Video: Blu-ray wins format fight

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msnbc.com
updated 2/20/2008 11:02:44 PM ET 2008-02-21T04:02:44

The high-definition DVD format war may be over, but not the battle for eyeballs and dollars when it comes to viewing high-def movies.

With Toshiba’s announcement Tuesday that it’s abandoning the HD DVD format it helped create, leaving Sony’s Blu-ray the winner, consumers may feel they have no choice but to buy a Blu-ray player in order to enjoy movies in HD.

There are good reasons to wait. Among them are the cost of the players, which range between $400 and $500 and are expected to remain at that level in the months ahead, said Rob Enderle, president of The Enderle Group research firm.

Even at $400, that’s about twice the price most consumers are comfortable with — the “I-don’t-have-to-ask-my-wife’s-permission” number of around $200, said Enderle.

“Probably closer to the end of year, the holiday season, we’ll see some pricing come down,” said Steve Baker, vice president of industry analysis for The NPD Group. “Right now, there’s not a lot of incentive to drive pricing down.”

You'll want to upgrade
But cost isn’t the only factor. If you bought a Blu-ray player last year, chances are you could wind up buying another one next year as well. That’s because most stand-alone Blu-ray players are essentially version 1.0 and not upgradeable.

And you will be wanting to upgrade, “otherwise you’ll have an obsolete product next year,” said Enderle.

“One of the differences between HD DVD and Blu-ray is that the HD platform was complete when it went to market, because you could connect it to the Internet for updates, patches or security fixes,” Enderle said. “Most Blu-ray players have no network connection, except (for those that are) on the PlayStation 3.”

Among the reasons for Blu-ray’s success is that Sony included it on its PS3 consoles, which have sold more than 10 million units since 2006.

That network connection is important because it allows not only for security updates, but added entertainment value, with downloads of special features and offers.

Some stand-alone Blu-ray players with Internet connections are out now, said Baker, but most will not be available until next year.

In order to push the product this year, he sees manufacturers such as Sony, Samsung and Panasonic moving to bundle the sale of their TV sets and Blu-ray players.

“Now that there is a single format, the question is, is that going to spur larger adoption of Blu-ray? It’s incumbent on consumers to make that call,” said Steve Koenig, senior analyst for the Consumer Electronics Association, an industry trade group.

“And one thing most people don’t know is that this is a technology that harnesses 1080p resolution, he said. “Thirty-nine percent of households have TVs with HD, but a fraction of those have high-def sets capable of displaying 1080p resolution, which is the full-output capability of next-generation DVD.

“The number of households that can really take full advantage of next-generation DVD is still somewhat limited.”

The upconverting alternative
Upconverting DVD players, which cost around $100, also offer a good alternative for those who don’t want to make the Blu-ray jump but who want better picture quality. While not offering a true-HD experience, they do come pretty close “to near-high def quality,” said Baker.       

And if you don’t want to deal with buying a player at all, downloading movies in HD is another option.

“The disc war is over, but there’s a bigger one coming — downloads,” said Enderle.

Cable and satellite providers continue to offer more HD movies on demand, while other companies are moving swiftly to get in on the action.

Earlier this month, TiVo and Amazon.com announced a service for TiVo subscribers to download TV shows and movies through Amazon.com.

Apple began offering HD movie rental downloads through its iTunes Store in January. Also last month, Netflix said that subscribers with unlimited rental plans can stream movies and TV episodes onto their home computers.

“There  are a number of services where you can download and stream in high-def,” said Koenig of CEA.

“We saw a lot of this talked about at the Consumer Electronics Show in January. There are services, even satellite-based, which will deliver high-def content directly to the home. That is ostensibly a very viable solution.   

“There’s going to be a lot of competition in this high-def movie content space. Blu-ray is not the only game in town for this type of content.”

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