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Myriad Scenarios in Quest for a Next-Gen, High-Def Format

6 May, 2005 By: Thomas K. Arnold

We're coming off Golden Week in Japan, a cluster of four national holidays that effectively shuts down the country for a two-week spell. But even if these had been more productive times, don't expect the two consumer electronics confederations battling it out over a next-generation, high-definition optical disc format to have made much progress, if any, in what's beginning to look more and more like a quixotic quest for a compromise.

Simply put, the Blu-ray Disc and HD DVD camps, respectively headed by Sony and Toshiba, are at loggerheads, and the only way out may be a gambit.

Sony extended the olive branch, but it was a meaningless gesture. So much money has been invested in Blu-ray as the platform for PlayStation 3, and so much pride has been lost in ill-fated attempts to develop standards for DVD and videocassette (remember Beta?), that the word from inside is that Sony's idea of a compromise is Blu-ray, period.

The HD DVD camp, led by Toshiba, thus finds itself in a peculiar pickle. If your opponent won't budge, you either have to force the issue or play along. Forcing the issue will be difficult, because the major studios — remember, software rules — are evenly split between the two rival formats. Sony and Disney have come out for Blu-ray, and Fox is reportedly about to make the leap, as well. Meanwhile, HD DVD supporters include Paramount, Universal and Warner Home Video, which under Warren Lieberfarb approached Toshiba way back in 2000 to come up with a high-definition format.

So Toshiba plays along. HD DVD-supporting studios already have said they're ready to release product in the fourth quarter, and if they mean what they said at a January press conference during the Consumer Electronics Show in Las Vegas, that will give them a three-month head start over Blu-ray. Maybe longer.

But that's not enough to guarantee success. If the three dissenting studios fail to jump aboard, HD DVD's launch will be literally half-cocked. The big electronics chains might want to sit this one out until everyone agrees, and the smart money says this is a risk Toshiba might not want to take.

So the other option, then, is bowing out. HD DVD leaders have reportedly been saying in private conversations with the studios that unless support for their format is universal, they might throw in the towel. In the next breath comes the veiled threat: Blu-ray will be significantly more expensive to produce — upwards of 25 cents a disc pricier than HD DVD. Is this something Hollywood really wants?

The gambit is that Toshiba and HD DVD might win by losing. The Blu-ray studios aren't swayed by what they consider specious arguments and hold their ground. Toshiba makes good on its threat to bow out. The fourth quarter comes and goes, with no high-def format. As Blu-ray specs and cost structures materialize, let's suppose what the HD DVD side has been saying all along is true: Blu-ray does cost a heck of a lot more than anyone expected. The studios become alarmed and revolt. They plead with Toshiba and HD DVD to come back — oh please, oh please, oh please. HD DVD stages a triumphant return, embraced by all, while Blu-ray rides off into the sunset.

A viable scenario, or wishful thinking on the part of an HD DVD spinmeister? We shall see.

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