungles. PlayStation 3 is crucial to Sony's future, and not only because the latest version of its gaming consoles could generate billions in revenue; the new machines will include disc drives that will turn them into Blu-ray DVD players as well.

  "The PlayStation is more than a game system to them; it's one of their attempts to own the digital living room," said Robert Heiblim, a consultant to electronics companies. "Blu-ray is also critically important to get right. They don't want to be weak in an area they feel they can dominate."

  NO TRUCE SEEMS NEAR

  A decade ago, a prospective death match between competing first-generation DVD players was averted when Sony and Philips agreed to back down and join the Toshiba/Warner Brothers side, in exchange for a share of royalties that all DVD player producers pay to the format's creator. Now, no truce seems near, as neither side wants to settle for a small piece of what could be a big electronics success.

  So consumers and retailers may be in for a reprise of the confusing VHS-Betamax showdown of the early 1980s, with Toshiba replacing Matsushita as Sony's adversary. But Sony hopes to have a happier resolution this time. Sony lost the battle two decades ago when its highly regarded Betamax technology was defeated by VHS, a more widely accepted alternative.

  Once again, the differences between the two technologies are not huge. And a growing chorus of critics, including some studio chiefs eager to sell new products as quickly as possible, call the Blu-ray format unnecessarily elaborate and expensive.

  The first HD-DVD machines from Toshiba and the competing Blu-ray players from Sony, Samsung and the other Blu-ray companies will all play movies with crisper pictures, enhanced sound and a bevy of interactive features like pictures within pictures and links to the Internet. The machines will also play older DVDs.

  Technophiles got a preview of the HD-DVD technology on Wednesday at an electronics store on the Upper West Side of Manhattan. As Jessica Simpson and Johnny Knoxville cavorted in "The Dukes of Hazzard," prospective buyers were able to see the difference between a plain old DVD and the high-definition kind. But the main feature was the price. Toshiba will sell two players starting in March; one will cost US$499, half the price of the cheapest Blu-ray machines, the first of which will hit the stores this spring. Samsung's first machine will cost US$1,000, while Pioneer's player will run US$1,800.

  Toshiba executives have said that because more high-definition movies will be distributed over the Internet in coming years, they have essentially upgraded existing DVDs to keep prices down. Blu-ray discs, however, include an architecture that Sir Howard Stringer, Sony's chairman, calls "revolutionary, not evolutionary."

  The Blu-ray camp is trying to create a brand-new technology that will accommodate features that are still to be created. In preparation for that future, Blu-ray discs will store 25GB of data, compared with the 15GB on comparable Toshiba discs and 4.7GB on today's DVDs.

  The first batch of high-definition DVDs from the studios will highlight rich graphics, vivid scenery and fast-moving action. The films include Rambo, sci-fi thrillers like The Matrix and Dune and animated features like Ice Age. The DVDs are generally expected to cost US$19 to US$25.

  OTHER FRONTS

  But movies are only one front in the format war. In throwing its weight behind Toshiba, Microsoft has expanded the fight into the computer and game industries. Later this year, Microsoft will start selling an external drive for its Xbox game that will play HD-DVD discs, countering Sony's effort to turn PlayStation into a high-definition DVD player by adding Blu-ray technology. Microsoft and its ally Intel have also persuaded Hewlett-Packard to consider making HD-DVD drives for computers. This would give Toshiba an answer to Dell, which remains committed to the Blu-ray format.

  "The pendulum is swinging back to the HD-DVD camp," said John Freeman, who runs a technology research firm, Strategic Marketing Decisions, that last year declared Blu-ray the front-runner.

  "It will be interesting to see if the Blu-ray group can recover. It's only a matter of time before people start backing out of the Blu-ray camp," he added.

  Still, even with Microsoft on board, Toshiba may have only closed the gap, not overtaken the Blu-ray group. With Samsung, Panasonic and others siding with Sony, consumers will see more Blu-ray machines in the stores. And Blu-ray has more studios in its camp, which means more choice in movies. Every major studio except Universal plans to release Blu-ray DVDs, while Toshiba has commitments from only Universal, Warner Brothers and Paramount.

  But one thing is clear: given Microsoft's growing power and scope in the entertainment realm -- thanks to its Xbox machines, its media player software and forays into Internet television -- its support of HD-DVD has deepened, and has probably prolonged, the format battle.
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