Format War

Two high definition optical disc format standards began to appear in the 2000-2002 period, one being the Sony produced DVR Blue (which later developed into the Blu-ray rewritable Disc format), and the other format, DVD-9, developed into HD-DVD. The competition between the two formats became known as “the high definition optical disc format war” as both formats attracted the mutual or exclusive support of large personal computer and consumer electronics manufacturers, television and feature film producers and distributors, and software developers. Whereas it is true that the “format war” does not have quite as much history behind it as, for example, the property for sale in Bloemfontein might have, the war-like strategy developed by the various camps is fascinating to analyse.

The height of the “hostilities” between the two camps can be traced to the beginning of 2006 when HD-DVD players were released prior to the mid-2006 consumer market release of the various Blu-ray Disc (BD) drives. The battle is usually taken to have officially ended in February 2008, when Toshiba, an ardent HD-DVD supporter and member of the Board of Directors of the DVD Forum, announced that it would no longer manufacture HD-DVD players in favour of producing drives for the BD.

“Format wars” are often counter-productive: rather than a natural tendency of the competitive market to do away with goods of inferior quality, format wars often prevent consumers from committing to a specific standard when uncertainty as to its future longevity is still in question. Although the BD/HD-DVD format war can be compared to the VHS/Betamax war in the mid to late-1980s, other format disputes have been resolved in the interests of manufacturers and consumers alike. Examples include the compromises found in the standardisation of DVDs and HDTV.

A paramount factor contributing to the instigation of the format battle was the market friendly development and selling of the high definition television. The general consensus is that picture, colour and sound quality of HDTV is of a much higher quality than the respective measures in standard definition TV. The demand for HD video players therefore increased and the possible profits to be earned served as incentive to gain as much market share as was possible. The consumer grade HD players needed a cost effective storage medium with enough capacity to store the large amounts of data needed for HD video.

The genesis of the Blu-ray disc has been described elsewhere on this site in greater detail, and will only be briefly mentioned here: Sony’s DVR-Blue, owing to the greater accuracy of blue-violet laser diode technology as compared to the red laser technology used in DVD, allowed for a vastly increased density of data storage, which in turn meant that on a disc of similar size, the DVR-Blue could contain much more information than DVDs.

The genesis of HD-DVD followed a slightly different path: the DVD Forum, chaired by Toshiba, thought that the more expensive Blu-ray format (more expensive owing to its need for a protective cartridge casing to avoid scratches) wouldn’t be as market friendly as a DVD format. In 2002, the Forum decided to adopt a proposal put forward by a DVD supporter, Warner Bros., to compress HD content on a dual layer DVD known as the DVD-9 (which had about 8.5 GB of storage). The Forum nonetheless also pursued blue-violet laser diode technology to develop a disc that could compete, in terms of capacity, with Blu-ray. It was out of this research and development that the HD-DVD evolved.

Unfortunately, the two formats had differences that made them incompatible with one another. The Blu-ray Disc Association (BDA) chose to use a Java-based BD-J interactivity layer instead of Microsoft’s HDi. Toshiba backed the HDi format, and announced that it would continue to develop HD-DVD in conjunction with Microsoft. By 2005, the BDA and DVD Forum made it public knowledge that negotiations to avoid a format war had failed.

The support behind each standard was formidable. The BDA enjoyed a Board of Directors that included 14 major companies, Contributors of 22 companies, 37 general member companies, and a total membership of 73 companies. Toshiba, NEC, Sanyo and the Memory- Tech Corporation collectively started the HD-DVD Promotion Group, which also included Microsoft, Intel and RCA.

The final outcome of the battle could be seen to whittle down to two decisive factors: the first of which was shifting company alliances, and the second, notably, was Sony’s inclusion of a Blu-ray Disc drive on the PlayStation 3. In terms of shifting alliances, the key factor was the decision of Warner Bros. to end their exclusive support of HD-DVD, and instead move their releases to BD. Prior to late 2005, each of the optical disc standards enjoyed the exclusive support of 3 of the 6 major Hollywood studios. Warner Bros. was in the HD-DVD camp, and their defection in late 2007 began a chain reaction of other studios and distributors moving over, exclusively, to BD. The inclusion of Blu-ray drives in the PS3 effectively meant that, although each PS3 console was sold at a loss, approximately 10.5 million BD drives were in circulation.

The combined effects of the above factors were of decisive influence in Toshiba’s conceding that Blu-ray had won the format war.