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DEG Could Play Moderating Role In High-Def Battle

28 Mar, 2004 By: Kurt Indvik

I would expect 2004 will be a year of skirmishes between the two opposing camps in the next-generation (high-definition) disc war.

At the recent IRMA conference in Palm Springs, Calif., representatives for the HD-DVD format and the Blu-ray format fired shots at each other's technology before DVD replication executives. This week in Santa Monica, Calif., during the Digital Hollywood conference, we can expect to hear more of the same.

The IRMA presentations were most interesting since both camps have to be able to sell replicators not only on the potential successful adoption of their format, but on the potential financial impact for replicators who have to make high-definition discs.

HD-DVD proponents say in this important regard their format would require very little change in current plant set ups to replicate their discs, while Blu-ray representatives acknowledged a fairly significant up-front investment in plant retooling, initially, although they maintain subsequent costs go down.

Both sides seem to have been successful at drawing blood in the past six months. While HD-DVD garnered the support of the international consortium DVD Forum, Blu-ray has continued to attract support from a broad spectrum of companies including most recently TDK.

So how does something like this come to a resolution? Can we expect to see two competing formats hit the market in the next few years? I think the consensus is that most executives at the studios and major retailers would hope that scenario does not come to pass. There is a window of opportunity for the packaged media industry to make a coordinated leap forward with a high-definition format that can help sustain what has been a remarkable growth business in optical-disc home entertainment with DVD. Some would argue that such a leap is necessary to forestall or significantly delay consumers turning to broadband delivery of home entertainment. Some studio executives anticipate that 2006 or 2007 is a likely time frame for a high-definition rollout, but such a rollout requires plenty of advanced effort, and time is slipping away.

One group that has the opportunity to play a role in helping to bring this issue to a resolution is the Digital Entertainment Group (DEG). It is the only group in the packaged media space that has, as members, studios, retailers and hardware manufacturers. Buena Vista Home Entertainment's Bob Chapek, president of the DEG, has said that the DEG does not intend to take a position in favor of one format or the other.

While discussions behind the scenes are surely going on, an organized effort or gathering within the DEG to help find a path toward one format (perhaps some hybrid?) could serve a very important moderating purpose in this format struggle.

I hope the DEG considers taking up this challenge, because right now, I don't see any moderating force that can help us avoid a messy conflict that could ultimately hurt the industry significantly.

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