UPDATED: 10:27, August 12, 2006
By the end of this year, we shall have on the market at least 4 different storage standards: the CD, the DVD, the HD DVD and the Blu Ray DVD. So how does that affect customers?
According to market research analyst Screen Digest, this will confuse most of them. This means that eventually Blu Ray and HD DVD will have to somehow merge or unite into a single, universal standard, combining the qualities of both formats.
There is also bad news for the owners of the two formats: Screen Digest forecast that only $11 billion of the total $39 billion expected to be spent on video discs by 2010 in the United States, Europe and Japan will be generated by the competing high-definition formats, Sony Blu-ray and Toshiba-supported HD-DVD.
"The net result of the format war and the publicity it has generated will be to dampen consumer appetite for the whole high definition disc category," Screen Digest analyst Ben Keen said.
The two rivaling formats for data storage are supported by different categories of companies: Sony has managed to attract most of the Hollywood studios on its side, while Toshiba made a breakthrough by announcing Microsoft's support for the HD DVD.
At a recent DVD Forum in Los Angeles Microsoft demoed the HD DVD drive it prepares for its next-gen gaming console X BOX 360.
Although Sony has decided to lose a lot of money and integrate Blu-Ray as a standard component in Xbox's rival PS3, which is priced at $499 or $599, Microsoft thought it's better not to force its existing owners of an X BOX 360 to buy another X BOX with an HD DVD upgrade. They will be offered the alternative to buy the HD DVD drive separately.
The estimated price according to speculations for the gadget is around $200. Microsoft on the other side declined to comment upon the subject.
This would make it the cheapest HD DVD player on the market at the moment of its debut. Generally, an HD DVD player in the US ships for a price between $430 and $500. Blu-Ray drives on the other hand are much more expensive (between $840 and $1,000) but they offer an improved quality of the displayed image and they read discs that reach up to 50GB of storage capacity.
The actual standard DVD gained its popularity from the fact that it stored information more conveniently and played it at better than its predecessor, the VHS videotape. It was and is still preferred for high-definition movies.
But according to the research firm this will not repeat in HD DVD/ Blu ray's case. "This time both formats support similar features," said Graham Sharpless, who wrote the report. The new formats are being introduced just as DVD sales level off, after consumers built up libraries of their favourite movies and TV shows at deeply discounted prices.
High-definition DVD formats don't have one clear winner, as benefits and quality remain fairly equal, said Mrs. Davis Jayalth. Ultimately, marketing will win the day.
“The first people to adopt a new technology are early adopters. Lots of those will want a new format (high-definition DVD) whatever it is. They will spend whatever it costs to have the best available,” Mrs. Davis Jayalath said. “But it is more difficult to move into the mass market. It really depends on the marketing and the way the format positions itself for consumer possession.”
Screen Digest also forecasts that the two formats will compete on the market until a combined solution becomes cost-effective, rather than taking the view that one will emerge victorious or that both will flop so badly as to be driven into extinction.
Even if they do both continue to exist in an emerging market, they're obviously not going to have equal sales. Blu-ray has already been predicted the winner by many industry professionals. As senior analyst at Semico, Adrienne Downey, points out: "It's time to put a stake in the ground regarding the future high-definition DVD format: Blu-Ray has won. Walking around CES, it was obvious that much of the enthusiasm and momentum is on the Blu-Ray side."
Screen Digest expects that 430,000 standalone Blu-ray and HD-DVD players and recorders will be sold in 2006 and 1.35 million in 2007. By 2010, it expects about 15 million U.S. households (21 percent of homes with high-definition TV sets), 10 million in Europe (17 percent) and 2.5 million (7.4 percent) in Japan will have bought a standalone unit, while 24 million, 23 million and 15 million hi-definition disc enabled games consoles will have been sold.
As standalone units, a Samsung Blu-ray player sells for about $1,000 and a Toshiba HD-DVD player for about $500.