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Saturday, May 26, 2007

Despite all of the evidence that Blu-ray is poised to win the High Def DVD format war that it's in the middle of with HD-DVD, there are a number of factors that could turn the tides or at least prolong the war. The war started last year with the nearly simultaneous release of the Blu-ray format by Sony and the HD-DVD format by Toshiba. Both formats take advantage of certain properties of blue lasers to encode a tremendous amount of data onto a disc that's the same size as a standard DVD or CD. Even though both formats use similar technology, there are a number of differences between the two which keep them from being played on each other's players. Because of this incompatibility- and the motivation provided by the promise of enormous royalty payments to the winning format- it's generally agreed that only one format will survive the war. This has created a great deal of hesitation among consumers when it comes to investing in equipment for either format because of fear of buying the wrong type of player. Since the beginning of the year, Blu-ray discs have outsold HD-DVD discs by a margin of over two to one. There are also a lot more Blu-ray players in American homes than there are HD-DVD players, despite the fact that most Blu-ray players cost about twice what HD-DVD players cost. This enormous difference in price, combined with the greater number of the more expensive Blu-ray players in American homes, would suggest that consumers like Blu-ray a lot more than HD-DVD. The two to one ratio of sales further emphasizes that point.

Because of this data, Blu-ray is taking some steps to go for the kill in the format war. For instance, Sony and some other companies are planning to lower the prices of their Blu-ray players.

However, there are a number of things that could keep HD-DVD afloat and even put it in the lead. For example, in order to keep pace with the lowered price of Blu-ray players, Toshiba is already lowing the price of several of its HD-DVD players. Movie studios are also planning to release a huge number of new movie titles in HD-DVD format later in the year. Wal-mart is also rocking the boat with reported plans to order two million HD-DVD players to be sold in its stores over the holidays. That wide availability, combined with the lowered prices, could make HD-DVD a lot more attractive to a lot of people.

There are also different dynamics at work in different parts of the world. For instance, HD-DVD is the dominant format in Europe. This is primarily because of the fact that HD-DVD was marketed to European movie studios early on. This brings up the interesting possibility that Europe could enjoy the HD-DVD standard while American uses the Blu-ray standard. There are definitely precedents for different standards being used in different parts of the world. Take the side of the road that people drive on for example. With the exception of the U.K. South Africa, Hong Kong, and Japan, the whole world drives on the right hand side of the road. If there can be different traffic laws and cars in different parts of the world, there can surely be different High Def DVD formats in different parts of the world.

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