IFA 2007 – BERLIN. Who will be the winner in the disc war over the position of the next generation DVD? Blu-ray or HD-DVD? It could very well be that both will be loser. In Berlin, both parties have a strong presence, but Philips Consumer CEO Rudy Provoost set the tone earlier this week when he told a reporter from the International Herald Tribune that “I would say HD has developed somewhat slower than we had expected. There are highlights, such as last year’s World Cup or next year’s Beijing Olympics. But to give it the next big boost, the movie studios have to release more movies in Blu-ray or HD DVD formats.”
Well, you can blame the broadcasters for not transmitting enough HD programming, but this does not seem to deter consumers from buying HD Ready screens in ever increasing numbers. However, with the next-gen DVD we see a different picture: people are reluctant to buy a new player because they are unsure which format will win the battle.
At first sight, Blu-ray seems to have a winning hand. In Europe, Blu-ray sales outnumber HD-DVD three to one; in Germany the ratio is 2:1. According to GfK research figures 94% of all HD-players in Europe are Blu-ray capable.
But: the lead in Europe is mainly due to the popularity of the PlayStaion3, which plays Blu-ray discs and which is by far the cheapest option compared to regular Blu-ray and HD-DVD players. In the States, sales show similar figures, promoting Blockbuster to start stocking only Blu-ray in its shops. But remember, the first six months of the year only 1.5 million Blu-ray discs were sold and 700,000 of the competition. Not exactly earth shattering figures, yet.
Only last week, Paramount and Dreamwork studios the announced they would only issue new releases in HD-DVD rather than in both formats citing the higher costs of Blu-ray. As it turns out, Toshiba, one of the main backers of the HD-DVD, has shelled out 150 million dollars in subsidies to get the two Viacom-owned studios in their camp. This might be a political move to gain more favourable licensing conditions, but it sends a different signal to the general public: the war is far from over.
While the format war is going on, new technical developments are happening fast: HD-downloads are now a possibility and could soon become a major competitor to physical products such as discs. Why buy a disc if you can download to own the same product? We only have to look back at recent developments in the music industry to see what the effects can be. So in the disc war, there could very well be two losers.
