Jae C. Hong  /  AP file
Attendees at the Consumer Electronics Show Show look at Sony's Blu-ray movie display.
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updated 1/12/2007 8:57:20 PM ET 2007-01-13T01:57:20

In a city built on wagering, the smart money is staying on the sidelines when it comes to the battle between two high-definition DVD formats.

The first shots between Blu-ray, backed by a Sony-led consortium, and HD DVD, whose group is led by Toshiba Corp., were fired last year when the formats made their splashy debuts at the International Consumer Electronics Show.

Analysts and executives thought that by this year's show, there would be a clear winner, especially after Sony in November released its Playstation 3 video game console, which comes standard with a Blu-ray disc drive.

Instead, both sides have hunkered down for what could be a long fight and some are even conceding that both formats may be here to stay.

"In an optimal world you would have one format," Kevin Tsujihara, president of the Warner Bros. home entertainment group said this week. "But there are many industries where multiple formats have existed and flourished."

Tsujihara noted that in video gaming, three incompatible formats — Playstation, the Microsoft XBox and consoles from Nintendo, including the recently released Wii — have existed for years.

At this year's CES, Warner Bros. showed off a double-sided disc that holds movies in both formats. Tsujihara said the "Total Hi Def" disc should spur the purchase of more high-definition DVD players.

"THD inspires consumer confidence by eliminating confusion and fear of choosing the wrong format," he said.

Warner Bros., a division of Time Warner Inc., releases its films in both formats, as does Paramount Pictures, a unit of Viacom Inc.

Warner said it would start releasing content in Total HD format only sometime in the second half of the year. It also said the dual-format discs will cost slightly more.

Warner Bros. hopes other studios will adopt the solution. But most remain stubbornly in one camp or the other and show no signs of budging.

In fact, the three studios that release only in Blu-ray — The Walt Disney Co., News Corp.'s 20th Century Fox and Sony Pictures — this week boldly predicted total victory for their format.

"The format war's in its final phase," Mike Dunn, president of 20th Century Fox home entertainment said at a Blu-ray press conference.

Universal Studios, a division of General Electric Co., is the only studio to support HD DVD exclusively.

Sony revealed at CES that it met its goal of shipping 1 million Playstation 3 consoles to North America in 2006 . The company said a survey showed that 80 percent of buyers said they will purchase Blu-ray DVDs to play on their machines.

Still, there were other signs of compromise at CES 2007.

LG Electronics, a member of the Blu-ray camp, announced a new player that will accommodate both formats . The model BH100, dubbed "Super Multi Blue," will sell for $1,199 when it becomes available next month.

But some observers say announcements like those from LG and Warner Bros., aren't necessarily helpful.

"Consumers are aware there are two formats and they think 'VHS versus Betamax," said Phillip Swann, president of the technology-oriented Web site TVpredictions.com.

The competing videocassette technologies squared off in the 1980s with consumers eventually picking VHS as the winner.

"Consequently one of the formats has to go away, either via the marketplace or a negotiated truce."

Swann also believes the price of players has to come down to $299 or below before consumers embrace one format. Toshiba makes an HD DVD model for $499, while most Blu-ray players sell in the $1,000 range.

One huge incentive for studios to resolve their differences may be a slowdown in the growth of the overall DVD market. Sales for 2006 are expected to be flat, despite huge numbers for some titles such as Disney's "Pirates of the Caribbean: Dead Man's Chest."

Expect electronics companies to follow LG's lead and introduce dual-format players this year, says James McQuivey, a former Forrester Research analyst who is now a Boston University professor specializing in technology and communications.

"It's a logjam breaker," he said. "It could influence the studios to release their films in both formats.

"If that happens, it will allow some momentum to be generated. Right now, there isn't any," he said.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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