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Format war almost over. Who lost? We did. (part 2)

Finland’s most influential newspaper, Helsingin Sanomat, published a short news item about Warner’s decision to support only Blu-ray from May 2008 onwards. The ensuing discussion on HS’ website was interesting reading, mostly because the majority of chuckleheads there were convinced that Blu-ray’s victory will lead to cheaper movies and players. Dream on, people, dream on.

The news item is worth mentioning for a couple of additional reasons. First off, the person who wrote the news item knows very little about either format, it seems. He writes,

from a technical standpoint there’s not much difference between the file formats of HD DVD and Blu-ray.

Yeah, file formats indeed. We should probably be thankful he didn’t try to impress us by comparing the physical dimensions of players. “One’s a bit thicker!” Uh-huh, like you, I guess.

Second, and by far the more salient point, is the fact that the person in question injected his own personal opinion about one format dying off being a “blessing for the consumer”. How, exactly? According to him, it’s a blessing because the consumer has no need to ponder on which format’s player to purchase.

Oh boy. Let’s break this down a bit, shall we? You are interested in High Definition movies. You’ve got a nice 42-inch HDTV and a surround sound system at home and you’re ready to take the plunge. But wait! Some of the movies you want to buy are released on HD DVD only, and other favourites are out only on Blu-ray. What to do, WHAT TO DO?!

It’s quite simple: you buy both.

By now you’re probably screaming about not being able to afford two players, or that buying movies in two formats is silly, or something equally retarded. Shut up, you can afford two players. The format war was taking care of player prices. You could have purchased the cheaper player now and the more expensive one later once its price dropped. And let’s be honest here, what the hell are you doing, thinking about HD if you can’t afford the hobby? Get real, grow a pair and stop whining.

Multi-format, then.

This is not the first time you need to buy more than one piece of equipment to have access to all the content you wish to enjoy. If you’re into videogames and own more than one games console, I can and will call you a hypocrite. You wanted to play a game which was exclusive to PlayStation 2 so you bought a PS2, right? Then you bought an Xbox for some of its exclusive titles. Now you’ve got a PS3 and an Xbox 360, while your Nintendo Famicom, Gamecube and a couple of Sega’s old consoles are gathering dust in the attic.

So please stop whinging about buying content in two formats. You’ve bought plenty of content in various formats in the past. C-cassettes, CDs, mp3s, you’ve bought movies in VHS and DVD formats - and if you pay a TV license fee, that’s just one more content format you’re paying to enjoy.

Still mumbling about needing two players? Well, I suggest you write a stern note to CE manufacturers and demand a box which acts as a set-top box for digital TV broadcasts, while also playing DVDs, Blu-rays and HD DVDs - and fits nicely into your pocket so you can view movies on-the-go. Don’t forget, it has to be a phone and a digital camera as well. Convergence is a great idea, but let’s face it, we will always have a variety of boxes lying around the house for various tasks. One box more is not going to kill you. Unless it bursts into flame at night and burns the house down with you inside.

But seriously, LG and Samsung have new comboplayers coming out this year. Samsung announced a new UP5500 at CES for $599. That’s about half of what LG’s first comboplayer cost only some months ago. We’ll have to see what effect Warner’s announcement has on the future of comboplayers, however.

Lesser of two evils.

In part 1 of this rant, I wrote about how Sony and its partners have invested billions on Blu-ray, and how they will eventually get their money back from the consumers. None of these companies is running a charity, after all. And you know what? Toshiba is not a charity either. If HD DVD won the war, Toshiba would certainly do everything in their power to make money as well. I just happen to believe that we, as consumers, would have been better off under Toshiba’s regime.

Here’s why:
1) Toshiba does not control HD DVD replication.
2) Toshiba does not own any Hollywood studios, i.e. it has no reason to screw competing studios over.
3) Toshiba has never introduced rootkits in its software. Big corporations are evil, but Toshiba is lesser of two evils here.
4) Ramping up HD DVD replication capacity does not require multi-billion dollar investments, the bill of which is eventually paid by the consumers.

{ 5 } Comments

  1. gooey | Tammikuu 7, 2008 at 19:25 | Permalink

    You raise some good points, but overall you don’t convince me. I think the pros of a single format outweigh the cons, and I think you exaggerate the cons. To your points:
    1. As far as I know Sony doesn’t really have as much control over BD as you imply. Sony is just one of 18 BDA board members and if i remember correctly at least Verbatim and Panasonic also produce BD discs.
    2. Said board includes Warner, 20th Century Fox, Apple, and Walt Disney, so I don’t really see how Sony could “screw them over” as you say.
    3. True, Toshiba is nicer as a company, but again BD does not equal Sony, and anyway, this is of relatively minor relevance anyway.
    4. I think it makes sense to take the BEST technology now, price is only of minor importance. In a few years the whole price point will be completely irrelevant, and I would feel mighty stupid to be stuck with a inferior format years from now just because “at the time of launch, and for a brief while, it was cheaper.” Especially because we may not see BD/HD DVD replaced with another physical medium in many decades.
    Anyway, apparently producing a HD DVD costs $1.15 whereas BD is $1.30. If this is anywhere even close to the truth, the point is totally irrelevant.
    And you exaggerate the “recoup their losses” point. Every major new technology has R&D and marketing and whatnot associated with it and that always has to be recouped. But the price is already “good enough”, it’s not like we’re going to be stuck with $1000 players and $50 films. Production costs will surely drop enough in the next year, two or three to bring players and films down to DVD levels. It’s hardly a significant enough factor to allow it to weigh much in the making of such a long-term decision.

    Furthermore, YOU may not have a problem buying BOTH players, but I and I think most people surely do. It’s not even so much a matter of cost, but a matter of principle and practicality. I don’t WANT _yet_another_ ugly box on my shelf, I don’t WANT _yet_another_ separate remote control, the extra cables and the need for yet another input socket in my amplifier and TV. It’s just plain wasteful, pointless and annoying to have two devices doing the exact same thing.

    I definitely prefer ONE format. I don’t even care that much who wins, so long as someone does - the sooner the better.

  2. gooey | Tammikuu 7, 2008 at 19:33 | Permalink

    Here is some more info on the costs of BD vs HD DVD: http://wesleytech.com/blu-ray-vs-hd-dvd-replication-costs-revealed/111/ (see also the update and comments).

  3. Petri | Tammikuu 7, 2008 at 23:37 | Permalink

    Hi Gooey, and thanks for taking the time to register and leave comments.

    I’m well aware of Wesleytech’s report. You’re missing my point slightly by bringing it up. The report has absolutely nothing to do with actual Blu-ray replication costs, i.e. it doesn’t show how much Sony pays out of its own pocket so the publisher can get BD replication at the quoted price. Sony has from the start made sure BD replication is comparable in price to HD DVD, so studios don’t have that excuse to switch over to HD DVD. If Blu-ray wins the war, how long will it take for Sony to start hiking up replication costs to make up some of the losses?

    Also, talking about production costs. I have from a reliable source that some time before Paramount went HD DVD exclusive, they got some very interesting sales figures. A movie they had released in both formats sold ~50.000 on Blu-ray and ~30.000 on HD DVD. Yet Paramount lost money on the Blu-ray and made a profit on the HD DVD. Production costs consist not only of replication.

    To the points, then.

    1) Sony owns most base technology patents, and more Blu-ray related patents than other board members, followed by Panasonic and Pioneer. Sony definitely has more say in Blu-ray than other board members.

    2) Sony owns most Blu-ray replication facilities. Don’t you think PS3 and Sony’s own studios have an inside lane when it comes to scheduling replication? And wouldn’t you also agree that this arrangement gives Sony some rather interesting avenues to explore when it comes to charging for replication?

    3) I think the point is way more relevant than you’re willing to accept, but we’ll have to agree to disagree.

    4) My point has all along been that the two formats can co-exist peacefully, that there’s no reason for one to die out. Some studios prefer one format over another and there’s nothing wrong with that. We’ve been living in a world of multi-format entertainment for ages now, so this shouldn’t be anything new to anyone.

    You believe price of players and films will come down to DVD levels in a few years. That might be the case, if the masses were to embrace Blu-ray (and HiDef in general) like they did DVD in the past. Some believe this will be achieved by forcing a single format landscape. I honestly don’t believe it.

    We have four distinct consumer groups: A) Early adopters. B) Technology know-hows. C) Fence-sitters. D) The masses. A, B and C together amount for 3% of overall sales. A and B have already taken the plunge. Fence-sitters are now starting to invest in Blu-ray, encouraged by Warner’s announcement. To make either format a commercially viable enterprise, group D needs to be activated. And I fear they don’t care. They don’t know about HD; they don’t know what they’re missing; they’ve seen a crap demo and see no difference between SD and HD; they’re perfectly happy with DVDs; and in some technologically aware cases, OTA HD is good enough.

    You don’t want another box on your shelf. I see. Well, I don’t want to go to work. There are hundreds of things none of us want to do but we do them anyways, and they don’t kill us. With tongue firmly in cheek: surely you understand what it sounds like when a person is asked for a reason for not doing something, and he replies, “I don’t WANNA!” Come now, we have to empty that diaper.

    If it’s another box you don’t want, have you considered a comboplayer? That’s only one box, so that shouldn’t be a problem, right? And while we’re screaming for a single format, how come nobody’s demanding Microsoft, Nintendo and Sony do a deal where two of them bail out, leaving a single format to rule the videogames market?

    No, I call bullshit. There’s absolutely no valid or rational reason to end the format war. The war is forcing hardware and software manufacturers to bring their best game. It’s forcing player prices down much faster than without competition. Moving to a single format will not drive masses to buy HiDef players and media. Studios would have to kill DVD for that to happen.

  4. gooey | Tammikuu 8, 2008 at 19:28 | Permalink

    Hi again,

    And thanks for your reply.

    I agree largely with most of your points. You’re absolutely right that “group D” doesn’t care, and moving to a single format will probably not be the spark that sets the masses in motion (though, while I do think a single format won’t get group D buying, multiple formats definitely does hinder them from doing so). You’re right that two formats could co-exist together (though imho not as peacefully and unproblematically as you imply, especially from the group D point of view) and people are being typically absurdly fanatical about picking a side in this matter. In fact I’m more with you than against you.

    But I want to defend my “I don’t wanna!” point here. This isn’t the same kind of cry-babyness as not wanting to go to work. Work I have to accept. I don’t have to accept multiple formats. I pay for this stuff of my own free will, and I am not happy to pay extra for a something I already have.
    I have to put up with this enough in everyday life: OSX/Win/Linux, divx/h264/quicktime/etc, mp3/flac/ogg/etc, xbox/ps3/wii, doc/sdw/rtf/etc, ad nauseum. Your logic seems to be, since we have so many, what’s a couple more? My logic is, since we have so many, I want a damn good reason to accept any more. I’m sick of it. That a BD movie might cost a few dollars more than a HD DVD film, or that the player will be $399 instead of $299, isn’t for me a good enough reason.

    (In response to your nintendo/microsoft/sony analogy, I would argue that the xbox, ps3, and wii are all different products that do rather different things. Much like different operating systems or computer hardware platforms are justified in their existence. BD and HD DVD are for all practical purposes the exact same thing.)

    Unlike (presumably) most people, I agree with you that a format war has lots of advantages for the consumer. And it has definitely brought prices plummeting down faster than anyone thought possible. But I guess my point in a nutshell is, I don’t see the format war bringing enough advantages to be worth the disadvantages.

    I don’t want to (or should I say, “I dont wanna!” ;) :
    -see the film selection in stores halved (since every film will have to be put on the shelf in both formats), the selection is bad enough already.
    -have to explain to my dad/grandma/whoever that they can’t borrow film A because they don’t have player B, or that “remember to buy the RED boxed films only!” - I have to do this kind of idiotic training all the time already with region codes, linux/mac/windows, hdmi/scart/vga/etc, DVD-/+/R/RW/DL, and I hate it, especially when it’s totally and utterly unjustified and pointless (DVD-/+R being a good example).
    -be worried that one day part of my library will be made obsolete. A single format virtually guarantees future support, or at the very least, drastically lengthens the lifespan of a product. I don’t think this is a big risk, but considering I put thousands of euros in films, I would rather be safe than sorry.

    I could probably think of a few more points, but even these three (even though admittedly minor) points are enough to make it so that I’m perfectly happy to pay a bit more for a player and the films. Or what kind of price-jump scenario are you envisioning will happen?

  5. Petri | Tammikuu 8, 2008 at 20:13 | Permalink

    Good post, Gooey, thanks. I definitely see your point wrt “I don’t wanna!” and my “What’s a couple more boxes?”.

    Also true that games consoles are different products. But if we take a wider view, they’re all boxes that offer entertainment. Most games are released for all platforms, which lends weight to an argument for one single, unified games platform. Especially if it’s one that has the features of all current ones, so you wouldn’t have to give up Wii’s control method etc. I still think games consoles are a pretty good analogy :)

    Also, some very good points about film selection in stores and idiot training. I’m with you there. I don’t, however, quite subscribe to the point about obsolescence. All consumer formats are obsolete sooner or later, after all. My house is full of obsolete formats! Isn’t life too short to worry about such things? ;)

    Anyways, my point being, industry killing off HD DVD does not mean that HD DVD players and movies will stop working that very second. It will most likely take a while to get those HD DVD exclusives on Blu-ray anyway, so why not enjoy those titles on HD DVD (if you have a player and those movies already, that is)? Besides, who’s to say you must buy those same movies on Blu-ray if you have them on HD DVD already?

    I’m fairly certain Toshiba won’t abandon its customers. If for nothing else, the Japanese honour will make sure warranty repairs will be made, and there will be spare parts for players available for years to come.

    The price-jump scenario… well, that was a silly brainfart, to be honest. I had envisioned a future where Blu-ray exists all on its own, without any competition at all. Stupid, really. Of course there will be competition from DVD and downloads. But I’m still convinced that without HD DVD, Blu-ray companies don’t have quite so much incentive to keep pushing player prices down. Movies will stay expensive for a long while as studios love to charge premium, I’d think.

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