Blu-ray wins, HD-DVD is dead, who cares?

Blu-ray and HD-DVD are new, competing, incompatible, high definition optical disc formats trying to replace the DVD. Few people have either type of player. This is due to several factors: the need for an HDTV, a limited number of titles in either format, the very high cost of the discs, the relatively high cost of the players versus a standard DVD player, and uncertainty about which format will prevail. This battle has been characterized as “VHS versus Betamax” redux.

DVD sales dwarf sales of Blu-ray and HD-DVD discs. Warner Brothers announced on January 4, 2008 that they were moving to release movies in the Blu-ray format only, forsaking the HD-DVD format. Some observers speculated that Warner was motivated by declining DVD sales. This sales trend is given as the reason that Warner wanted to settle the battle and move on with selling more optical discs, not less. Warner coupled with other major movie studios means that over 70% of movie titles will be released as Blu-ray only discs. Paramount is rumored to be reconsidering its HD-DVD-only support and may jump to the Blu-ray ship. The Warner announcement has been interpreted as the death of HD-DVD. I believe that is probably a correct assessment of the situation.

Bill Watkins, the CEO of Seagate Technology, speaking in Las Vegas at the January 2008 Consumer Electronics Show (CES) said, “People are saying Blu-ray won the war but who cares? The war is over physical distribution versus electrical distribution, and Blu-ray and HD lost that.... The war is over and the physical guys lost.” Seagate makes hard drives for computer and consumer electronics equipment.

I agree with Mr. Watkins, who cares? Last summer I wrote a column, Blu-ray vs. HD-DVD, why I'm sitting this out about how I was uninterested in this format war. I believe video-on-demand (VOD), digitally stored on your equipment, streaming from the internet, or delivered by cable or satellite TV is the future. Optical discs have very little space in that future. If it has not already, I believe total viewer hours of VOD will shortly surpass hours spent watching DVD media and will shortly pass scheduled viewing from cable, satellite or over-the-air TV. Total cumulative HD-DVD and Blu-ray viewing hours is probably not even statistically significant against these other options.

It is impossible to watch a DVD, or any optical disc, from a cell phone or portable video player such as a video iPod. These are the devices that young people use today. They are less interested in the quality of high definition video than they are interested in portability, convenience and ease of watching. DVD extras are interesting but of limited appeal in this new world. Younger people are used to getting their media instantly, whether by buying an iTunes track or by subscribing to a podcast. They have very different viewing habits. They go to movies but when outside the movie theater they are more likely to be on a cell phone, using a portable media player, or playing games on a gaming console like the Wii than they are likely to watch TV.

The movie studios, like the music companies, are in trouble. One reason for their problems can be traced to the relatively high cost of Hollywood video and large music company audio. My December 2007 column What is the best electronic entertainment value? delineated how to evaluate this. The big entertainment companies no longer have a monopoly on interesting recorded content. Technology has changed how we are entertained and how we entertain ourselves. Our eyeballs and our entertainment time are shifting to different sources of entertainment than the traditional sources. This shift is continuing and permanent. Blu-ray is not going to fix Hollywood’s shrinking audience problem.