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Lessons From the HD Format War

Posted by Zonk on Tuesday March 04, @03:02PM
from the don't-go-down-the-dark-path-forever-will-it-dominate dept.
mlimber writes "The New York Times' Freakonomics blog asks a panel of experts, 'Is the battle between HD-DVD and Blu-ray really over? What can we learn from it?' The panel suggests, among other things, that Sony achieved a Pyrrhic victory because high-def DVDs will be outmoded before they reap enough profits to make up for what they (and Toshiba) paid out for both product development and bribes to win the support of content providers."

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  • Lesson #1 (Score:5, Insightful)

    by morari (1080535) on Tuesday March 04, @03:04PM (#22639744) Journal
    No one really cares.
    • Lesson #2 (Score:5, Insightful)

      by Anonymous Coward on Tuesday March 04, @03:24PM (#22640154)
      The merits or flaws of either side can be overcome by paying people off
    • Nobody will learn a damn thing (Score:5, Insightful)

      by EmbeddedJanitor (597831) on Tuesday March 04, @04:02PM (#22640900)
      Electricity wars (AC vs DC), tape wars (VHS vs BETA, 8 track vs cassette) or HD Format wars are nothing new and if nobody learnt then, why should anyone learn this time around?
      • Bad comparison (Score:5, Informative)

        by daBass (56811) on Tuesday March 04, @06:51PM (#22643448)
        Are they really that similar?

        - AC vs. DC: Cheaper and better system won
        - VHS vs. BetaMax: Cheaper, worse system won
        - 8 Track vs. Cassette: cheaper, better system won. (though 8 Track was so retarded, it would have been hard to lose in any case)
        - BR vs. HDDVD: More expensive system won, without a real technological/quality advantage.

        So what could have been learned? What sony should have learned looking at the first three is "the cheaper always wins" and they should have packed up and left. Instead, Sony made a more expensive system and clobbered Toshiba with marketing. And won.
          • Re:Bad comparison (Score:5, Insightful)

            by olman (127310) on Wednesday March 05, @08:34AM (#22648024)
            - VHS vs. BetaMax: Cheaper, better system won. VHS was 'better' because the quality dropped with each copy.

            Puh-leeze.

            VHS is the better product. Why?

            Because you could record an entire movie on a single tape right from the beginning. Most people do not view system where you have to change tapes mid-taping as "better".
  • What I learned (Score:5, Insightful)

    by Naughty Bob (1004174) on Tuesday March 04, @03:06PM (#22639794)
    The lesson I draw is that content providers are wholly opposed to consumers interests, and that open, collaborative standards are the only healthy way forward.
    • Re:What I learned (Score:4, Insightful)

      by RingDev (879105) on Tuesday March 04, @03:09PM (#22639860) Homepage Journal

      content providers are wholly opposed to consumers interests
      I wouldn't go quite that far. I would say that content providers are wholly interested in making a profit, and the consumers have a strong interest in getting the greatest possible value for their money.

      -Rick
      • Re:What I learned (Score:5, Insightful)

        by Cajun Hell (725246) on Tuesday March 04, @04:00PM (#22640876) Homepage Journal

        I would say that content providers are wholly interested in making a profit,

        This isn't clear. With music, DRM is just about dead now: the content providers are really focusing on creating usable/buyable products. That is, they are trying to maximize their profit, rather than, say, Apple's or Pioneer's.

        With video, though, DRM is far from dead. They are still trying to lock people into using specific players and monitors. This is perhaps a move to maximize profits, but not necessarily for the content providers. When you have big players like Sony, who sells both media and the equipment to view that media, things get complex. It looks like there's an effort to maximize profit for the equipment manufacturers and proprietary software companies, rather than the content providers.

        It's accepted that you can now listen to music on whatever you want. (If I sell MP3s or CDDA/wav, I don't have to worry about who can buy it.) But with movies, there's still a fight over what customers should be allowed to watch the movie on. They're still acting like they don't want a free market in playback devices, even if that costs them content sales revenue.

        When the content providers start moving to maximize their own profits (or the profits of their content division, in cases like Sony), you'll know it. It'll be about selling bytes to as many consumers as possible, instead of limiting their sales to the subset of movie watchers who have bought the "right" player products.

        • Re:What I learned (Score:5, Interesting)

          by ccguy (1116865) * on Tuesday March 04, @05:29PM (#22642318)

          Sony, who sells both media and the equipment to view that media, things get complex.
          You are forgetting the equipment to _copy_ the media and the _blank_ media. Basically with 100% sony stuff you can make a copy of a DVD you buy from sony pictures and still hear them complain about piracy and them not getting enough money.
    • Re:What I learned (Score:4, Interesting)

      by gstoddart (321705) on Tuesday March 04, @03:12PM (#22639920) Homepage

      The lesson I draw is that content providers are wholly opposed to consumers interests, and that open, collaborative standards are the only healthy way forward.

      Of course, it should be noted that the media companies who will be giving us content on these things are not going to participate in "open, collaborative standards" -- it's just not done.

      There will be one, if not two, iterations of the "next next generation" of this technology before you get one that gets adopted as widespread as DVD was. The amount of people with next-gen displays is too small, and too many people are now leery about the next "new hotness" that they'll stay away even more now.

      I'm not saying you don't make a good point. Just, they're not really looking out for your interests here, and they figure they can get everyone to buy a new generation of technology every time they think it's due. Once they come up with the next direction, they'll still change it to &^%& often.

      Cheers
      • Will it ? (Score:4, Insightful)

        by aepervius (535155) on Tuesday March 04, @03:29PM (#22640248)
        When I was young, the number of people which did not have a TV was very small, and mostly it was due to economic reason. Now I don't have one, I know a few people which don't have one (colleagues, friends). Mostly due to lassitude reason (nothing worth to watch), some of us due to more ideological reason. Me I just did not watch it anymore. Entertainment ? I get a better quick "just" hanging out with friends. it is as time consuming but far funnier. Films/series ? Download or rent from video-club. Information ? TV is more biased than any other source, and nowadays the net fulfill that better than Tv will ever do. And I see an increasing number of people joining our rank. TV don't cut it. Internet replace it. TV might never totally disappear but it is getting less relevant as the central "point" of the family.

        So when you say QUOTE "There will be one, if not two, iterations of the "next next generation" of this technology before you get one that gets adopted as widespread as DVD was. The amount of people with next-gen displays is too small, and too many people are now leery about the next "new hotness" that they'll stay away even more now." ENDQUOTE
        Well I disagree. I think new generation teck will NOT bring anything more than DVD brought us. And if it will, it will be at a great loss of liberty (DRM) from a format which for all purpose can be considered to be DRM free so cracked it is... No what i think is that next generations will increasingly go toward the net and drop tv more. IMHO on the "film" playing device field, DVD is the last usable format, and HDDVD/Bluray was the last war. Unless a leap in TV teck happens (3D for example) there won't be any incencitive to really enhancethe format more.
  • simple (Score:4, Insightful)

    by ILuvRamen (1026668) on Tuesday March 04, @03:12PM (#22639922)
    If someone would have made a cheap combo player fast enough that could play both formats, they could have both been making profits instead of one losing money and the other probably still losing money from so many bribes. It's sort of like a betting on a drag race and then spending $20,000 to upgrade your car while the other guy spends $25,000 and the bet is only $1000 so that's all you win. By the time they start turning a profit on blu-ray, the next format will be released.
  • What's going to replace Blu-Ray? (Score:5, Interesting)

    by Alaren (682568) on Tuesday March 04, @03:14PM (#22639976)

    Apple TV?

    I agree that Sony's fiscal outlay was tremendous, but we're talking about the successor to the DVD. Frankly, I think it's WAY too early to be replacing DVDs--presently, only about 15% of U.S. households [tvpredictions.com] even own an HDTV!

    But that means, when the HDTV revolution really reaches middle America (presumably, sometime after the present "downturn"), Bu-Ray will be there to pick up where DVDs leave off. Then Sony will be making money hand-over-fist. We tech-types like to talk about digital delivery, and digital delivery may very well take hold eventually, eliminating physical media wherever broadband penetration is significant and affordable, but what this additionally means for Sony is that they may have won the last format war, extending Blu-Ray's dominance as the physical medium of choice indefinitely into the foreseeable future. The "successor" to HDTV is going to have to be more than just a resolution upgrade, I think, and without memory-devouring video driving the technical expansion of removable media, Blu-Ray will become the de-facto standard for non-flash-based computer media as well.

    So even if it is overshadowed by flash memory and digital delivery, Blu-Ray is officially here to stay, and in a lot of lucrative consumer markets (especially games and movies). "Pyrrhic" is a pretty short-sighted evaluation, I think.

  • What? (Score:5, Insightful)

    by longacre (1090157) * on Tuesday March 04, @03:14PM (#22639984) Homepage

    Is the battle between HD-DVD and Blu-ray really over?
    January called, it wants its question back. Also, streaming video is the future, but the distant future. Until the cable companies begin delivering libraries of 1080p on-demand content through their set top boxes, Blu-Ray will pull in plenty of cash.
        • Re:What? (Score:5, Interesting)

          by Jah-Wren Ryel (80510) on Tuesday March 04, @04:40PM (#22641604)

          While we, of course, got the disc replaced, to finish the movie we flipped it over to the DVD side. A huge drop in quality was quite apparent. Ditto for a straight up DVD version of the movie.
          I don't know about that title specifically, but there is a lot of suspicion that the studios have been releasing deliberately crappy DVD versions recently. Some people are convinced that the recent Harry Potter sequels and the recent Pirates of the Caribbean sequels look significantly worse on DVD than the first movies in each franchise do - despite having the benefit of new and improved mastering systems.

          The conspiracy theory is that the studios have been doing that specifically to boost the perceived improvement of the HD releases of the sequels and figuring that the people who are DVD-only will never notice the difference because comparing different movies is subjective anyway.
  • Early Adoption (Score:5, Insightful)

    by DrWho520 (655973) on Tuesday March 04, @03:25PM (#22640170) Journal
    1) If you have not figured it out yet, early adoption can bite you is the ass. (Just wait for DR-DVD v2 to render every player but the PS3 obsolete.)
    2) If you shell out enough cash to content producers during early adoption, the market never has a chance to affect the outcome.
    3) Giving away the razors (PS3 compared to vanilla BR-DVD player) and selling the hell out of the blades is still a viable business model.

    The only thing that remains to be seen is whether on-demand streaming content will come to market soon enough and be enticing enough to defeat BR-DVD before Sony sees a return on its investment.
  • Outmoded? (Score:4, Insightful)

    by GroundBounce (20126) on Tuesday March 04, @03:34PM (#22640326)
    CD's were outmoded 10+ years ago but are still the dominant format for music distribution. Likewise, standard DVD's will be around for a long time to follow. The large installed base of players and other equipment will ensure that any format that gets widespread adoption will remain in use (and presumably profitable) long after it is technically outmoded.
  • So annoying... (Score:5, Insightful)

    by wamerocity (1106155) on Tuesday March 04, @03:35PM (#22640352) Journal
    I get really annoyed every time this gets brought up with the claims that any benefits Bluray gives will soon be overshadowed by HD download services. HD download services are great, except I see a few problems with it.

    1 - Heavy DRM - Yes Bluray has DRM too, but you can TAKE IT WITH YOU. The technology is still prohibitively expensive to start making portable bluray players, and in dash bluray players for cars, but there is NO HD download service I'm aware that lets you burn the files and keep them forever to watch. They are mostly rental services - basically you download them on your Apple TV or computers, watch it in a 24 hour period and its gone. In time, those devices will be made cheaper, and will become reasonably priced.

    2 - Downloadable content doesn't look nearly as good a trueHD stuff does. I realize that for many people it doesn't matter, because the majority of TV's that were purchased early on (and therefore a big chunk of the ones in households) are only 720P. But 1080 displays are becoming the new standard and fewer 720 displays are being made. a 3GB 720 file doesn't offer much more clarity than just a standard DVD. Yes I know, many people are going to shout that DVD's are GOOD ENOUGH. Fine. VCR tapes were GOOD ENOUGH too. So are YouTube videos for some people. Big whoop. Watching low quality 720p on a 1080 display just doesn't look as good as a true 1080 picture with 25-35Mbit quality.

    3. To get a decent quality picture, you need to have download a big file, and that requires fast internet connections. American download speeds are pitiful compared to the rest of the world. If you wanted to download a 5GB movie, that's going to take you SEVERAL hours to complete, as opposed to just driving a few miles to the nearest blockbuster r RedBox (which WILL be getting bluray discs inevitably)

    4. Bluray adoption has taken off faster than DVD adoption did. I somehow doubt people are going to give up on buying discs they can KEEP and watch OVER AND OVER, with a download service that offers inferior quality, short watching time, and long waits to watch. But who knows, maybe in 2 years from now I'll be eating those words, but I doubt. Anything you can say about HD downloads applies to SD quality movies as well, and DVD sales aren't really being eaten into like people predicted it would downloadable content. Begin modding me down...NOW!
  • by 200_success (623160) on Tuesday March 04, @03:41PM (#22640468)

    This format war was fought through movie studios, but interestingly most consumers don't really care what discs their movies come on. Whether on HD-DVD and Blu-Ray, the movies play essentially the same way. Hell, DVDs are good enough for movies -- the resolution is good enough, and the run-time of a DVD is longer than the length of time that you can sit still on your butt.

    On the other hand, DVDs will soon become obsolete as a data storage medium. Remember when an entire OS came on a CD-ROM, and you could back up your hard drive onto a couple of DVD+-R? Now operating systems come on DVDs, and only sane backup medium for most consumers is another hard disk. For that, I'm glad that the higher-capacity Blu-Ray standard won, and hopefully Blu-Ray burners will be cheap enough by the time the need arises.

    I wouldn't be surprised if Blu-Ray movies never replace DVDs, but Blu-Ray burners become standard on computers.

  • Digital downloads? How? (Score:5, Interesting)

    by SmallFurryCreature (593017) on Tuesday March 04, @03:56PM (#22640808) Journal

    Tell me please exactly HOW digital downloads are going to happen. There is a reason a new disc was needed for HD, movies take up a LOT of space. Even recompressed a HD movie is several GB, how are people going to download this when there are plenty of ISP's that limit you to several GB per month? That's right, thanks to our ISP's we could MAYBE just download a SINGLE movie before being cutoff. What about the speed? What if I got only a work laptop? Meaning I can only leave it on for a couple of hours when I am home? Do you think your average ISP connection is fast enough for that? Where do I store it all?

    Oh sure DESKTOP HD's are getting bigger all the time but what is a blue-ray or HD-DVD movie, 40-50 GB? That means a large HD can only hold 10 movies. Not much if you consider how many DVD's movie BUYERS got. Some people I know got large enough collection to stretch the capacity of pro-sumer level NAT storage, how the fuck are they going to find enough computer storage to store all this in HD?

    Then offcourse you need to hook up this storage to the TV, how is this done?

    Oh yes, there are solutions and workarounds a plenty, but I don't see any it being adopted anytime soon, just as MOVIE projectors BEFORE VHS were NOT popular.Oh right, some of you younger ones may not know this. No VHS did NOT mean the start of the movie rental business. It was available LONG before. You could always just rent a projector and some movies and real enthousiats had their own setup. But it was far to much of a hassle for the general public.

    VHS made it easy NOT just to record your own shows, but to simply pop down the corner rental story, rent a movie and watch it.

    This lead to a huge boom in the industry for a bit with countless stores opening.

    It lost its luster a bit, partially because many more TV channels became available all catering to their own crowd. Simply watching whatever the tube feeds you after all is still easier.

    But watch HD movies from a PC, that is a lot of hassle, NO, we on slashdot CANNOT judge this. People who compile their own kernel are naturally going to be a bit more inclined to be tech savy then those whose VCR has a blinking clock.

    iTunes? iTunes is a joke, its sales are pathetic if you consider the market it operates in. Do the math, how many BILLIONS of consumers does it reach and how many SONGS (SONGS! Not full albums) has it sold? iTunes is the biggest online store, but compared to offline sales it just doesn't compare.

    There have been several attempt at on-demand and download services and THEY ALL FAILED.

    Don't get me wrong, it is OBVIOUSLY the future, but the future ain't here yet. At the moment we just don't have the tech to handle that amount of content without a shiny disc to put it on.

    What people tend to forget is how slow things really change. DVD's didn't replace VHS for years. LP's sold for ages beside CD's. Digital download has been a dream for as long the internet came into existence and it just isn't ready yet. Just ask youtube why they don't serve all their vidoes in HD. Their servers, would choke and it would mean you would have to pick your movie now if you want to watch it over the weekend.

    And then their is that shiny Blu-Ray disc in a store or rental place, you can pick it up, slot it in and watch it. No PC whining, no ISP complaining, no harddisk screaming for mercy. It just works.

    I think downloads are going to have to wait a bit until those parts of the world who are willing to pay for their content can get their downloads as easy as a disc.

  • What I learned from the format war (Score:5, Insightful)

    by hudsonhawk (148194) on Tuesday March 04, @04:00PM (#22640884)
    I learned that the kind of insane balkanization of consumer products that we see with gaming consoles is spreading to other areas. That the us vs. them rhetoric that was once only found in the realms of religion and politics is now bleeding into online flame wars about which corporate-backed digital movie format is better.
    • by ivan256 (17499) on Tuesday March 04, @03:18PM (#22640036)
      More standalone BluRay players sold than standalone HD-DVD players. Not counting the PS3 at all. So, yes.

      As for downloads, they are currently a fantasy. Downloads could succeed if there were an outlet for downloaded movies similar to online MP3 stores. Download from a vast library covering a huge portion of recorded video, and keep the file to watch as many times as you'd like essentially forever... But no such thing exists on a large enough scale. Most content that is available is for limited time use and a restricted number of viewings, and the availability of titles is small. BluRay has nothing to fear from download competition until this is worked out, and there is no sign of progress.
    • by MozeeToby (1163751) on Tuesday March 04, @03:42PM (#22640488)
      I just don't buy that people are going to download HD content. You can't really compress it any more than it is on the disk without having lossy compression, which kind of negates the whole "HD" concept. I think people tend to view downloads differently from disks. They expect to be able to go online, find a movie, download it and watch it almost immediatly. I have a 5 Meg connection, which I will grant is pretty typical right now (yes there are people with more, but there are a lot of people with less). In reality, my 5 meg connection actually gets about 1.5 megs/s on a good day which means that for a 20 gig movie, it will take just about 4 hours to download, which means that I can't start watching the moview for about 2-2.5 hours. And that assumes current usage by everyone else thats sharing my cable bandwidth. If you have every household suddenly downloading 100+ gigs a month in movies, the current infrustructure will collapse. You'll be begging the ISP's to manage the data and bandwidth which will just give the the opportunity to manage for everything else while their at it. Ask yourself, do you really see every household in america paying for a 15 meg connection ($100+ in my location) just so they can watch movies? Or do you think that the telcos will suddenly decide to upgrade thier infrustructure, not just to your neighborhood but also to every rural area in the US (still more than 45% of the population). Throw in the fact that you physically have the disc. That you can take it easily to a friends house or let them borrow it. Not to mention how few people are really prepared to buy/build/maintain a dedicated media server in their home. I just don't see HD downloads as viable withing the next 5 years, probably not for the next 10 with the speed the infrustructure is being upgraded.
      • Re:Lesson? (Score:4, Informative)

        by yo_tuco (795102) on Tuesday March 04, @03:29PM (#22640242)
        "a better example would be wal-mart and netflix"

        An even better example:
        • Disney (Buena Vista)
        • Fox
        • HBO
        • Lionsgate
        • MGM
        • New Line Cinema
        • Paramount
        • Sony Pictures
        • Universal Studios
        • Warner Bros.